Although demand and pricing softened for most recovered paper grades in December, paper packers and traders anticipate recovered paper markets will remain robust in the first quarter of 2022.

Looking back at 2021, recovered paper demand stayed robust for much of the year. Containerboard mills ran strong, driven largely by e-commerce demand.

A material recovery facility (MRF) operator based in the Midwest says mills seemed to have an “insatiable appetite” for recovered paper in August and September. At that point, generation was lower, while demand remained particularly strong for old corrugated containers (OCC) and mixed paper.

“[Mills] had called and asked for more material, and we had to turn people away,” he says of those months. “Our phones were off the hook.”

But in the last two months of 2021, the MRF operator says demand from mills had softened. He notes he is still moving OCC and mixed paper bales to mills as of early December but that they aren’t requesting additional tons as they had in late summer.

“What we’re hearing is now mills are full and phones are not ringing for additional loads,” he says.

As a result of softer demand, domestic prices for most recovered paper grades have dipped in the December buying period.

Recyclers and mill buyers alike say the softer demand is seasonal in part. With the Thanksgiving and Christmas holidays at the end of the year, generation of OCC is higher than in the summer.

A broker based on the East Coast says even retail generation has been much better in the fall than it was earlier in the year.

A buyer for a large mill group adds that domestic supply has increased partly because of challenges with export. As of December, securing container space was still problematic for recyclers and traders hoping to ship recovered paper overseas. The mill buyer says, “It’s leaving more material in the domestic market.”

Despite shipping issues this year, U.S. recyclers and traders managed to export more recovered paper in than they had in 2020. During the 10th Asian Recycled Fiber and Containerboard Conference hosted in early December in Wuhan, China, by Boston-based Fastmarkets RISI, Brett Biggers, senior economist with the Washington-based Institute of Scrap Recycling Industries reported that scrap paper exports from the United States increased by 14 percent in the first nine months of 2021 compared with the same time frame in 2020.

India serves as the largest volume buyer of recovered paper exported from the U.S. That nation is importing more fiber not only to feed its own paper and board mills but also to produce rolled recycled-content pulp that is being exported to China.

Mexico and Canada also were among the 10 largest buyers of recovered paper buyers from the U.S. in the first three quarters of 2021, and seven other Asian countries join India on that list. Buyers in Thailand and Vietnam purchased more than 1.3 million metric tons of paper scrap in the first three quarters of 2021. Even though recyclers and traders face delays exporting, demand for recovered paper from overseas mills remains strong.

“Export demand is there, but the ability to ship and get containers is difficult,” a broker in the Midwest explains. “It’s slowing the outflow of paper. It’s not like demand isn’t there if you got a container.”

Demand also remains strong for sorted office paper (SOP) and printing grades, yet supplies are lower. A recycler based in the South says many printers are short on paper, which has led to less printing scrap generation this past month. As a result, prices have continued to increase for SOP and other tissue grades.

The broker based on the East Coast says office scrap generation also had been soft throughout 2021.

“It’s been interesting to see office waste generation has still not come back. That is just not good,” he says. “I can tell you that every domestic mill and export mill is looking for office waste and coated bookstock to make toilet paper. It will be like that for a while.”

While most recovered paper grades took a slight hit in price to end 2021, recyclers and mill buyers alike think prices could inch upward again in the first quarter of next year.

“New capacity is coming online in 2022 and prices might come up a little bit,” the recycler in the South says.

NORPAC, Celadon, Sonoco, Graphic Packaging International, Atlantic Packaging and Cascades all have plans to add capacity to consume recovered paper this year.

Although contacts are optimistic about this new year, another factor that is still to be determined as of early December is whether the COVID-19 omicron variant will adversely impact scrap paper markets.

“I hope it’s not a big deal and that people don’t start staying at home again,” the broker on the East Coast says. “But you just don’t know what is going to happen.”

Report from the World Economic Forum urges increased collection, upgrading of aluminum scrap.

The Switzerland-based World Economic Forum (WEF) has published an online article praising the energy savings and emissions reductions aspects of recycling aluminum. The article’s authors also urge greater global efforts to collect used beverage cans (UBCs) and to upgrade automotive scrap.

The headline of the article states that “aluminum’s infinite recyclability” is “the answer to the aluminum industry’s emissions issue.”

The four co-authors, two of whom work for the WEF, and the other two for global consultancy Accenture, write, “Over 90 percent of current aluminum emissions are associated with primary production. But secondary, or recycled, aluminum uses just 5 percent of the energy required for primary production.”

To take full advantage of those sustainable aspects, the authors advocate boosting aluminum’s already high global 73 percent recycling rate, pointing to UBC collections in some parts of the world—including the United States—as areas for potential improvement.

“The U.S. offers the biggest opportunity to implement a modern national bottle bill, and there is momentum among industry players and recyclers to enable that ambitious policy,” the article’s authors write.

They also point to a document issued by packaging firm Ball Corp., in cooperation with aluminum producer Novelis and technology vendor Tomra, that offers “a vision to achieve a 90 percent recycling rate and 85 percent recycled content for aluminum cans by 2030.”

In the end-of-life vehicle sector, the article states, “The challenge with [aluminum] automotive scrap lies in sorting the aluminum alloys to retain the quality and value of the original components.”

Increased dismantling before shredding offers one alternative, the authors say, though executives and managers in the auto recycling and scrap processing industries may question whether the current labor market can support such activity.

The report also points to the goal of technology that can keep shredding and automated sorting in the picture. “Today, [shredded aluminum] can be sorted through 1) robotic sorting that uses visual identification of scrap to automate the sorting process; 2) infrared sorting to analyze material composition; 3) X-ray fluorescence to sort based on elemental composition; and 4) eddy-current sorting using magnetic fields,” write the WEF and Accenture authors.

The online article can be found on this web page.

Aluminum users and producers are backing technology to match scrap to its highest purpose.

An early December article on the website of the Switzerland-based World Economic Forum (WEF) points to “aluminum’s infinite recyclability” as “the answer to the aluminum industry’s emissions issue.”

The four co-authors of the WEF article write, “Over 90 percent of current aluminum emissions are associated with primary production. But secondary, or recycled, aluminum uses just 5 percent of the energy required for primary production.”

Boosting aluminum’s already high global 73 percent recycling rate is one task required to further reduce emissions for the light metal. The WEF co-authors also state, “The challenge with [aluminum] automotive scrap lies in sorting the aluminum alloys to retain the quality and value of the original components.”

Increased dismantling before shredding offers one alternative, say the authors, but in most nations that generate large numbers of end-of-life vehicles (ELVs), the labor market is tight, so hiring people to take vehicles apart by hand may run into a barrier of its own.

Scrap processors and their technology vendors continue to seek out automated sorting improvements. In one recent example, Germany-based Steinert GmbH supplied equipment to Sweden-based Stena Recycling at one of its facilities in Roskilde, Denmark.

“Advancements in technological sorting represent one of the greatest differences” in today’s market, says Jesper Fournaise of Stena. “Now, here in our own country, we’re able to use X-ray technology to meet very high quality standards in order to put the metal back into commercial use.”

Another Germany-based technology provider, Erdwich Zerkleinerungs-Systeme GmbH, engaged in a project in Austria that sought to better separate aluminum from magnesium during and after the shredding process.

After consulting with Erdwich, the Austrian firm decided to install an Erdwich RM1350 ripper. An advantage of this twin-shaft ripper developed by Erdwich, compared to the shredder used previously, is that the blades “do not simply shred the input material, but literally tear it apart due to their special shape. This allows the plant to grip the aluminum scrap far better, and there are fewer blockages or damage to the machine,” states Erdwich.

To further purify the aluminum, Erdwich soon started planning and implementing what it calls a complete plant concept into which the existing twin-shaft shredder was integrated. The shredding plant was supplemented by a hammer mill also developed by Erdwich, but it entailed a few challenges.

“For one thing, the space available for the plant was limited to a very narrow, half-open hall, which required planning with centimeter precision and foresight,” says Harald Erdwich, managing director of Erdwich GmbH. “On the other hand, the input material consists in part of undefinable components such as nonmetallic impurities or even solid iron parts, which made sorting difficult. Therefore, it was necessary to implement several processes and the corresponding equipment to separate different materials and alloys.”

While ultra-fine materials such as sand or dirt particles are sorted out by a vibrating screen, a magnetic drum separator ensures that ferrous portions are removed from the shredded aluminum scrap using magnetic technology.

A zigzag air separator also separates foil and wood particles from the metallic components, and an eddy current separator is responsible for filtering out plastic parts. For impure alloys, a fourfold sorting device also is provided, which works, among other methods, by means of X-ray detection. “This makes it possible to achieve a particularly fine separation of the material and thus a high degree of grade purity,” states the equipment company.

Erdwich says the input fractions are not always composed in the same way, so the company what for it was a new concept: three different modes that can be set for the efficient processing of the material.

“In mode A, the aluminum scrap is fed directly into the RM1350 pre-shredder by means of a gripper or stacker and then re-shredded by means of our HA800 hammer mill,” says Harald Erdwich. “The mixed fractions are separated using various sorting techniques and then discharged into containers provided by the customer.”

Mode B enables the faster processing of pure aluminum scrap. After shredding in the twin-shaft shredder, separation of ferrous and stainless material is carried out by means of a double magnetic stage.

In Mode C, double feeding is used in order to be able to process input materials made up of different compositions simultaneously. This makes it possible to process both pure aluminum scrap, as in mode B, and aluminum/copper cast material in parallel. The latter is fed via the mobile conveyor belt into the vibrating feeder, crushed by a hammer mill and then separated by means of X-ray sorting and transported into containers.

The different modes can be selected on the operator panel by before the system is started. Depending on the composition of the material and the mode, a throughput of up to 2,500 kilograms per hour (5,500 pounds per hour) can be achieved.

“The shredding process for aluminum scrap, in particular, must be constantly monitored,” says Harald Erdwich. “As soon as aluminum is shredded to less than 4 millimeters (0.15 inches), or if the input material contains aluminum alloys with magnesium components, it can ignite and trigger an explosion.”

He continues, “To avoid accidents, the cutting mechanism geometry of the ripper is designed in such a way that the material is shredded as gently as possible under temperature-reduced conditions. Sensors also ensure that no excessive dust concentration can occur inside the hammer mill if, for example, there is a filter defect or other failure of the extraction/filter system.”

The company also announced enhancements to its sustainability performance and embedded ESG more deeply into its business strategies.

Sales once again rose for Delaware, Ohio-based Greif as the company has announced its fourth-quarter earnings. The packaging producer reports net sales of $1,570.5 million in the fourth quarter of 2021 compared with $1,161.3 million in the fourth quarter of 2020 — a 35 percent increase that Greif attributes to stronger volumes and higher selling prices.

The company also reports adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $211.3 million compared with EBITDA of $154.5 in the fourth quarter of 2020. Greif Chief Financial Officer Larry Hilsheimer says the adjusted EBITDA result overcame an old corrugated cardboard (OCC) index headwind of $51 million and approximately $40 million of nonvolume-related transportation and manufacturing inflation.

“Big picture, our team delivered excellent fourth-quarter results despite significant external challenges,” Hilsheimer said during Greif’s earnings call Dec. 9.

Greif President and CEO Pete Watson said during the earnings call that the company’s global industrial packaging business (GIP) sales were $951.6 million in the fourth quarter of 2021 compared with $652.3 million in 2020, a nearly 3 percent increase benefited by a strong overall global primary product line.

GIP’s stronger volumes and higher average selling prices resulted in higher segment sales and gross profit year-over-year. Its fourth-quarter adjusted EBITDA rose by approximately $47 million due to higher sales, partially offset by higher raw material manufacturing and transportation costs, Watson said.

“Generally speaking, our industrial end markets remain healthy,” Watson added. “Customers report solid order backlogs and strong underlying demand, but they do face external supply chain disruptions. Across GIP we see little indication of customers building inventory, but some are carrying more stock than normal due to supply chain disruptions impacting their ability to ship to their customers.”

Watson also reported the company’s Paper Packaging segment's fourth-quarter sales rose by roughly $120 million compared with the fourth quarter of 2020 due to stronger volumes and higher published containerboard and boxboard prices.

“Volume demand across our paper business remains strong that our combined mill backlogs exceed eight weeks,” Watson said. “Fourth-quarter volumes in our CorrChoice sheet feeder system were up 2.4 percent today versus the prior year. Demand for durables, e-commerce growth and the OEM’s [original equipment manufacturer's] auto supply chain all remained very solid, and we see no slowdown on the horizon.”

Greif also notes several environmental, social and governance (ESG) achievements in 2021. The company says it diverted 90 percent of waste from landfills at more than 140 of its global facilities, increasing its global diversion rate to nearly 85 percent compared with 70 percent in 2020, and 50 percent of its global facilities had achieved zero-waste-to-landfill status at year-end.

“The takeaway here is that Greif’s strong ESG focus is core to our plans for sustainable value creation,” Chief Operating Officer Ole Rosgaard said.

Looking ahead to fiscal year 2022, Grief says it anticipates spending between $150 million and $170 million in capital expenditures and an adjusted Class A earnings per share of $5.85 million to $6.45 million.

The company says the acquisition expands ADS’ reach into the southern region of the United States.

Hilliard, Ohio-based Advanced Drainage Systems Inc. (ADS), a provider of water management solutions in the stormwater and septic wastewater industries and plastics recycler, has acquired Jet Polymer Recycling, a privately owned recycling company located in Fort Payne, Alabama.

“We are excited to welcome Jet to ADS,” says Scott Barbour, president and CEO of ADS. “This acquisition advances our strategic priority to expand the ADS Recycling capabilities to support future growth while also underpinning ADS’ commitment to environmental sustainability.”

According to a news release from ADS, the transaction secures high-quality recycled plastic to leverage in the on-site septic wastewater business. It also provides the company a platform to obtain additional high-density polyethylene (HDPE) in the southern region of the United States, which remains a key growth area for both ADS and Infiltrator Water Technologies, a subsidiary of ADS.

The terms of the transaction were not disclosed.

Jet Polymer has three locations in Alabama and Georgia. Jet Polymer is currently the largest supplier of recycled polypropylene (PP) for Infiltrator Water Technologies.

ADS Recycling, formerly Green Line Polymers, purchases high-density polyethylene (HDPE) bales, flakes and pellets from postconsumer and postindustrial sources. According to ADS' 2020 sustainability report, in its 2020 fiscal year, the company reprocessed 81 percent of the recycled HDPE purchased by ADS through its recycling operations. ADS subsidiary Infiltrator mainly buys recycled HDPE flakes and pellets and PP from postindustrial and postconsumer sources. In the company's 2020 fiscal year, its recycling operations reprocessed 27 percent of the recycled plastic purchased by Infiltrator.