Transactions tracked by RMDAS show 23 percent drop in prime grades in just 30 days.

Steel mills in the United States paid some 23 percent less for prime grades of ferrous scrap in July compared with June, according to transactions tracked by the Raw Material Data Aggregation Service (RMDAS) of Pittsburgh-based MSA Inc.

Purchases made from June 20 to July 19 show steel mills paying an average of $500 per ton to procure prime grades. That represents a 23 percent drop from the $650 per ton average recorded from May 20 to June 19.

Prices for obsolete grades tracked by RMDAS —No. 2 shredded and No. 1 heavy melting steel (HMS) scrap—fell by just $34 and $40 tons respectively. Those July price drops represent a 7.1 percent decline in shred’s value and a 10.1 percent drop for No. 1 HMS.

The previous drops in ferrous pricing in June caused some speculation the market may have hit its bottom. Unfortunately for sellers of ferrous scrap, later bids from overseas buyers and unenthusiastic domestic buying in early July proved the floor had not yet been reached.

After lower June pricing trends were made clear by RMDAS tracking and Davis Index surveys, one ferrous trader told Recycling Today a one-two punch of rising fuel costs and less money received at the scale “is causing some peddlers to just give up and stay at home.”

Although demolition projects continue to bring plate and structural and HMS grades into yards, a downward trend in ferrous prices is almost always followed by a downturn in demolition activity as property owners and contractors hold off while waiting for a price rebound.

A scrap processor in the Great Lakes region refers to the recent market as “stressful” and fears the downward momentum for prime grades may not have ended. “I think primes still have another $100 to go,” he says

As the trader indicated, the processor also sees a shift in the supply landscape that could eventually contribute to a price rebound. “Flows are definitely down,” he says. “I’d say there has been a 20 to 30 percent reduction.”

On the demand side, Washington-based American Iron and Steel Institute (AISI) says in the week ending July 16, 2022, steel production in the United States was down 0.6 percent from the previous week and had dropped 6.7 percent compared with the same week in 2021.

Year-to-date steel production in the U.S. through July 16, 2022, stands at 49.35 million tons, which is down 2.5 percent from the 50.62 million tons made during the same period last year.

The export market remains unsteady, with East Coast scrap shippers likely having noticed that steel output in Turkey has dropped by 2.8 percent year on year. West Coast shippers, meanwhile, have likely felt South Korea’s 3.4 percent decline in year-to-date output.

Government establishes centralized iron ore mining and procurement entity.

The central government of China has established a state-owned enterprise (SOE) designed to manage the mining and inflow of iron ore into the world’s largest steelmaking country.

Metals business information firm Davis Index, citing a China-based business registration portal, says the China Mineral Resources Group (CMRG) is being established as an SOE to “supervise the entire chain of production and purchase of iron ore from Chinese companies abroad.”

Most of China’s largest steelmakers are themselves SOEs, although privately held companies also produce steel in China.

Davis Index says the company is being funded at a level of nearly $3 billion dollars, and that it will “oversee the activities of [iron] mining activity abroad.”

It is unclear to what extent participation with CMRG will be either voluntary or mandatory for steel producers. Beijing-based SOE Cofco handles some 114 million metric tons of staple food crops annually and has some 34 million metric tons of port capacity under its control. It does not, however, have exclusivity in that market.

Traders of scrap metal into China, which includes aluminum and copper and a modest amount of ferrous scrap, will likely be watching to see if the CMRG procurement model seeps into other metals industry sectors in the nation.

Reports from Bloomberg and other media sources indicate that while one of CMRG’s lead executives has a background with steelmaker Baowu Steel Group, another is a former board chair of Aluminum Corp. of China Ltd. (Chalco).

Bale prices have been trending downward this summer.

Pricing for bales of polyethylene terephthalate (PET) bottles and high-density polyethylene (HDPE) bottles are softening as supplies of these materials increase, according to sources whom Recycling Today contacted in mid-July.

 A contact with an HDPE reprocessor based in California says plenty of supply is available, noting that volumes began increasing over the last two months. He adds that little export activity off the West Coast also has contributed to the “abundance” of scrap available.

The HDPE reprocessor says his company has reached the point where it is turning potential suppliers away as it’s reluctant to build inventory with the possibility of a recession looming.

A PET reprocessor with operations in the Southeast and Northeast says PET bale prices also are softening as supply increases, which is traditional in the summer months. However, the reprocessor notes that a major buyer of PET bales also is out of the market because of unplanned maintenance and therefore not purchasing material.

“In line with bales, flake pricing is beginning to reduce, though rPET (recycled PET) pellet pricing is still elevated due to the tightness and increased prices in virgin PET,” the reprocessor adds.

The PET reprocessor also points to the effects of rising inflation, which reached 9.1 percent year over year in June, the largest 12-month increase since 1981, according to The Economics Daily produced by the Bureau of Labor Statistics within the U.S. Department of Labor. “The market is seeing the first signs of pressure on consumer finances, impacting the fiber market [and] leading to lower volumes of rPET usage,” the reprocessor says.

“The rPET market dynamics moving through Q2 have remained relatively stable, bearing in mind the rapid rise in prices we saw during Q1,” the PET reprocessor continues. “We have seen much more volatility in virgin PET than rPET during Q2.”

The HDPE reprocessor says natural bottle bales are selling in the range of 45 cents to 48 cents per pound as of mid-July, while mixed-color bales are between 15 cents and 17 cents per pound. He says the decline in pricing started gradually but has been more substantial recently, ranging from 15 percent to 20 percent.

With prices declining and the potential for a recession, the HDPE reprocessor says companies are “fearful” of holding too many bales in inventory.

He describes sales of his company’s recycled HDPE as being “fairly robust,” though he worries that could change if the advance estimate for gross domestic product (GDP) in the second quarter, which the Bureau of Economic Analysis in the U.S. Department of Commerce is scheduled to release July 28, reveals a decline.

While a recession is defined as a period of sustained weak or negative growth in GDP that is accompanied by a significant rise in the unemployment rate, the HDPE reproccessor says the “lack of employees is the biggest elephant in the room,” noting that many companies are struggling to fill open positions.

On the bright side, he says freight rates "are definitely going in the right direction," adding that compared with December of last year, long-haul trucking rates have decreased by 35 percent to 45 percent, while short-haul rates have declined by 15 percent to 20 percent. 

The goal is to prevent 1 million metric tons of waste going to landfill annually.

Ineos Olefins & Polymers Europe has invested in multilayer, blown line technology with machine direction orientation (MDO) supplied by Hosokawa Alpine, an equipment manufacturer based in Augsburg, Germany. The company says the technology will enable it to work with converters, brands and retailers to develop easy, more recyclable flexible packaging film.  

The investment also creates the potential to prevent about 1 million tons of waste per year from being sent to landfill or incineration.  

Using the multilayer, blown line technology with MDO, Ineos and partners will work together to develop, design and produce polyethylene and polypropylene-based flexible packaging film using fewer polymers, increasing the recyclability of the product.  

Ineos says flexible packaging films are a low carbon solution for transporting food and other goods and they increase food shelf life, helping consumers manage household bills. However, today’s multimaterial products combine polymers from different chemical families, making them difficult to recycle.  

MDO heats and stretches polymer films to improve their physical and barrier properties, enabling them to be used in different product applications. Ineos says it is the only raw material supplier to have invested in an inline MDO-multilayer line from Hosokawa Alpine.   

The line will be installed in Ineos’ research and development labs in Brussels, Belgium, in 2023. There Ineos will develop mono-material flexible film packaging products. Ineos says it will leverage this capability and its expertise in resin design to work alongside partners on new generations of resins engineered for flexible packaging products.  

“This investment is further evidence of our commitment to taking action across the value chain to create a more sustainable future,” says Rob Ingram, CEO of Ineos O&P Europe North. “Flexible packaging films keep our food fresh and safe to eat, but we recognize and share people’s concerns about plastic waste.”  

Other examples of action being taken across the value chain include:  

building Project One, the most environmentally sustainable cracker in Europe and the largest investment in the European chemical sector in a generation;  

conducting a feasibility study into the construction of a 100-megawatt water electrolysis plant for producing green hydrogen at the company’s site in Cologne that could cut carbon dioxide emissions by more than 100,000 metric tons annually; and

launching the Recycl-IN polymer range, which compounds postconsumer recycled plastic with new highly engineered virgin polymers to meet the demand for recycled products that meet high-performance specifications.  

ISRI, NWRA and SWANA say the EPA should consider developing best practices and labeling guidelines to include batteries of all sizes and chemistries, among other things.

The Institute of Scrap Recycling Industries (ISRI), the Voice of the Recycling Industry™, National Waste and Recycling Association (NWRA), and Solid Waste Association of North America (SWANA) issued a joint letter to EPA Administrator Michael Regan citing best practices for safe recycling and labeling of lithium batteries. The letter is in response to the EPA’s Request for Information on develping best practices for collecting batteries to be recycled and voluntary battery labeling guidelines.  

The three groups say lithium batteries power everything from electronic devices to onboard automobile systems. However, the increased usage poses serious fire risks and safety challenges for consumers and the recycling industry.   

“It is imperative that a clear path is delineated for the responsible recycling of batteries,” says ISRI President Robin Wiener. “By joining together to provide comments to the EPA, our organizations are offering solid solutions to minimize the risks of fire and injury that occur in recycling operations.”   

The letter states fire hazards are increasing as more lithium-ion batteries improperly placed in curbside residential waste or recycling collection containers and bags. Once in the recycling or waste stream, these batteries become fire risks as they get mixed with tons of materials and placed in hot temperatures under significant compression.  

Even when taken to an appropriate battery collection facility, fires remain a risk. The advantage is that a facility will handlethe batteries to minimize the risk of the fire starting and spreading, unlike in a landfill, material recovery facility (MRF), transfer station or collection vehicle. Regardless, this is still an ongoing concern for any facility that collects batteries in bulk, according to the letter.  

Development of guidance for battery collection facility staff to identify batteries by chemistry, separate and handle them appropriately, and how to handle them in case of damage or fire would be useful to help minimize the risk of catastrophic fire. Education for those handling the batteries would be useful for many communities that manage their own battery collection.  

“SWANA is very concerned about the continued uptick in fires at recycling facilities and other disposal sites, often caused by lithium-ion batteries,” says David Biderman, SWANA executive director and CEO. “These fires threaten workers’ lives and operations at these facilities and undercut EPA’s ambitious National Recycling Strategy. We can’t recycle discarded items at a burnt-up MRF.”  

The group says the only way to identify and detect these batteries is visual, so there is no easy method to screen the batteries out of the incoming loads. Commingling with recyclables, consisting of plastic and paper that provides a significant quantity of readily combustible material, magnifies the problem.  

Due to risks batteries have in curbside recycling and in household waste, batteries are best managed at dedicated drop-off sites. For battery collection to be effective, it needs to be convenient and safe, according to the letter. The group suggests the EPA should consider including convenience standards for battery drop-off locations as part of its best practices.  

The letter also points out the need for a strong, ongoing public information campaign to alert consumers on how to properly dispose of batteries.   

While most of these fires stem from the mismanagement of consumer lithium batteries, larger batteries such as those in electric vehicles also pose risks. The organizations recommended that the EPA develop best practices and labeling guidelines to include batteries of all sizes and chemistries. They also advised the EPA to proceed with a parallel track for best practices and labeling of the larger lithium-ion batteries.   

“Our goal is to lower the risk of fires caused by lithium-ion batteries,” says Darrell Smith, NWRA president and CEO. “We appreciate the opportunity to provide comments. We believe our recommendations will help reduce fires caused by these batteries at our recycling facilities.”