May/June 1991
The UBC recycling rate continued its upward climb in 1990, surpassing 63 percent and setting a record for the third consecutive year.
By Robert J. Garino
Robert J. Garino is director of commodities for the Institute of Scrap Recycling Industries (Washington, D.C.).
The goal: Achieve a 75-percent recycling rate for all-aluminum used beverage cans (UBCS) by 2000.
Sound ambitious? Perhaps, but that is the goal of the nation's can makers and recyclers. Will it be achieved? Judging from past performance, it appears that aluminum can recyclers are well on their way to meeting that lofty goal. In fact, one independent source forecasts an 80.5 percent UBC recycling rate by 2000.
Another Year, Another Record
For the third straight year, a record UBC recycling rate was achieved, with the 1990 figure--63.6 percent--bringing the industry that much closer to its 75-percent goal.
How was the recycling rate calculated? First, we multiplied the total number of pounds melted by the number of all-aluminum cans in a pound to arrive at a total can reclamation number--nearly 55 billion, 50 percent more than just three years earlier.
That reclamation number, in turn, was divided by the total number of new cans shipped between October 1989 and September 1990. (Assuming that new cans return to the scrap stream within a few months, this is the 12-month period in which cans recovered in 1990 were shipped.) The result is the annual recycling rate.
While the number of cans reclaimed has grown nearly every year for the past decade, the weight of a single can has dropped gradually, resulting in more cans to the pound. In the early 1980s, for instance, it took 23 cans to make a pound; today, more than 28 cans are required, according to the Can Manufacturers Institute (CMI) (Washington, D.C.). "Lightweighting," as this reduction is known in the trade, ultimately results in less aluminum being consumed, thereby conserving energy and natural resources. Sources say that body stock will continue to be made thinner, with 0.112-inch grade possible in the near future.
Nevertheless, can shipments continue to grow. In the soft drink market, cans are the most popular package, accounting for more than 40 percent of all rigid containers sold. According to the National Soft Drink Association (Washington, D.C.), approximately 94 percent of all soft drink cans are made from aluminum.
Secondary Smelting Consumption Rises
Leading the UBC consumption are aluminum sheet mills, which melted approximately 1.8 billion pounds--or 93 percent--of the total 1.9 billion pounds of UBCs consumed. Although individual company responses are confidential, it is generally assumed that Alcoa (Pittsburgh) is the largest single collector and consumer of UBCs, followed by Reynolds Metals Co. (Richmond, Va.) and Alcan (Cleveland). Industry estimates reckon that the three companies account for more than half of all UBCs recycled.
Secondary smelters also play an important role in UBC recovery. In fact, this year's survey noted a much higher melt rate of can scrap by the nation's secondary aluminum smelters compared with 1989, with more than 56 million pounds melted. Virtually all secondaries that responded reported substantially higher quantities consumed.
Added to this category were companies that, along with identifying the tonnages tolled on behalf of the sheet mills, differentiated amounts they purchased and melted (or converted) for their own customers. These distinctions were also noted by companies that toll and convert UBCs for export resale. Also included were cans purchased and melted for destructive, metallurgical, and chemical uses such as steel deoxidizing and metal coatings
Some clues as to why secondaries consumed more can scrap in 1990 than in previous years can be found by examining 1990 UBC prices. In past years, UBC prices have risen during the first quarter, mainly due to cold weather, which hampers collection, plus the fact that sheet mills start gearing up to meet summer can stock demand.
Early last year, however, prices softened, dropping twice in January to a 30-month low of 46 cents per pound. Only twice in the last four years have processors encountered price cuts during the first quarter of the year. In 1990, secondary smelters were believed to be buying can scrap during this first-quarter price lull.
The can market resisted any upward move until March when UBC prices increased to 51 cents per pound. Prices flip-flopped between May and July but moved sharply higher as the summer ended. History shows that UBC prices often decline at the end of summer; in 1990, however, scrap differentials-as viewed by the secondary smelters in particular-again encouraged smelters to purchase can scrap, thus siphoning off some UBCs to markets other than can sheet. Subsequent higher scrap prices offered by the mills drove some smelters away, but as UBC values trended lower in October, secondary smelters and others were actively looking at UBCs as relatively inexpensive feedstock. Overall UBC consumption by smelters in 1990 definitely increased in response to relatively low UBC scrap values.
UBC Exports Grow
Along with consumption by sheet mills, secondary aluminum smelters, and other domestic use of can scrap such as by steel mills and foundries, significant tonnages of can scrap are shipped abroad annually. Unfortunately, U.S. Census Bureau figures only identify aluminum scrap exports as either "aluminum used beverage container scrap” or "aluminum waste and scrap, other than used beverage container scrap." Hence, it is difficult to know the precise amount of UBCs that were melted into a nonspecification remelt item and exported as "aluminum waste and scrap."
Nevertheless, according to this year's survey, exports of UBC scrap--identified by the Institute of Scrap Recycling Industries (ISRI) (Washington, D.C.) as remelt ingot and UBCs--were up 5.6 percent. Of the more than 40,000 tons exported, less than 10 percent was believed to have been UBCS, with the balance being remelt scrap. As a percentage of total U.S. aluminum scrap exports, UBCs (including remelt) account for less than 10 percent of that figure. According to Census Bureau figures, more than 467,000 tons of aluminum scrap were shipped abroad last year.
A Decade of Surveys
The National Association of Recycling Industries, one of the predecessor organizations of ISRI, began its all-aluminum can recycling survey in 1981. That year, more than 1.018 billion pounds of UBCs were reclaimed by aluminum sheet mills, secondary aluminum smelters, and exporters. Using a can weight of approximately 23 cans per pound and an annual production estimate of 47.6 billion cans, the 1981 survey calculated the UBC recycling rate at 49.2 percent.
Since then, improved and expanded canvassing of the scrap processing and consuming industries has resulted in more accurate and complete data on UBC recycling. In 1987, ReMA launched a cooperative effort with the Aluminum Association (Washington, D.C.) and CMI to improve and standardize reports from the industry. That year, the survey showed that more than 1.3 billion pounds of UBCs were recovered, for a recycling rate of 51.5 percent.
Not only were established companies using more can scrap, but firms heretofore missed were counted for the first time. The survey, which is stiff a joint effort, seeks out new melters of UBCs every year.•
The UBC recycling rate continued its upward climb in 1990, surpassing 63 percent and setting a record for the third consecutive year.