News from Recycling Today
Dave Schilberg of Prime Materials Recovery and Joe Pickard of ISRI.
Randy Goodman, executive vice president at Greenland (America) Inc., Atlanta, moderated a discussion on the copper scrap market and its apparent disconnect with the copper futures market at the Copper Roundtable during the 2017 Institute of Scrap Recycling Industries (ISRI) Commodity Roundtable Forum in Chicago in early September. Panelists who shared their views during the session were Dave Schilberg of nonferrous scrap processor and broker Prime Materials Recovery, East Hartford, Connecticut; Bernhard Franz Uldrian of copper scrap consumer Montanwerke Brixlegg in Austria; and Joe Pickard, chief economist for ISRI, Washington.
Pickard offered a brief presentation before the Q&A period began. He said copper was the best performer in terms of pricing year to date among nonferrous metals on the London Metal Exchange (LME), with its price increasing by 25 percent to reach nearly $7,000 per metric ton as of early September. He noted that the price, however, was “not really reflective of the fundamentals,” but instead illustrated the influence of automated trading on the futures market. Pickard added that 55 percent of trading in metals is carried out by computerized algorithms.
Goodman asked those in attendance whether they cared where the LME or COMEX copper price was currently or if they just wanted to move their material, with very few in the audience indicated that they were interested in that pricing. Goodman said that disinterest stemmed from the fact that it’s “not futures but the terminal markets that matter.”
He said there was a disconnect between what scrap dealers and consumers were seeing for scrap material and futures market activity. “People have questions,” he said. “They won’t get the answers here,” Goodman added, noting that too much uncertainty still surrounding China’s policy on certain nonferrous scrap imports that would be considered Category 7 materials.
Pickard noted that mainland China accounted for 70 percent of U.S. copper and copper alloy scrap exports in 2016.
Regarding refined copper prices, Uldrian said speculators were driving pricing.
Schilberg agreed, saying, “Hedge funds are driving refined copper prices.” He noted that a significant copper shortage was being projected through 2021, though he said he felt that figure was a bit aggressive. “At $3-plus per pound, producers may add additional supply.”
Pickard said that he used to think the market would return to fundamentals in the long term. However, he added, “I’m seeing less evidence that fundamentals do drive prices.”
Regarding a potential Chinese ban on copper-bearing scrap, Uldrian said he believed that material would be diverted to other countries for processing before entering China in upgraded form. He also said North America would have to look to the European Union market to find homes for this material. “New markets will not be like the new China but like the old Europe,” Uldrian said.
However, he added that order books for refiners in Europe are “flooded with raw material.” He said his company was looking out three months to book new scrap orders.
Goodman noted that U.S. refiners were filled up through November as well.
Schilberg said that if the Chinese ban proves to be permanent, it presents an opportunity for domestic processors to invest in new processing capabilities. However, he added that there would not be homes today for the increased supply.
With Hurricane Harvey having recently affected Houston and the surrounding areas and Hurricane Irma heading toward Florida as the event took place, the topic of scrap related to these natural disasters came up. Goodman predicted that they would have a small impact on overall copper scrap supply, though their effect would be greater in the affected areas.
Schilberg said he believed the storms would lead to a short-term increase in copper scrap supply, though he was less certain the effect on copper demand would be significant.
The 2017 ISRI Commodities Roundtable Forum was Sept. 6-8 at the Marriott Chicago Downtown Magnificent Mile.]]>
He predicted a 1 percent, or 630,000-ton, global surplus of aluminum for the year, adding that China’s surplus would be larger at 2.2 to 2.4 percent.
Aluminum demand is expected to grow globally, Estel said, and China is considered to be the greatest force behind that growth. The country’s demand for aluminum is projected to grow as much as 7 percent for the year.
At 33.9 million tons, China accounts for more than 50 percent of world demand for primary aluminum, Estel said. The country accounts for two-thirds of global demand growth, which stands at 5 percent. China’s transportation and construction sectors are the largest consumers of the metal, he added.
India’s aluminum demand is projected to grow between 6 percent and 7 percent for the year, while Europe should post growth in the range of 3.5 to 4 percent, Estel said. He described Europe’s growth as being “very high” for a developed area.
North America’s growth, however, will only range from 1.5 to 2 percent, Estel said, with production of cars and light trucks being relatively flat.
Ryan Olsen, vice president of business information and statistics for The Aluminum Association, Arlington, Virginia, said there was 36.4 billion pounds of aluminum demand globally in 2016.
Olsen said the transportation sectors is the largest market for aluminum at 39 percent. Within North America, the sector is forecasted to increase its consumption of this material, according to a study from Michigan-based Ducker Worldwide, with total aluminum content expected to grow from 397 pounds per vehicle (PPV) in 2015 to 565 PPV by 2028, representing 16 percent of total vehicle weight. Olsen added that total aluminum used in North American vehicles will grow to nearly 9 billion pounds by 2028.
Mike Southwood, who works out of Pittsburgh for London-based CRU Group, said aluminum demand in North America is “reasonably positive.” He added that demand for semifabricated aluminum continues to growth, with 2 percent growth expected this year.
North America produced 11 billion pounds of aluminum in 2016, which was only 16 percent of overall production, Olsen noted. Secondary production accounted for 84 percent of overall production in the United States that year, he added, noting that only five smelters currently operate in the U.S.
Primary production of aluminum has increased globally, Olsen said, driven by China. He said China’s production “fundamentally impacted the global and U.S. aluminum industry.”
China has enacted a number of supply reforms that target the aluminum sector, Estel said. The country’s Ministry of Environmental Protection (MEP) has targeted 28 cities for reform and has required a 30 percent curtailment in aluminum smelting capacity during the winter heating season, ranging from November 2017 through March 2018. Additionally, the country’s National Development and Reform Commission (NDRC) plans to curtail production at smelters without operating licenses, Estel said, adding that the move could affect 3.9 million tons of production in that country. The two actions together could affect 6 million tons of Chinese production, or 10 percent of the global market.
“There is the potential for very meaningful reform,” he said, though Estel noted that this was far from guaranteed
In addition to aluminum production overcapacity, Olsen said overcapacity exists downstream as well. Flat roll capacity, for instance, is expected to grow by 20 million tons by 2020.
While Estel said aluminum scrap imports to China are up relative to last year, the country is exporting more semis than it is taking in scrap.
Southwood said more scrap is expected to be used in the production of semis this year. He said direct use of scrap is forecasted to grow by 4.7 percent year of over in 2017, with additional growth of 2 percent expected in 2018.
Total U.S aluminum semis demand is firm, according to Southwood, in light of increasing use in autos and building and construction. He added that rolled products demand is growing despite “recent disappointments” in the transportation and construction markets.
Aluminum can stock imports to the U.S grew 84 percent in the first half of 2017, according to Southwood’s presentation, with imports from China, which accounted for 74 percent of total can stock imports, increasing 41 percent. Southwood predicted this trend would result in less demand for UBCs (used beverage cans).
Regarding China’s proposed restrictions on scrap imports into the country, Southwood said 70 to 80 percent of the aluminum scrap exported to China from the U.S. is zorba, which falls under Category 6 scrap and not the Category 7 scrap targeted by China’s MEP.
While aluminum scrap exports to China declined in 2016, Southwood said they are up so far in 2017. However, he notes that China’s internal generation of aluminum scrap is growing, having increased 2.2 million tons since 2010.
He predicted the London Metal Exchange price for aluminum to increase in the second half of this year, propelled by the closure of smelting capacity in China.
The 2017 ISRI Commodities Roundtable Forum was Sept. 6-8 at the Marriott Chicago Downtown Magnificent Mile.]]>
The waste firm advises customers to www.wm.com/alerts for their local schedule. It also provided an infograph with a message to customers stating, “As you clean up, please remember to put your storm debris (vegetation, carpet/roof tiles, household appliances) in a separate pile curbside from your regular household garbage and recycling containers.”
Newport News, Virginia-based Liebherr USA Co. has expanded its footprint in the United States with the opening of its newest location in Lodi, California.
The company says this new location will help to better service customers in the western region. The Lodi facility operations will include sales, service and repair of new and used mobile, duty cycle and lift version crawler cranes, as well as piling and drilling rigs.
The new sales and service facility will serve as a hub to provide technical assistance, field service, yard storage for consignment cranes, stock and replenish parts, perform equipment repairs, stock inventory for sale and deploy rental fleets. The facility includes service bays, a warehouse and office building.
“This cooperation will derive further advantages to Liebherr crane customers in the western region of the United States, enhancing the level of customer service and product support, and offering a greater selection of cranes,” says the company.
The facility in Lodi is located in California’s Central Valley, about 84 miles west of San Francisco and about 36 miles south of Sacramento. In terms of logistics, this allows Liebherr to respond to customer inquiries quicker and accelerate the distribution of parts and services in this region, the company says.
“A lot of effort and dedication went into preparing this location for success. The Lodi branch will tremendously improve our abilities to service and support our local customers in their respective time zone,” says Tobias Haemmerle, divisional director of Liebherr USA Co. crawler cranes and foundation equipment division.
Established in 1949, the Liebherr Group, headquartered in Switzerland, is a leading manufacturer of earthmoving equipment and a supplier of user-oriented products and services in many other fields. The family-owned company employs more than 40,000 people in more than 130 companies worldwide in 50 countries on every continent.
“At Cox, we understand that sustainability is a collective effort,” says Cox Enterprises Vice President of Environmental Sustainability Keith Mask. “We meet our environmental goals by looking for innovative ways to engage our employees and customers and investing in programs and technologies that allow us to operate in an environmentally responsible manner. We look at every way possible to recycle and repurpose materials. We also make it easy for employees to participate.”
Across its divisions, Cox says it is engaged in scores of projects to reduce consumption and recycle or compost materials. These efforts are diverting materials from landfills, decreasing consumption of natural resources and reducing the energy and emissions associated with manufacturing new products, according to the company.
Cox says it has invested more than $1 million in recycling projects. The Atlanta Journal-Constitution, part of Cox Media Group, became the first U.S. newspaper to receive Gold-level certification from the U.S. Zero Waste Building Council in 2016. The same year, Cox launched nearly 40 new site-specific recycling and composting programs across the country.
In 2017, the company opened the doors to its Golden Isles Conservation Center, a facility that uses “an eco-friendly process to break down tires into their original components,” Cox Enterprises says. By repurposing the materials, the center has the capacity to daily remove the equivalent of 5 tons of tires from landfills and waterways.
Cox Enterprises is a leading communications, media and automotive services company. With revenues exceeding $20 billion and approximately 60,000 employees, the company’s major operating subsidiaries include Cox Communications (cable television distribution, high-speed internet access, telephone, home security and automation, commercial telecommunications and advertising solutions); Cox Automotive (automotive-related auctions, financial services, media and software solutions); and Cox Media Group (television and radio stations, digital media, newspapers and advertising sales rep firms). The company’s major national brands include Autotrader, Kelley Blue Book and Manheim. Through Cox Automotive, the company’s international operations stretch across Asia, Australia, Europe and Latin America.
Launched in 2007 by Chairman Jim Kennedy, Cox Conserves is Cox Enterprises’ national sustainability program. Cox Conserves focuses on reducing waste and energy consumption, as well as conserving water. The program engages each of the company’s major subsidiaries.
The company says its sustainability goals are to send zero waste to landfill by 2024 and become carbon and water neutral by 2044. The company also presents the Cox Conserves Sustainability Survey, a nationwide survey that examines sustainability opportunities and challenges for small and medium-sized businesses.
Regain will become part of Imerys’ performance additives division. It will be combined with Imerys' existing waste polyolefin compatibilization business. Imerys says its laboratory, technical facilities and mineral portfolio will help widen the market offer, adding value to customers' businesses and allowing for future developments.
This acquisition provides the basis for Imerys’ future investment in higher value applications for recycled polymers across the construction, packaging, automotive, horticulture and industrial sectors.
A group of panelists who have experience in financing waste conversion projects through various means will share their experiences. Government grants, bonds and other funding sources can be made available if developers know where to look. The 90-minute panel, titled Financing Strategies for Waste Conversion includes speakers with a wealth of varied experience with financing biogas and other projects where conversion technologies are being deployed.
Mark Reidy, Kilpatrick Townsend, Washington, who has more than 35 years of practice U.S. and international project development and finance and private placement representation of renewable and conventional energy, clean technology, environmental and infrastructure clients;
Joe Regneri, chief commercial officer for New Phase Energy, Denver, who has more than 30 years of experience providing finance, business development, legal and regulatory guidance to the traditional and renewable energy sectors; and
Jeffrey Weisz, senior managing director, New Caanan Capital Management (NCCM), Naples, Florida. NCCM through the Green Energy Opportunity Fund, LP. (GEOF) is an investment company specializing in underwriting and structuring projects with a combination of equity and debt, that help midsize and large developers compete for renewable energy projects.
The session will be moderated by Kristin Smith-Ely, Editor of Waste Today.
To learn more about this and other sessions taking place at the REW Conference, visit www.REWConference.com.]]>
“To make it easier to find information by hazard or topic, we have listed those related to worker safety and health hazards and protective measures below with a link to their location on the OSHA/ISRI Alliance website,” ISRI says.
These measures include:
- Flood Clean-up Fact Sheet
- Clean-up Hazards
- Fungi Hazards and Flood Clean-up Fact Sheet
- General Decontamination Fact Sheet
- Disaster Cleanup and Recovery PPE Matrix
- Working Safely Around Downed Electrical Wires
- Portable Generator Safety
- Protecting Yourself While Removing Post-Disaster Debris from Your Home or Business
- Worker and Employer Guide to Mold Hazards and Recommended Controls
- Mold Fact Sheet
ISRI encourages members with questions to contact ISRI's Vice President of Safety Terry Cirone by email at email@example.com.]]>
Designed as a “do-it-yourself system,” RIOS says the RIG is a series of documents, tools and templates intended to help recyclers effectively implement a RIOS system.
“The RIOS Management System is now easier than ever to implement in your facility. Following the overhaul of the RIOS Standard in November 2016, the RIOS Technical Advisory Group spearheaded the development of an Implementation Guide that is more robust and more universally approachable by facility staff than the previous version,” says RIOS.
The new RIG is designed to be accessible to employees who are not compliance experts, but have a role managing environmental issues, employee health and safety, and quality control, says RIOS.
“Now, more than ever, a QEHS (quality, environmental, health and safety) management system is accessible to recycling facilities of all sizes, regardless of commodity or process,” RIOS says.
The RIG is available to all current RIOS members. Contact RIOS Program Assistant Michelle Woody by phone at 202-662-8553 for more information.
RIOS, which was developed by the Washington-based Institute of Scrap Recycling Industries (ISRI), is an integrated QEHS management system certification that is designed for recyclers by recyclers. By integrating the management system, recyclers can more effectively manage their systems, which results in stronger health and safety programs, greater environmental responsibility and better operational efficiency, ISRI says.]]>
Recycling Technologies will be at the RWM Exhibition in Birmingham, England, Sept. 12-14, and says it “is keen to meet with waste management partners and suppliers to start discussions about new site acquisitions in 2018 and beyond.”
The company says it has operated successfully at the Swindon material recovery facility (MRF) based in Cheney Manor in England using its chemical technology to recycle residual plastic scrap into a low sulphur hydrocarbon product called Plaxx. Plaxx can be used as a feedstock for new polymer and wax manufacturing, replacing fossil-fuel-derived raw materials and propelling plastics into the circular economy.
Recycling Technologies says it is preparing for further trials at the end of 2017 to ramp up to continuous, 24/7 operations. This new chemical recycling technology offers an alternative to landfill and energy from waste (EfW) incineration for residual plastic waste and boosts the recycling rate for mixed plastics from 30 percent achieved with existing mechanical treatment to 90 percent with these technologies combined, according to the company.
Recycling Technologies says it is looking to partner with more waste management operators and local councils with a view to increase the number of sites from which it can operate. The machine Recycling Technologies has created takes the solution for plastic scrap to the source of the problem, usually a MRF or plastics recycling facility (PRF), rather than the problem to the solution, the company explains. The technology is housed in a chemical recycling unit called the RT7000, capable of treating 7000 tons of mixed plastics per annum from household and commercial and industrial (C&I) streams.
By combining mechanical and chemical recycling and working them in synergies, Recycling Technologies says, “virtually all plastics from households, offices and shops can be recycled.”
“Even materials that previously have been regarded as unrecyclable, including black trays, laminated food pouches, films and contaminated food packaging can be processed,” the company says.
“With Recycling Technologies as part of the processing infrastructure, there is potential for local councils to consider simplifying the collection of plastic waste from households and commercial sites into a single all plastics bin,” the company continues.
Bernie Brannan, corporate director, Swindon Borough Council, says, “It is evident that this technology should have financial, environmental and economic benefits, not only for Swindon but further afield as well.”
On the back of its activity in Swindon’s Cheney Manor MRF, Recycling Technologies says it is establishing recycling facilities in Scotland in as early as 2018 to support delivery of the Scottish government’s circular economy strategy. The RT7000 will be located in Binn Farm, Perthshire, run by leading independent recycling and waste services company Binn Group, Scotland.
David Sanderson, group finance director of Binn Group, says, “This innovative chemical recycling technology solution manages plastics waste streams from diverse sectors enabling us to improve services, reduce costs and meet environmental commitments. Partnering with Recycling Technologies gives Binn Group a distinct advantage in the Scottish plastic waste market.”
Adrian Griffiths, CEO at Recycling Technologies, adds, “2017 has been a fantastic year for Recycling Technologies. We have a viable solution to make the circular economy a reality and taking end-of-life plastic and turning it into more plastic is a great way to do this. As a team, we’ve come a long way in a short period of time and I am very excited for what the future holds in Swindon, Scotland, and as we expand in the U.K. and internationally. The investment we are getting shows that there is a lot of support and belief in what we are achieving. This is a great moment for talented people to join the company.”]]>
An online article by the Montevideo, Uruguay-based El Observador says in that city alone, about 1,200 tons of municipal solid waste is generated each day. The newspaper also says the percentage of that material currently diverted and sorted for recycling “is minimal.”
The new Donde Reciclijo UY app is described as providing “access to a geolocalized map where the user can see the different types of [collection containers and what can be deposited in each one.” The app covers the entire nation and allows users to search by the type of material they want to recycle.
CEMPRE Executive Director Federico Baráibar is quoted as saying that although there are thousands of containers devoted to recycling in Uruguay, they are underutilized and often material collected “arrives mixed, and the plants destined to process them work four times below their potential.”
Among the materials for which collection bins or centers have been mapped are plastic, paper, metal and glass packaging, cartons, batteries, clothing and motor oil.
Materials the app considers undesirable in collection containers include toilet paper, diapers and damp cloths, hand and sanitary towels, ceramics, bones and cigarette butts.]]>
An online article by Barranquilla-based El Heraldo says two pro-business groups—ProBarranquilla and the Chamber of Commerce of Barranquilla—have “expressed their interest that the construction project of a steel mill in the district of Juan Mina can continue” and that “alternative solutions [can be] found for the inconveniences that have arisen.”
A joint statement by the two groups says the both the mayor of Barranquilla and the government of the state of Atlántico join them in saying “the problems presented can be solved in the shortest possible time.” The statement adds, “With the construction of this plant the city wins, the [state of Atlántico] wins and the company wins.”
Among the infrastructure spending that may need to take place are+ adding electrical towers and lines and widening a road.]]>
Harsco's Metals & Minerals division will soon begin providing new services for scrap handling and processing at the Ternium Siderar basic oxygen furnace (BOF) mill in San Nicolas, Argentina. Billed as the largest steelmaking plant in Argentina, with capacity of nearly 2.5 million tons per year, Ternium Siderar makes steel products for the construction, energy, automotive and other markets. Harsco's services, awarded under a new five-year contract, are scheduled to begin in January 2018, replacing a local provider in favor of outsourcing to Harsco.
Harsco also will extend its services under a seven-year contract renewal at the DeAcero electric arc furnace (EAF) mill in Celaya, Mexico, continuing a 12-year relationship at that location. Harsco describes Deacero as Mexico’s largest long products producer, and its Celaya mill serves the construction sector in Latin America with rebar and wire rod products. Harsco's services at Celaya include molten slag transport and metal recovery, whereby metal content is captured from steelmaking slag for reuse in the production of new steel.
“Both of these contracts are with well-positioned, substantial customers at the leading edge of their markets,” says Chris Whistler, chief operating officer of Harsco Metals & Minerals. “They ably reflect our continuing strategies and objectives for growth in this region, and for our Harsco business overall.”
Harsco’s Metals & Minerals division has operations that span approximately 140 customer sites in more than 30 countries. Harsco Corporation provides onsite services and engineered products to the global steel, energy and railway sectors.]]>
An online article by El Universal says the Caracas-based Institutional Assets and Monuments of Venezuela (IAM Venezuela) has reported on “the proliferation of thefts of bronze and copper sculptures and monuments, mainly in the border states” of Venezuela.
The organization says many of the missing plaques, sculptures and parts are being sold for scrap in neighboring Colombia, as a means to earn currency other than the declining Venezuelan bolivar.
According to El Universal, among the thefts documented by the organization in recent months are the disappearance of the sculpture of Tulio Febres Cordero and an arm of the sculpture of author Gabriel García Márquez from a garden dedicated to literary greats in the Venezuelan city of Mérida. Other statues have gone missing in the cities of Coro, Valencia and Maracaibo.
IAM Venezuela says the criminal practice has gained momentum as a result of the continuous devaluation of the bolivar.
The president of another not-for-profit arts organization in Venezuela is quoted as saying, “We urge citizens not to be silent about the smuggling of bronze, and the vandalism that affects Venezuela's historic heritage.”]]>
Nextuse says it has attained “this gold standard of security in the data destruction industry” after more than a year and a half of developing, testing and improving processes as well as hardware and software solutions.
“I’m very proud of our team for their hard work and dedication that has allowed us to achieve the NAID AAA certification,” says Jeff Londres, CEO of Nextuse. “This will be a great benefit to our customers as we increase our footprint in the corporate data center.”
The company adds, “There are only three companies in the entire world who hold all six NAID AAA certifications in onsite and plant-based computer hard drive sanitization, degaussing operations and physical hard drive destruction. As of Aug. 23, 2017, Nextuse LLC … is now one of them.”
NAID AAA certified companies adhere to all local, state and federal data regulations. This means an emphasis on ultra-secure data and consumer records destruction processes in order to fully protect such information, Nextuse says. All NAID AAA certified companies also participate in an unannounced audit program, which means certified companies, in addition to scheduled, annual audits, will receive unexpected audits, sometimes days after a prior audit to ensure companies are continuing to adhere to the highest of standards.
NAID AAA Certification is a way to help ensure businesses and corporations of all sizes are able to responsibly destroy data and maintain their compliance with all government regulations by partnering with a secure, certified company, Nextuse explains.
The new board members are Tim Benter, vice president, engineering and environmental compliance at Republic Services, Phoenix; John Casella, chairman and CEO at Casella Waste Systems, Rutland, Vermont; and Mike de Castro, executive vice president, supply chain at Covanta, Morristown, New Jersey.
EREF says its board of directors consists of executives representing all aspects of the waste industry, including haulers, facility owners, consulting firms and waste equipment manufacturers. The appointment of the new board members aligns with the five-year expanded strategic direction set forth by the board in 2016 to position EREF as a leading source of waste industry funding, education and research, the foundation says.
Since 2016, Benter has worked with Republic Services as vice president of engineering and environmental compliance, a role in which he manages corporate and field engineering and environmental compliance strategy, planning and execution. Previously, he served 18 years within Republic Services’ legal department, most recently as vice president and deputy general counsel. Benter has been a member of the Phoenix Suns Charities’ board of directors since 2012. He holds a Bachelor of Science in finance from the University of Maryland, a Juris Doctor from Nova Southeastern University and is pursuing a Master of Business Administration from Arizona State University.
“With increased public and corporate focus on environmental initiatives, including clean energy and waste reduction, EREF’s research and funded projects are and will continue to be critically important in thoughtfully shaping industry policy and operations,” Benter says. “I’m pleased to serve on EREF’s board with members who are as passionate about the foundation and advancing the industry as I am.”
Casella has served as Casella Waste System’s chairman of the board of directors since July 2001 and as CEO since 1993. Additionally, he served as the company’s president from 1993 to July 2001 and as chairman of the board of directors from 1993 to December 1999. He received an Associate of Science in business management from Bryant & Stratton College and a Bachelor of Science in business education from Castleton State College.
Casella says, “Our industry has an important role to play in helping to develop a sustainable approach to how we use, and renew, the world’s limited resources. It has been my personal mission for over 40 years, and now I’m excited to be a part of this industrywide effort as part of EREF’s board.”
De Castro began working for Covanta in 2015 as executive vice president, supply chain. Throughout his 33-year career in the waste industry, he has served in various roles, including CEO of Interstate Waste Services, director of global operations Americas for Air Products and Chemicals Inc. and vice president of Operations for American Ref-Fuel Co. De Castro received a Bachelor of Science in mechanical engineering from the University of Alabama in 1984 and his Master of Business Administration from Boston University in 2002.
“Through its commitment to education, innovation and research, EREF is paving the way for a new generation of leaders and forward-thinkers to guide the waste industry towards a more sustainable future,” says de Castro. “I’m honored to support EREF’s mission as a member of the foundation’s board.”
Third quarter 2017 earnings before interest, tax, depreciation and amortization (EBITDA) was $160 million, versus EBITDA of $96 million in the same period one year earlier. The third quarter of 2017 included $34 million in adjustments, including a $31 million charge for a legacy engine litigation matter, $6 million of pre-existing warranty charges, and $3 million net benefit in asset impairments and restructuring costs. Excluding these items, adjusted EBITDA was $194 million in the third quarter of 2017, compared with $132 million in the same period one year ago, according to the company.
Revenues in the quarter were $2.2 billion, up 6 percent from the same period one year ago, primarily due to an increase in truck segment volumes, Navistar says.
“We returned to profitability this quarter thanks to strong operational performance across the board, highlighted by a 15 percent increase in chargeouts and solid market share gains amid flat industry conditions and strengthening margins,” says Troy A. Clarke, Navistar chairman, president and chief executive officer. “We also moved ahead with new products and solutions that position us well for ongoing growth, while continuing to restructure our business to improve our future competitiveness.”
Navistar ended third quarter 2017 with $973 million in consolidated cash, cash equivalents and marketable securities. Manufacturing cash, cash equivalents and marketable securities were $923 million at the end of the quarter.
The company says it had a number of commercial and product highlights during its third quarter, starting with the first customer shipments of the LT Series and RH Series on-highway products with the company’s new A26 12.4-liter engine. Internal testing shows that with this new engine, these vehicles are delivering up to 9 percent in fuel economy improvement over the comparable models built a year ago.
In the school bus segment, Navistar moved forward with multiple improvements and innovations that set up future share gains. These include the company’s propane model and introduction of the Cummins L9 product in the RE Series bus. IC Bus’s gasoline-powered school bus will arrive in 2018. The company also announced a strategic relationship with Edulog, a leading provider of student transportation planning and scheduling software solutions. Through integration with Navistar’s OnCommand Connection telematics system, the resulting new solutions will deliver a combination of uptime and on-time to the school bus market.
During the third quarter the company announced that OnCommand Connection now provides an all-makes telematics offering. The telematics hardware attaches to the onboard diagnostics port and makes most truck models a part of the OnCommand Connection services network. The company has shipped several thousand of these units and they can be purchased at International dealers, through HDA Truck Pride or TA Petro service centers. This telematics solution is integrated with the company’s Advanced Remote Diagnostics and its new Electronic Driver Log, which addresses the federal Hours of Service mandate that takes effect December 2017.
The company says its alliance with Volkswagen Truck & Bus is moving forward as planned. The two companies are finding significant opportunities to leverage their combined scale through their procurement joint venture, while also pursuing technology collaboration on a number of fronts.
The company reiterated its 2017 guidance:
- Retail deliveries of Class 6-8 trucks and buses in the United States and Canada are forecast to be in the range of 305,000 units to 335,000 units for fiscal year 2017.
- Full-year 2017 revenues are expected to be similar to 2016.
- Full-year 2017 adjusted EBITDA is expected to be higher than 2016.
- Fiscal year end 2017 manufacturing cash is expected to be about $1 billion.
“Looking ahead, I like our position as we enter the prime selling season,” Clarke says. “I feel good about the fourth quarter and look forward to finishing the year on a strong note.”
Truck segment — Truck segment net sales increased 10 percent to $1.5 billion compared to third quarter 2016, due to higher volumes in core markets (Class 6-8 trucks and buses in the United States and Canada), an increase in Mexico truck volumes, and the production ramp up of GM-branded units manufactured at Navistar’s Springfield, Ohio, plant. Chargeouts in the company’s core markets increased by 15 percent during the third quarter.
In the third quarter of 2017, truck segment results improved by $61 million year-over-year, Navistar says. The improvement was primarily driven by the impact of higher volumes in core markets and Mexico, lower used truck losses and lower restructuring charges, partially offset by lower other income.
Parts segment — Parts segment net sales declined $11 million compared with third quarter 2016 due to lower Blue Diamond Parts (BDP) sales and lower North America volumes, partially offset by higher Fleetrite all-makes brand and ReNEWed remanufactured parts sales in the U.S. and Canada.
For the third quarter 2017, the parts segment recorded a profit of $157 million, up 3 percent compared with third quarter 2016, primarily due to income related to the sale of a business line and lower intercompany access fees, which were partially offset by margin declines in BDP and our U.S. market.
Global operations segment — Global operations net sales were flat compared to the prior year. For the third quarter 2017, the global operations segment profit improved by $8 million, primarily due to lower manufacturing and SG&A costs, as a result of our prior year restructuring and cost reduction efforts, and income related to the sale of machinery and equipment.
Financial services segment — Financial services net revenues increased by $2 million to $62 million compared to third quarter 2016, primarily due to higher interest rates in our Mexican portfolio. For the third quarter 2017, the financial services segment recorded a profit of $23 million, down $3 million compared to third quarter 2016. The decline was primarily driven by a lower interest margin resulting from an increase in its average borrowing rate as well as the pay down of certain intercompany loan receivables, partially offset by a decrease in the provision for loan losses in Mexico.]]>
Such trading tools are widely used by people and companies in the nonferrous scrap sector, but historically they have been repeatedly met with underwhelming responses from the ferrous scrap and electric arc furnace steelmaking industries.
In the interview below, Recycling Today asks veteran scrap trader Nathan Fruchter how and whether some of the latest trading products introduced by exchanges can make a bigger impact on the ferrous market.
Q. How did we arrive at the current pricing system?
A. Ferrous scrap has always been a physically traded commodity. The last price of the day concluded was THE market price. If demand was good and supply tight, sellers would look for a higher price, say $5 up, settling for $1-$3 up. If demand was weak and inventories high, buyers would look for a lower price, $5 down, settling for $1-$3 down. And that's how prices moved up or down, which is what we mean when we say it’s a seller’s market or a buyer’s market. But this is THE market at the end of the day. It’s made by guys like us, the physical buyer or seller.
Q. As a ferrous scrap trader, what are some of the differences you see between LME nonferrous metals and LME ferrous scrap?
A. LOL . . . that’s like comparing apples and oranges. It’s two different worlds. Let’s start with the traditional, always been there, nonferrous sector:
- the chart usually moves up and down many times throughout the day; even when it takes on a clear direction going up or down, it still moves up and down on that path;
- all physical sales contracts are linked to the LME (London Metal Exchange) price and depend on it;
- producers, end users and traders have always had the option to protect themselves from moving markets, or just from having taken a bad position; and
- futures traders have had a chance to make money or lose money by watching the price move all day and trading strictly paper positions (and thus run it as a profit center).
For ferrous, it’s a totally different environment:
- the chart moves in one direction for a few weeks (two to three weeks or even five to six weeks);
- no physical sale is dependent on any LME price; quite to the contrary, it is the LME price that is dependent on the physical price;
- processors, steel mills and traders have never had any option to protect themselves from sudden moving markets, or from just from having taken a bad position. I cannot tell you how many times in my career I have said to myself when I took a wrong position, “Oh damn, I wish I had an LME that allowed me to take a position to counteract my bad trade.” And frankly, the metal recycler who is sitting on inventory that he cannot sell as fast as he wishes in a falling market can have the same regret, and so can a steel mill, sitting on unsold rebar; and
- the concept of futures trading is just not in our DNA.
Q. Do you see this changing any time soon?
A. I think so. The LME finally gave us the tools we need to protect ourselves. And while there’s room to fix a few things and improve on the mechanics of ferrous scrap futures trades, I give the LME a lot of credit for having gone this far (although there’s still a lot of room for improvement). It’s now up to us recyclers, producers and traders to use these tools smartly by actually trading on the LME or another exchange.
Q. People seem reluctant to join the bandwagon. Why do you think that is?
A. For nonferrous metals, the LME was always a fixture in every trader, producer and consumer’s daily life. It’s in their DNA. But for the ferrous guys, it simply was never a thing. People in the physical trade are also very set and comfortable in their old-fashioned ways and don’t take so quickly to changes. That I believe is the main reason why it’s not gaining the traction it needs, to become a permanent fixture in our industry.
While I give the LME a lot of credit, I do have a few gentle words of criticism for them, as I feel they are going about it the wrong way. The LME realizes people are very slow, many even reluctant in joining the bandwagon, so they are using careful words like “it’s not for trading a paper book,” “no playing casino,” or “it’s to protect yourself,” and similar lines I have heard from them in recent months. These are all designed to put a careful conservative spin on it, thinking the safe environment they preach will encourage people to jump on board. But the smart marketing consultants who misguided them did not realize that by saying this, they are not encouraging paper traders who want to buy and sell all day to get involved. But it’s exactly those traders who will breathe life into this market and give it the wings it needs to soar, like with nonferrous metals. You need those paper traders. Draw them in, don’t push ‘em away.
Q. So what can the LME do to change that?
A. While the LME tries to figure out how to make some mechanical changes to its process, and I see several areas in need of change, I really think the next step lies with the financial institutions and clearing houses, to sign up as many steel mills, metal recyclers and traders as they can.
Q. How do you suggest they do that?
A. The experienced physical trader can reel in the recycler and steel mill. For it is that person who has the close personal relationship with the recycler and steel mill that they have worked with closely for many years. There’s a long trust that’s been established there over the years. His word is his bond, or he would not have developed those close personal relationships with these people in the first instance. I have said this before, “The ferrous scrap business is a people business.” The guys in the financial institutions are smart and very good at what they do, but they do not have that close personal relationship that physical traders have built for three or four decades with steel mills and recyclers. It may be time for Wall Street or Canary Wharf to consider adding some physical trader experts to their teams. It is an asset that may serve them well going forward as they try to build up this part of our industry.
Q. Some say that Asian participation is not happening because the price quoted is C&F (cost and freight) Turkey. Is that accurate?
A. That is a misconception by some. You could quote a C&F Timbuktu price, it does not change the mechanics of what the LME offers us. For example, take an Asian steel mill that does an LME trade in order to offset a loss on one of its cargoes that is still on the water. Once the mill closes out that position, the profit it makes on this trade compliments the loss from its original loss-making cargo. The same result would be achieved if a C&F Taiwan price would have been used.
Personally, I think we need an HMS (heavy melting steel) 80/20 price Kaohsiung, Taiwan, for containers. This and the Turkish HMS 80/20 price for bulk, form the backbone of our export business pricing. (Readers can see Fruchter’s prior RTGE contribution for background on how this MPI [market price indicator] has evolved over the years.)
Q. Speaking of a C&F Taiwan price, isn’t there much to be said about using that price instead of the Turkish price?
A. Everyone in the scrap business follows the Turkish price carefully—most practically have their ears pinned to the ground in Turkey. Thus, we know very well that the Turkish buyers go through these extended dry periods where they don’t buy any cargoes for a 2-to-3-week period, hoping sellers will become desperate and drop their prices. Last year, they were audacious enough to stay out of the market for six weeks. That’s where the LME ran into a little problem quoting a price. Because no cargoes were sold, the LME still showed the last price concluded as the market price, when in reality buyers and traders knew very well that the market was already $30-to-$40-per-ton lower. Therefore, the Turkish price may not necessarily be the correct market indicator.
The LME should be listening to people like Bill Schmiedel of Sims Metal Management, who in my opinion is one of the very few old timers left in this industry and the best opinion out there today. Bill has suggested that the LME use a CFR CY Taiwan container price, which is a more transparent market and does not go through these lengthy dry periods like the Turkish market. Or use Taiwan as a base price and draw some correlation to the Turkish price and calculate a price differential. If the Turkish buyers go quiet for a week, you still have a market reflective price you can quote on your exchange by applying that differential.
Also, there are some lessons to be learned here from the past. Just look at aluminum, and you can see what needs to happen in steel. The LME went through the same gyrations back in the 1980s trying to get aluminum alloy trading off the ground but could not. That is until Alcoa bought in. At that point, they started to buy their material based on a percentage of the LME close. I think ferrous scrap could gain traction the same way. Until you get the consumers to start to use the LME as a price discovery dynamic, this project risks struggling to get off the ground. This is where the physical traders, who have the relationships with the steel mills, can assist the futures traders.
Q. Your name has come up a lot recently in connection to the LME. You spoke about it briefly in your presentations at Platts steel conference in Chicago and at the BIR Conference in Hong Kong. Are we seeing you transitioning from physical to futures trader?
A. In life and in business, you need to be open-minded and willing to make changes. You cannot remain set in your ways. I have spent 34 years trading physical scrap all over the world, gone where other physical traders dared not go, seen the good, the bad and the ugly. You name it, I’ve done it. I now see an opportunity in LME trading. Like I said earlier in this interview, the futures trading of ferrous scrap depends a lot on the physical trade. I have a lot of experience and knowledge in physical trading and plan to put it to good use.
Nathan Fruchter is the founder of Idoru Trading Corp., an independent ferrous scrap metal trading company that has expanded to include other recycled products. He started his career at Marc Rich & Co. in New York in 1984, He was later sent to London to build Glencore’s European ferrous scrap operations, developing trans-shipment terminals for the group in Rotterdam and Amsterdam in the Netherlands, Antwerp, Belgium, and Gdansk, Poland. He also is the principal of Global Recycling Consult. a New York-based consulting firm assisting companies seeking help and services in the ferrous scrap and related sectors. Fruchter can be contacted at firstname.lastname@example.org.]]>
The WTE facility receives around 550,000 to 560,000 tons of residential and commercial garbage per year and produces 59.7 megawatts (MW) of electricity per hour. Fifteen percent of the electricity used to power the campus, while the rest is sold on the open market.
Attendees will have the opportunity to see how the WTE facility and recycling facilities work together as a community resource to create revenue, reduce the community’s carbon footprint and greatly reduce material going to landfill.
The tour is Oct. 5 from 8:30 a.m. to 1:30 p.m. and is sponsored by Covanta, Morristown, New Jersey. Visit www.REWConference.com to learn more about the event.]]>
Javelin Manufacturing specializes in eddy current separators and engineered systems found in the scrap, recycling, waste, mining and other related industries.
Dennis O’Leary, IMI’s chief business development officer, says, “The acquisition of Javelin marks IMI’s next step in expanding our metal separation offerings. Javelin’s footprint, reputation and well-established relationships provide a unique opportunity for us to grow the Javelin brand, as well as IMI’s current ferrous separation product line. We will certainly flank the Javelin brand with additional sorting technology via future acquisitions.”
Jim Merrick, owner of Javelin, says, “This acquisition allows Javelin to take that next step to become more proactive in providing a larger and more diverse product offering to the scrap, e-scrap and postconsumer recycling markets. It is going to be a very exciting time for us.”
Javelin’s staff will remain intact, with the Fort Wayne location continuing to operate as the primary engineering and design center for the brand. Capital investments to bolster the current testing platform, modernize assembly capabilities and create a toll processing cell are slated for later 2017, says IMI.
In October 2016 Javelin announced it had moved to a new, larger facility to allow it to provide recyclers with a wider range of equipment. The company was first acquired in January 2013 by Jason Miller and Scott Moore. Merrick stayed with the company through that acquisition as well.