Page 23 from: November 2016

23November 2016

B I R A M S T E R D A M

Falling commodity prices, reduced scrap availability, uneven manufacturing growth,
high regulatory costs and reduced overseas
demand are among the many challenging fac-
tors that have precipitated a restructuring of
the scrap industry in the USA, argued Mark
Lewon, president of Utah Metal Works and
chair of the US Institute of Scrap Recycling
Industries.

After three difficult trading years in a row,
Lewon told the BIR non-ferrous metals divi-
sion meeting in Amsterdam that the industry
is unlikely to revert to its previous form. ‘But
we can reinvent ourselves,’ he insisted to del-
egates, because ‘recyclers are resilient’. He urged
companies in the sector to focus increasingly
on safety, operational efficiency and product
diversification. Making a quality product is also
vital – particularly when market conditions are
tough, he added.
Lewon also insisted to delegates that free trade
in recyclables ‘is absolutely a necessity for our
industry’.

‘Swing capacities’
While China is still driving global commodity
markets, Lewon pointed to ‘a real narrowing’ of
the types of scrap in which the country’s buy-
ers are interested. Aluminium specialist Holger
Ellmann, founding partner of Argentum Metal
Management in Germany, also focused on
China in his guest presentation, arguing that
its producers have been exercising greater disci-
pline over recent times, particularly when prices
collapsed in late 2015 and the early part of 2016.
‘Swing capacities’ were quickly brought into play
to create ‘a more balanced market situation’.
At the same time, idled capacities – ‘mainly in
China’ – will ensure ‘a natural limit on the poten-
tial of more significant price rallies’, according
to Ellmann’s presentation. And while official
global aluminium stocks have been significant-
ly reduced, there is still uncertainty as to the
whereabouts of what he described as ‘invisible’
off-warrant inventories.

The speaker went on to argue that current LME
prices and reduced premium levels will continue
to put high-cost aluminium smelter operations
in the USA and Europe ‘at high risk’. At least half
of the Chinese smelting industry is using latest
technology whereas a relative lack of modernisa-
tion in Europe and the USA has resulted in lower
overall efficiency levels, Ellmann maintained.

Opening up market
In other developments relating to China, Alex-
andra Weibel-Natan of Manco in France high-
lighted the Chinese government’s apparent
desire to open up the pre-shipment inspection
market to competition in a move which should
reduce costs and therefore bring ‘benefits for
raw material suppliers’. She also alluded to
increased interest among Chinese investors in

European companies, as evidenced by Chiho
Tiande’s acquisition of Scholz Recycling and the
partnership between Alba Group and Techcent.
On this theme, divisional board member Murat
Bayram of European Metal Recycling stated in
the latest BIR World Mirror: ‘For many years,
it has been suggested that China could become
a net exporter of scrap – and if this were to hap-
pen, investments in Western scrap or smelting
companies could be a wise move during a peri-
od in which purchases, joint ventures and alli-
ances can be agreed more cheaply than would
have been the case during the boom times of
the previous decade.’ Weibel-Natan’s review of
global non-ferrous markets also mentioned the
‘challenging’ conditions confronting recyclers
around the world and to the re-emergence of
payment delays as a significant issue.

By Ian Martin

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Non-Ferrous

E-scrap: harmonisation headache in Canada
The current ‘hodge-podge’ of extended producer
responsibility (EPR) programmes in Canada has
done little to help recycling rates and has made
harmonisation difficult, lamented Tracy Shaw,
president and ceo of the Canadian Association of
Recycling Industries, in addressing BIR’s e-scrap
committee in Amsterdam.
The guest speaker called on the gov-
ernment to ‘lead by example’ and on
manufacturers to design products so
as to minimise environmental impact
while also maximising material recov-
ery. She also highlighted the logistical
difficulties associated with collecting
end-of-life electronics in some parts of
Canada, and particularly in its remote
northern communities.

In the USA, she added, 34 states have EPR-type
laws while e-recycling laws have been introduced
in 25 states. Shaw’s presentation also alluded to ‘a
noticeable trend driven by CRTs towards loosening
or repealing EPR’. According to Surendra Patawari
Borad of Belgium-based Gemini Corporation NV,
the Indian government has framed detailed guide-

lines covering the systematic collec-
tion and transportation of e-waste
by producers; they are charged with
collecting 30% of the e-waste by
2018 and the remaining 70% in
the ensuing five years. ‘A value chain
must be created so that they can take
e-waste back from the chain through
which they have sold,’ he explained
to delegates in Amsterdam.Mark Lewon: ‘Recyclers

are resilient.’
Tracy Shaw.Holger Ellmann: aluminium

smelters at high risk.

Lewon: scrap
industry unlikely
to return to
where it was