Recycling Product News Logo

A look at the 2018 nonferrous market: the Wrath of the Goddess of the Earth

2018 – the year of the nonferrous scrap market’s downfall – or is it?

0151/37696_en_0ef2e_40206_everison-kamyar-0030-high-res-1.jpg

Company info

905, 4789 Yonge St
Toronto, ON
CA,

Website:
everison.com

Read more

This year has gone down as one of the toughest years in many for the global nonferrous scrap industry and the recycling industry overall. With new initiatives getting launched in every corner of the world to reduce waste and increase material recycling for the manufacture of new products, one would think there would be less ending up in our landfills. Unfortunately, that simply has not been the case.

Operation Goddess of the Earth is a three-phased initiative started by the Chinese government in April 2009. One of the policies enacted since then has been to reduce the country's foreign scrap intake - to help protect its environment and to focus more on recycling local scrap. The latest phase of this initiative, dubbed Blue Sky 2018, continues to enforce significant limitations on the type of scrap accepted at Chinese borders, and on recovery percentages, to ensure that China is only importing premium grades of the world's scrap.

These policies mean there is virtually no tolerance for contaminated material shipped from foreign markets, and there are vigorous scrap inspections at the point of origin. This kind of policy costs buyers and sellers of scrap precious time, money, and poses numerous administrative challenges.

Until a few years ago, many countries were counting on China to take as much as 70 percent of their scrap, some of which consisted of lower grade nonferrous metals. Yard infrastructures and other facilities that would generate nonferrous and other scrap were geared towards pushing this kind of material out of their system towards foreign markets such as China where not only the processing cost was lower, but where environmental restrictions were also not as rigorous. This was true especially for more developed countries where labour and ground logistics are so expensive that it was much cheaper to load all materials into a container and ship it to the other side of the globe, rather than moving it to another province or state where often an hour's wage would be equal to a whole day's wage in another country.

However, significant changes, both expected and unexpected, have started affecting the scrap industry since 2016, and it has become more and more apparent that our current global market situation for scrap materials is not just another passing phase. Since the Chinese government started implementing their restricted scrap import policies, businesses now know they will not be experiencing the same global market environment again in the foreseeable future. 

Historical copper prices YTD 2018 (Source: LME).

For nonferrous, 2018 was a downward trend continuation of what was already happening in 2017. One reaction to this has been that many scrapyards throughout the developed world have started adding to their downstream processing - to either achieve higher grades of nonferrous scrap that passes their threshold for export, or create a product that would be acceptable to the local market. However, this change has come to recyclers at a cost. It has forced significant capital costs upon recycling businesses and at the same time, due to higher supply and lower demand in the local market, it has put more and more downward pressure on profit margins. 

With the trade war between China and the U.S. already in place, we have also been witnessing a decrease in the overall prices of raw material, including nonferrous, which has in turn taken its toll on the recycling market. To complicate matters further, there is almost a unilateral agreement among economists that the longest bull market in U.S. history will be running out of fuel in the next few years, perhaps triggering years of recession when it ends. After all, scrap demand is in correlation with manufacturing output.

As for businesses in China, and in other large economies such as India, there are two main scenarios: one is that the main importers of nonferrous scrap are now considering investment in the country from which they were purchasing most of their material, so processing can be done prior to shipment. This makes it easier to continue importing, but as discussed above, at a lower profit. 

On the other hand, in these same countries we are seeing an unprecedented amount of scrap businesses shutting down, either voluntarily or because governments and regulators are cutting them down for noncompliance issues and violations. At the same time, we are witnessing new businesses flourishing (with similar identities and owners) in other third-party countries like Vietnam and Malaysia. Over time this has triggered their government's reaction to the sudden, rapid increase of importation of nonferrous and other scrap. The local infrastructure of these markets has not been set up to replace the volumes that China used to take, and they will almost certainly never be able to replace China as the main importer of lower grade scrap. 

And while we see new preventative, environmentally conscious measures being taken by the authorities in these countries, very similar to what the Chinese government has been doing, one would wonder if it's only a matter of time until there will be a similar clamp down on new businesses. More importantly, what's next if something like this happens?

So far, we have not had enough time to adjust and look for more suitable and sustainable solutions to the challenges posed by this shift, especially with respect to finding alternative nonferrous and other commodity end markets for the large amounts of recyclable materials that continue to be created.
We expected the downtrend trajectory for the price of nonferrous in 2018. We can only wait and see if 2019 will be any different.

Kamyar Lolavar Tehrani is the business development manager of Everison International Group Inc.

This article was originally published in the November/December 2018 edition of Recycling Product News, Volume 26, Number 8.

More from Metals Recycling

Dual-drum magnetic separator from IMI designed for mixed metals recovery application

Industrial Magnetics, Inc. (IMI) recently designed a dual-drum magnetic separator to meet the high purity level demands of a customer's mixed-metals recovery application. According to IMI, the customer needed to remove ferrous metal contaminants from a conveyed product stream of non-ferrous metals, such as aluminum and titanium, which would then be resold as raw materials for further processing. A high purity outcome was essential for capturing the maximum selling price at market.

Regens Metals using Gensco cable strippers to meet market demands

Owned by Logan Baniulis, Regens Metals is located in Estevan, Saskatchewan. Baniulis, with a background in the waste hauling industry for three decades, turned his focus to scrap metal close to five years ago. In October 2018, he opened a new scrapyard in Estevan, relocating from the small rural town of Bienfait, Saskatchewan. At the new, larger location, Regens Metals buys and sells ferrous and nonferrous scrap, some e-waste and plastics, and runs their home base for the company's hauling and container services, as well as their farm and industrial site salvage and cleanup business. 

Hitachi High-Tech Analytical Science launches Vulcan+ laser analyzer range

Hitachi High-Tech Analytical Science Corporation, a wholly owned subsidiary of Hitachi High-Technologies Corporation, has launched an advanced line of handheld laser induced breakdown spectroscopy (LIBS) analyzers, known as Vulcan+. The range sees updates to the existing Smart and Expert models, while a new Optimum+ model is added to the product line. The whole range maintains Vulcan's market leading analytical capability, according to Hitachi.

Subscribe to our free newsletter

Get our newsletter

Learn more

​Rigaku Analytical Devices announces partnership with Metal Analysis Group

Rigaku Analytical Devices, Inc. has announced a new partnership with Metal Analysis Group, a premier analytical consulting firm with expertise in elemental analysis for metal production, fabrication, positive material identification (PMI), metal recycling and testing markets.  Based in Houston, Texas, the consulting firm, with its team of scientists and engineers spread throughout North America, will support Rigaku KT Series laser induced breakdown spectroscopy (LIBS) product sales and support in the USA, Canada, and Mexico.  The partnership couples Rigaku Analytical Devices' state of the art handheld technologies, with Metal Analysis Group's value added programs, including: affordable lease and rent-to-own plans; industry-leading product and application support; and convenient regional support.

Sennebogen to bring world's largest material handler to North America

SENNEBOGEN has announced plans to deliver the first of its new record-setting 895 E Series models to North American customers next year. At an estimated 390 tons and reach of more than 130 ft. (40 m), the 895 E is the largest material handler ever built, according to Sennebogen. The gigantic 895 E was first unveiled to the public at the firm's world headquarters in Straubing, Germany, coinciding with the Bauma 2019 exposition, which took place in nearby Munich this past spring.

ISRI’s commodity roundtables offer new slate of experts, with focus on next boom market

As scrap recyclers and brokers continue to seek new outlets for recycled commodities, market participants are increasingly interested in where demand will come from next. To meet that need, the Institute of Scrap Recycling Industries' (ISRI) 2019 Commodity Roundtables Forum will offer fresh new perspectives and insights on the commodity markets and examine "the next boom market." The annual event which attracts processors, brokers, traders, and other scrap recycling professionals, will take place this year from September 11-13 in Chicago.

China’s latest tariff announcement affects scrap commodities

In apparent retaliation to the U.S. Administration's recent announcement of tariffs on Chinese products to begin in September and December, the Chinese government announced last week its intent to levy additional tariffs on $75 billion worth of goods from the United States. These tariffs add on to those already in place from announcements in 2018.

Recycling and radiation control industries join with Indiana Department of Homeland Security to promote radiation safety

Undetected radioactive material can have severe consequences in a scrap yard. In an effort increase awareness around radiation safety, the Institute of Scrap Recycling Industries (ISRI), in collaboration with The Conference of Radiation Control Program Directors (CRCPD) and the Indiana Department of Homeland Security (IDHS), today released an educational video to help recycling workers in identifying radioactive sources, isolating the material, and notifying the proper authorities. 

Sennebogen 830 E electric drive system allows for excellent on-site mobility

According to SENNEBOGEN, their eGreen electrically powered material handlers have been proven to reduce operating costs by up to 50%, when compared to the same machines powered by diesel. Available from the factory on any SENNEBOGEN purpose-built material handler, the eGreen electric drive has been widely adopted in applications from scrap recycling to barge loading.

New handheld analyzer uses LIBS for fast, accurate carbon and alloy measurement in the field

Designed for scrap recyclers, petrochemical plants, fabricators and quality control departments seeking to measure low concentrations of carbon in metal, along with a range of elements, Thermo Scientific's new lightweight Niton Apollo handheld LIBS analyzer features laser-induced breakdown spectroscopy (LIBS) for speed, increased accuracy and greater mobility.

Painting the right picture for recycling

The world needs more positive recycling stories. Article after article paints an inaccurate picture of our industry, often implying that recycling is pointless. Beyond the depressing side effect of being constantly inundated by negative news, what is the true cost of this type of media coverage and what can we do to protect our industry from it? 

Subscribe to our free magazine

Get Our Magazine

Paper or Digital delivered monthly to you

Subscribe or Renew Learn more

Taurus Diablo scrap & auto baler latest available from ELV Select

The Taurus Diablo scrap metal and auto baler DB62, available in North America through Ontario-based ELV Select, is designed for baling of cars and metal shred. According to ELV, these units are built to make very dense bales, with maximum density of 1,000 kg/m3, and to be quick and easy to transport as well as simple to operate, making them ideal for companies with multiple yards or for rental to other metal recyclers.

Crushing it at Silver Creek Recycling

Silver Creek Recycling, located in Redcliff, Alberta, is a family business owned by Danny and Twila Luba and their son Bradyn. Bradyn's wife, Amanda, is a registered social worker. Danny and Twila Lubas' two daughters are Tajia, a business graduate working in commercial lending, and Taryn, a registered nurse. The family has operated Silver Creek Steel Mobile, a mobile recycling operation, since the late 1990s, servicing industrial locations throughout Saskatchewan, Manitoba and Alberta, from large auto wreckers and landfills, to estate cleanups and oilfield demolition. 

Eriez UHF Eddy Current Separator helping Waukesha Iron & Metal recover metallic fines from ASR

Eriez introduced its Ultra High-Frequency (UHF) Eddy Current Separator in 2016 as a way for its auto shredding customers to generate significant additional revenue by recovering aluminum, copper and other nonferrous fines that had formerly been lost within the larger auto shredder residue (ASR) stream.

Canadian government to invest $20 million in Gerdau Ameristeel

July 26, Jennifer O'Connell, Parliamentary Secretary to the Minister of Finance (Youth Economic Opportunity), on behalf of the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development, announced a $20-million investment in an $81.2-million project that will help Gerdau Ameristeel upgrade its facilities in Whitby and Cambridge, Ontario. The investment will modernize steel production lines, reduce manufacturing costs, reduce the amount of scrap metal going to landfills and improve production capability for billets, which are semi-finished long steel products used to produce other steel-based products such as angles, rebar, flats or channels. The investment will also create 108 jobs and maintain 710 more in Whitby and Cambridge.

New Cutmaster Black Series plasma cutting consumables last 60% longer

Thermal Dynamics, an ESAB brand, has launched its new Cutmaster Black Series of enhanced performance plasma cutting consumables, which extend operating life by 60 percent compared to standard life electrodes. They are featured on the SL60QD 1Torch, which comes with the Cutmaster 60i handheld air plasma cutting system. Coupled with internal enhancements on the Cutmaster 60i, the new electrode design increases the unit's rated cut and piercing capacity to 3/4 in., a 16.6 percent improvement. The Cutmaster 60i can sever metal up to 1-1/2 in.

Subscribe to our free newsletter

Get our newsletter

Learn more

Bunting Magnetics celebrating 60 years in business

On August 3rd, 2019, Bunting Magnetics Co. will be celebrating its 60th anniversary as a company. Bunting Magnetics Co. is an industry leader in the design, manufacture, and sales of cutting-edge magnetic equipment used in applications such as magnetic separation, metal detection, conveyor systems, and magnetic printing cylinders. The main industries the company serves include the food and pharmaceutical industries, plastics, recycling, mining, printing, manufacturing, automotive, chemical, ceramics, textiles, and more.

Lindner to demo screening and shredding solutions at RecyclingAKTIV 2019

A multitude of different configuration options make Lindner's mobile shredders and system solutions the perfect choice for universal waste processing. The company will be demonstrating just what is possible in the world of waste wood and light scrap recycling from 5 to 7 September at RecyclingAKTIV 2019 in Karlsruhe, Germany. 

Eriez P-Rex rare earth scrap drums provide 50 percent greater recovery of ferrous from bottom ash for Covanta

Engineers at Covanta, one of the world's largest owners and operators of facilities dedicated to recovering energy from waste, reported an immediate 50 percent improvement in recovery of ferrous materials from bottom ash after upgrading a conventional scrap drum to an Eriez P-Rex®(Permanent Rare Earth Xtreme®) Scrap Drum at one of the company's United States facilities. 

American Manganese produces high purity material from pilot plant project

American Manganese Inc. (AMY) is pleased to report that the Company's contract lab, Kemetco Research Inc., has produced a high purity NMC (Nickel Manganese Cobalt) hydroxide filter cake (shown above) during the final stages of the RecycLiCo Pilot Plant project. The filter cake was produced using a 35L batch sample of Pregnant Leach Solution that was collected during Stages 1 and 2 of the Pilot Plant project.

Sierra Recycling & Demolition celebrates 60 years

Celebrating their 60th year of commitment and service to their customers and the recycling industry, Sierra Recycling & Demolition was started by Ben Sacco in 1959. Now the sister company of Sierra International Machinery, the California-based recycling equipment specialist, Sierra has deep roots in recycling, and they have for 60 years. Based on this foundation, Sierra International Machinery states: "Our equipment is designed by recyclers for recyclers. At Sierra, we have the same experiences and challenges that other recyclers have, and we know the problems and the issues other recyclers face. We use the experiences from Sierra Recycling and Demolition, our engineers, operation managers, and service technicians to produce superior machines that we actively use in our own yard."

Collaboration between Goudsmit Magnetics and Sortatec results in a single separator for waste flows

Cooperation between Dutch company Goudsmit Magnetics of Waalre and German company Sortatechas resulted in a mobile metal separator that separates both ferrous and non-ferrous metals from bulkflows. The companies will jointly demonstrate the Goudsmit Mobile MetalXpert at the Recycling Aktivin in Karlsruhe, Germany. 

CM introduces Solo single-shaft shredders lineup

CM Shredders has introduced a new single-shaft shredders line that features a "Smart-Ram" system which automatically adjusts ram pressure for maximum efficiency. The new CM SOLO series is ruggedly built and engineered for performance, durability and low cost of operation. Units produce minimal dust and require reduced power usage and manpower.

Subscribe to our free magazine

Get Our Magazine

Paper or Digital delivered monthly to you

Subscribe or Renew Learn more