July/August 1989
Are your ears still ringing
from the sound of your last rejection? You may have been able to prevent
that by following the advice offered here. Addressed are rejections as a
whole, with an emphasis on nonferrous scrap; additional commentaries cover
stainless steel and nickel alloy specifically, as well as iron and steel.
By A. Sheldon Derer
A. Sheldon Derer is president of Shelmet Corporation, Delray Beach, Florida.
The most jarring phone call to a scrap broker or processor is the one in which the caller says, "The load you shipped us is rejected." And so begins another chapter in the story of consumer and supplier.
Are
there more rejections currently than there used to be? It seems so. Have
consumers changed their specifications for scrap? Most say they haven't.
Is the scrap shipper sending scrap of a lesser quality? Most say they're
not. Then why the problem?
The
scrap supplier is becoming more and more important to the consumer as a
major supplier of raw materials. As the role of scrap increases, so does
the requirement for quality. This applies to the materials not only for
sheet mills and extruders, but for the secondary smelters as well.
A
major factor that must be recognized by the shipper is that today there
are many relatively new consumers of scrap. As a result, many of them have
new requirements for material, packaging, and scheduling. What has been
the custom in the past may not apply today.
The
consumer's product determines the scrap mix he allows. What may be an
excellent feed for one mill could be poison to another.
Know
What's Needed
The
purchase order is where it all begins. Here, things too often are taken
for granted. Both the purchaser and the seller must be sure that the
quantity, packaging, and shipment period are clearly specified, and that
the material is fully described. The supplier should ask questions and be
sure he gets complete answers. Nothing should be taken for granted. Not
every consumer has the same specifications because of his particular
requirements and facility. Be sure everyone is speaking the same language.
This is the first and one of the most important steps to avoid problems.
Many
times the seller of the material does not relay all the necessary
information to his people responsible for grading, packaging, and loading.
This must be done, preferably in writing. Avoid the verbal order. That
all-important word comes into play: communicate.
Reasons
for Rejection of Nonferrous
What
are the reasons for rejection of nonferrous scrap? The most common reasons
usually fall into these categories:
- contamination,
-
improper
packaging, and
-
insufficient
preparation.
Here
are some examples:
Contamination.
- loose
or attached iron in the load;
- painted
material mixed with what was supposed to be bare material;
- mixed
alloys in what was supposed to be segregated alloys;
- excessive
oil in material;
- water
in the load--which could be explosive in the melt.
Improper
packaging.
- material
loose when it was supposed to be packaged;
- poor
packaging--not able to unload trailer due to shifting;
- potential
for damage to trailer when unloading loose or packaged material.
Insufficient
preparation.
- purchase
order instructions not followed;
- size
specifications not followed;
- disregard
for appearance of product.
In
some rejection cases, it is possible to work out a price reduction as a
means of compensating a consumer for extra handling. At other times,
however, the entire load must be returned to the shipper or shipped to
another consumer who can handle it--generally at lower prices. No matter
how a rejection is handled, it is a costly situation for the shipper, and
in many cases for the consumer because of the extra handling involved.
Prevention
the Best
Policy
Many
of these situations can be prevented by using a formalized inspection
system prior to shipping. Inspections should not be left to the discretion
of any available employee but should be given the importance they deserve.
The values of today's loads necessitate more than a peripheral
glance--costs of rejections can run thousands of dollars.
A
thorough inspection covers these questions:
Is
the material being loaded the same material that was sold? Check the
contract or purchase order.
-
If
it is not, did you get permission to ship it?
-
Is
the material clean and free of unwanted contaminants?
-
Is
the material correctly and securely packaged?
-
Are
packages tagged with material identification? (Weights also can be
helpful.)
Now
that I've emphasized the importance of the shipper methodically checking
his load before shipping, here comes the fly in the ointment (better known
in our industry as the 3105 or 3004 in the 3003).
In
many cases, when the shipper is told by a consumer that an alloy other
than the one requested was mixed in what was to be a segregated alloy
load, the shipper yells "foul" or "impossible."
Impossible because it comes directly from a plant that supposedly uses
only the specified alloy. What happened? Possibly one of two things:
-
the
plant changed or added to its alloy usage and did not notify the scrap
processor, or
-
the
alloy supplier to the plant substituted alloys with or without advising
the plant.
What
should the processor do? First, he must request samples of the unwanted
alloys from the consumer. He then should present the identified samples to
his supplier and request the appropriate price adjustment. Then he either
should find out if the mix can be prevented in the future or should adjust
his buying price accordingly.
As
a preventive measure, the processor periodically should check with his
suppliers to see if there have been or will be alloy changes.
It
is extremely important that the scrap supplier be fully aware of his
consumer's scrap specifications. He should ask questions and be certain of
what is required prior to the sale being made. If the processor has a
doubt, he should have his supplier describe fully what it is he is
selling. And, most important, the processor must pass information about
the consumer's requirements to his people responsible for preparing and
shipping the product.
There
is certainly no instant cure for rejections, but the prevention pill needs
to be swallowed first by the shipper. Not only should the material be
sorted and labeled properly, it should be loaded in a presentable fashion.
The initial reaction to the appearance of a load by the consumer can
affect his ultimate decision: acceptance, downgrade, or outright
rejection.
The
relatively low costs involved with the proper preparation, packaging, and
loading of the scrap product more than offset the costliness of rejection.
It's one investment with a sure positive return of dollar and reputation.
An overview of specifications and information on using the ReMA Scrap Specifications Circular 1988 is offered in the March/April 1989 Scrap Processing and Recycling feature "Specifications: The International Language of of Scrap."
Iron
and Steel Scrap Rejections
By
John David Isaacs
Investment
is the answer to many scrap business ills, but perhaps most importantly to
rejections. To prevent the often-great expense and the horrible hassle
triggered when a consumer finds something wrong with one of your
shipments, you must invest a lot of time and money in several aspects of
your operation.
First,
you must invest in processing equipment that will ensure clean scrap.
Consumers are requiring increasingly cleaner raw material. In fact, more
and more are requesting known analysis material. In my opinion,
specifications for iron and steel scrap are going to get tougher.
You
also must invest in the inspection process-this investment is paramount in
both your receiving and shipping operations. Three full-time inspectors
visually check scrap coming into our ferrous facility, which handles
approximately 15,000 tons a month. Every load is inspected for
contamination, which can be in the form of nonferrous material, dirt,
nonmetallics, or possibly hazardous waste. An inspection ticket is
completed and signed by the inspector for every load. In case of a problem
load, the driver also verifies the content of the load and signs the
ticket. Outgoing iron and steel scrap is inspected visually by three to
four employees devoting 20 to 40 percent of their day to this process.
I
recommend, too, that processors of ferrous scrap invest the time it takes
to be positive that consumer contracts are comprehensive and are followed.
Also, check billing carefully. Unintentional mistakes can easily be made.
In
summary, spend the time to find out exactly what your consumer wants, and
make sure every aspect of your operation is geared toward delivering the
product you promise.
John
David Isaacs is president and CEO
of American Iron and Supply Co.,
Minneapolis, and president of the
Northwest Chapter of the Institute of Scrap Recycling Industries.
Stainless
Steel and Nickel Alloy Scrap Rejections
By
Gerald W. Stewart
The
reasons for consumer rejections of stainless steel and nickel alloy scrap
are generally the same as those for most other nonferrous metals:
contamination, improper preparation or packaging, and shipment by an
unsuitable method. And the rejections are handled in a similar manner.
Two
major differences, however, are the shipment of alloys with a guaranteed
analysis to a specialty melter, and the shipment of stainless steel to a
consumer with limited capacity to prepare, dilute, or otherwise use the
objectionable material.
In
the case of guaranteed-analysis material, the scrap is not rejected, but
the consumer returns the off-analysis metal made from the processor's
material and charges the processor a large sum of money for the lost heat.
Since
the vast majority of stainless and nickel alloy scrap does not move
directly from the generator or supplier to the end-consumer, but rather to
a processor who specializes in preparation of the material for final
consumption, most suppliers of this type of scrap are exposed to possible
regrading or resorting of their material rather than outright rejection.
Most
common are regrades or price reductions for oversized material; material
with ferrous, nonferrous, or nonmetallic attachments; and so-called sealed
units such as beer kegs and small tanks or vessels that have not been cut
or punctured.
Over
the past few years, one other type of contamination has been discovered
that results in the total rejection of the contaminated material without
recourse or negotiation: radiation. Most major processors and consumers of
stainless steel have installed radiation detectors to protect against
possible harm to their employees and against contamination of their scrap
inventories and facilities. It would behoove any scrap supplier or
processor who handles obsolete fabricated stainless steel materials to
invest in some type of radiation detector to save himself from disastrous
expenses and possible loss of his business.
Editor's Note: For detailed information on radiation and detectors, see "How Detection Can Mean Protection," on pages 107-112.
Gerald
W. Stewart is senior trader for Steelmet, Inc., McKeesport, Pennsylvania.
Are your ears still ringing from the sound of your last rejection? You may have been able to prevent that by following the advice offered here. Addressed are rejections as a whole, with an emphasis on nonferrous scrap; additional commentaries cover stainless steel and nickel alloy specifically, as well as iron and steel.