January/February 1991
The cable and wire chopping industry is facing many new economic and environmental challenges in the 1990s, but pending technology and the promise of greater industry cooperation offer hope for solutions.
By Kent Kiser
Kent Kiser is associate editor of Scrap Processing and Recycling.
Remember the tale about the ugly duckling that grew up to be a swan? In the cable and wire chopping industry, tailings--the “plastic fluff” left over after chopping--are the ugly duckling, but chopping company officials hope that these tailings can be transformed from a burdensome waste material to a useful commodity.
Tailings are the inevitable result of recovering copper--and to a lesser extent aluminum--from wire and cable. A large chopping plant can generate 20 to 30 tons of tailings a day, which quickly form mountains of plastic fluff if not hauled off-site.
Whereas securing steady supplies has traditionally been the number-one concern for choppers, disposal of tailings has suddenly become their top priority. The industry is now grappling with what one chopper called an "ever-tightening noose" of hazardous waste regulations. With the Environmental Protection Agency's new Toxicity Characteristic Leaching Procedure (TCLP), tailings containing lead, either in free form or as polyvinyl chloride (PVC) stabilizer, or other leachable materials, could be classified as hazardous waste.
The procedure has left some wire and cable choppers feeling as if they are operating in a state of limbo. They call for guidance and education regarding the regulations. They ask for time to develop and adopt interim treatment methods while recycling technologies are being refined. They demand equal enforcement of the TCLP from state to state and landfill to landfill. As one chopper sums up, "We can find ways to continue to operate in a profitable manner, provided that the rules are consistent and understood."
Battling on Several Fronts
Facing new regulations is difficult, especially in a turbulent economic setting. In recent years, choppers have enjoyed steady supplies and strong prices for copper and aluminum, riding the wave of prosperity in the housing and automotive industries. Last year showed steady expansion in the industry, especially in the Midwest, Southeast, and East, as new chopping lines started operating and existing facilities were either upgraded or expanded.
Now, confronted with the slowdown in the U.S. economy, the Persian Gulf crisis, and the economic changes in Europe, wire and cable choppers see demand slackening and supplies tightening.
One chopper predicts that 1991 will be “a survival-type year" in which choppers will operate within tighter profit margins and shoulder higher carrying costs. Another chopper foresees the market moving toward a global excess of refined and scrap copper, which could reduce prices significantly. Most choppers see this trend continuing unless there is a supply disruption in foreign countries or until the U.S. economy recovers and the confrontation with Iraq is resolved. "It's the uncertainty that is keeping the market on pins and needles," one chopper says.
To meet these economic challenges, several choppers recommend belt-tightening measures, including critical review of all operating costs such as electricity. "The industry in general needs to continue to modernize its equipment to be as cost-effective and cost-efficient as possible to be able to compete," says Steve Brown, vice president of Gulf Metals Industries Inc. (Houston), and chairman of the Institute of Scrap Recycling Industries's (ISRI) wire and cable chopping committee. Machinery should be checked and modified to reduce downtime and to maximize the recovery of as much metal as possible.
To adjust for diminished feedstock supplies, some choppers are processing alternative products through their lines, such as aluminum and copper radiators.
What Do We Do Now?
Cable and wire choppers feel as if they are between a proverbial rock and a hard place. On one side, the wholesale landfilling of tailings containing lead and lead-stabilized PVC is being restricted; on the other side, technologies to recycle the majority of tailings will not be in place for several years. One option is for choppers to dispose of tailings containing lead-stabilized PVC in a hazardous waste landfill--at a cost in excess of $300 a ton. However, the increased costs of tailings disposal will have to be passed on to customers and suppliers, choppers note.
Tom Feichter of Reclaimers Inc. (Kendallville, Ind.) asserts, "Wire choppers need to begin establishing disposal fees for tailings separate from chopping fees."
One chopper described the following worst-case market scenario: As choppers face stricter regulations and increased disposal costs, they must pay less for certain wire and cable or they may find it unprofitable to continue processing these materials. One large chopper, in fact, temporarily has stopped accepting No. 2 wire, which contains PVC insulation, until TCLP concerns can be addressed. Some choppers have considered the possibility of exporting unprocessed wire and cable, but this trade is also coming under closer scrutiny and regulation.
In an effort to find short-term solutions, choppers have been exploring methods to neutralize or encapsulate the lead in tailings, making the lead unreachable. Choppers could thus continue to dispose of tailings in landfills until recycling technologies become available, giving the industry time to adjust to the new regulations. This option, however, can involve state and/or federal approval and review, and could require significant investment in processing equipment, which would, again, have to be recovered from customers.
In pursuit of other stopgap measures, one chopper has built three silos to store tailings. Another has secured a special waste authorization from its state to continue landfilling the material. Other choppers are negotiating agreements to sell the material to plastic recyclers.
Technology: Making Heads of Tailings
Recycling, extraction, and pyrolysis are being touted as possible long-term solutions to the tailings glut. "We are willing to explore any and all alternatives that are presented to us," one chopper says. But the question remains: When will these solutions be implemented and how much will they cost?
Several companies have been working on technology to recycle tailings into a number of industrial and consumer products. Regional recycling centers could be established, or choppers could become licensees of this technology and process their own tailings into durable products onsite. Some technology could soon be available, but funding and marketing support has not been forthcoming from large chemical/plastics corporations or independent backers. As one industry representative says, "People are still sitting on their hands."
This technology suffers from the "new kid on the block" syndrome, the representative adds. "You've got to start somewhere, though, and it's better than just burying the material and forgetting about it.”
One professor of chemical engineering claims to have devised a system that can extract 99-percent-pure PVC and polyethylene from tailings, while recovering the metals in the mixture. According to Thomas Byro, ReMA director of special projects, who has been studying options for tailings, the process is based on an inexpensive solvent of relatively low toxicity that can be reused over and over again. The residue contains easily separable metals (mainly copper and aluminum); rubber particles, which could possibly be sold as a fuel; and calcium oxide, which can be cleaned and sold as a filler material. The lead-containing PVC would be recycled and thus would pose no environmental hazard. The engineer reportedly can also decolorize the PVC and bring it up to the specifications demanded by manufacturers for virgin PVC. The cost per pound of extracting these materials and refining the PVC is purported to be significantly lower than the PVC market value of approximately 60 cents per pound, meaning potential profits for the processor.
Pyrolysis, another processing option, could liberate the metals in tailings while reducing the plastic and rubber insulation to carbon char and an oil, Byro says. Chlorine and sulfur would be released as acids and could be controlled with lime. The drawback, he notes, is that the carbon char and oil could contain lead residues, posing treatment and disposal problems.
Microwave pyrolysis is perhaps more promising because it offers lower capital costs and simpler operation, Byro points out. Its disadvantages, he says, would be higher energy costs associated with using electricity rather than gas and, again, possible lead contamination in residues.
Burning plastic fluff to generate energy is also possible, though hydrochloric acid is an unwelcome byproduct and the plastic could have a higher value if recycled.
Among other obstacles to recycling is market development for the end product. "Without demand," one chopper observes, “recycling doesn't make any sense." Choppers will also have to either find a reliable consumer/processor for the material or invest in recycling equipment to process the tailings on-site. They have little motivation to make such an investment now, as the payback does not yet justify the outlay. Also, many of the proposed technologies have been conducted only in controlled environments and can't be proven until tested in the field. Reclaimers Inc.'s Feichter sums up, "I think we're closer to treatment solutions than recycling.”
Implementing the Technology
Recycling technology representatives are extremely cautious when discussing their methods, partly to protect delicate financial negotiations and partly to protect "proprietary information" and maintain an edge in what could become a multimillion-dollar market in the next few years. They are critical of the lack of support from chemical/plastics manufacturers, whose limited action is viewed as a way to protect their current markets and products. One technology representative feels that the chemical/plastics companies and the wire and cable manufacturers are only beginning to focus on the vinyl recycling issue. Some choppers also criticize the companies that produce and use lead-containing vinyl insulation for not adopting a “Design for Recycling" mentality, making wire and cable insulation easier to recycle. Industry sources speculate that tailings could, in fact, become useful to the large companies, providing a cheap and steady source of recyclable raw material, similar to the case of aluminum cans and the aluminum industry,
"The big companies don't care if there's an easy solution to the problem," one technology representative says. "They'd rather reinvent the wheel and spend millions of dollars on their own development."
But some chemical companies are seeking alternatives to lead stabilizers in cable insulation. They point out, however, that lead-stabilized PVC is currently the best performer for insulation and the only insulation that passes certain Underwriters Laboratories codes. Terry Mohoruk, manager of vinyl recycling for BFGoodrich (Cleveland), says, "Today, there's not an economical replacement for PVC. However, we in the industry are trying to 'get the lead out.'"
Developing a lead-free insulation will not be a panacea for the industry, one chopper points out, since the majority of a chopper's feedstock is cable and wire that was made 10 to 20 years ago and is just now entering the recycling stream. Therefore, except for industrial prompt, wire and cable with lead-free insulation would not reach chopping lines for years, reducing the short-term benefits lead-free insulation.
To promote recycling, BFGoodrich is working with a plastic recycling facility to process approximately 10 million pounds of plastic tailings per year for use in its products. When successful, the technology win offer the opportunity to process millions of pounds of the estimated 350 million pounds of tailings generated annually. Mohoruk points out that BFGoodrich has successfully extruded wire with 100-percent recycled vinyl insulation, which passed noncritical electrical tests, and the company is running commercial trials on both cable and noncable applications within the utilities industry.
Mohoruk believes that PVC tailings should be recycled extensively into new cable and wire products. This way the material would not be lost in the consumer waste stream.
Working Together for a Solution
Several cable and wire choppers point out that the quest for tailings solutions closely parallels the automobile shredder fluff crisis, which forced the metal processing industry to open up and work together to find a solution. Choppers are still hesitant to talk openly for fear of losing competitive advantages or divulging proprietary information, but attitudes seem to be changing.
"Cable and wire choppers need to be more open with each other with information so we can face the problem and not ignore it," says Dan Gascoyne, vice president of Frank H. Nott Inc. (Richmond, Va.) and cochairman of the copper subcommittee of ReMA's nonferrous metals committee.
Bernie Schilberg of Schilberg Integrated Metals Corp. (Willimantic, Conn.) suggests that wire choppers create an industry fund to confront the problem as a unified force, rather than all fighting the battle individually. "This is a problem we're all in together," he says.
Still, one chopper concludes, "there are no easy answers." The goal is to promote cooperation between corporations, technology developers, and cable and wire choppers to release recycling technology and establish markets to make it work. In the process, choppers will be helping the environment--and their business--by recycling a previously landfilled waste material Perhaps the problems facing the wire and cable chopping industry can become opportunities, ensuring a happy ending.
Public Utilities: To Chop or Not to Chop?
Utility companies have traditionally been a blue chip supplier of scrap wire and cable to choppers. In most cases, a utility sells its scrap to a processor on a yearly contract basis.
But some utilities are considering other options. In 1981, for instance, Florida Power & Light Co. (Miami) established a chopping line and began processing its own scrap. In 1990, the company chopped more than 5 million pounds of wire and cable--at a profit, according to Steve Spivey, the utility’s manager of inventory resources.
Will more utilities follow suit? Should they?
These questions and others were addressed at an American Copper Council (New York City) meeting titled “Investment Recovery Seminar for Public Utilities,” held in November in San Antonio
Although the seminar spoke to utilities, the message for scrap processors was clear: be vigilant about addressing the concerns of utilities and be prepared to work with them in a different context in the future, ensuring a beneficial arrangement for both parties. Otherwise, a utility may contract with a different chopper or open its own line.
If a utility has established a trusting business relationship with a chopper and is receiving reliable service and an adequate financial return, there should be no reason to change the situation.
In today’s tight economy, however, utilities are reviewing all aspects of their businesses, seeking to maximize profits while streamlining operations. If a utility is dissatisfied with its current scrap contract and thinks it can make more money by chopping its own scrap, then establishing an in-house chopping line may be prudent, Spivey told his peers at the seminar.
Utilities considering processing their own scrap, however, must be confident of the volume of scrap they generate, the dependability of that scrap stream, and the financial commitment they can make for equipment and labor, said speaker and panel moderator Frederick D’Agostino, Metal Resources Inc. (Riverside, Conn.). Beyond steady supplies, though, Spivey asserted that “the key to our whole operation is transportation.” A utility must have a trucking network that can deliver new wire and cable to sites and return scrap to a centralized chopping plant, he said.
D’Agostino reminded utilities that their business is providing a service such as power or water or telephone communications, not processing scrap. Utilities would be competing against seasoned choppers, many of whom have decades of experience. Utilities have an advantage in that they generate their own feedstock, but they would have to hire professionals or train current employees to manage the operation and also learn to segregate their scrap by type to recovery the most metal and thus reap the greatest profits.
One other big concern: If a utility becomes a chopper, it opens itself up to the state and federal environmental regulations that apply to the industry--a serious issue in the face of such new rules as the TCLP test.
The speakers noted one other possible option for utilities and choppers: joint ventures. In one scenario, a utility could contract with a chopper to process its scrap. The chopper would then sell the metals to the utility’s rod and cable manufacturer, and the manufacturer would create new wire and cable for the utility.
Even if a utility becomes a chopper, it can still work with other choppers. In times of overflow, for example, Florida Power & Light still contracts the surplus out to other choppers. The key for choppers is to develop an open business relationship with utilities, whether they are contractors, partners, consultants, or even competitors.
“We’re all in this together,” said speaker and panelist John E. Gross, John E. Gross & Assocs. (New City, N.Y.). “Where there are problems, there are also opportunities.” •
The cable and wire chopping industry is facing many new economic and environmental challenges in the 1990s, but pending technology and the promise of greater industry cooperation offer hope for solutions.