The soaring freight has attracted attention, but the value of black scrap has helped to make up for the cost of the material trader.
At the ferrous metal scrap roundtable at the online event of the International Recycling Week in late June, panel members stated that global inflationary pressures are already in place. However, although freight and capital costs have increased, the soaring price of black scrap has made this pain less obvious.
Two traders in the group stated that the global steel industry has rebounded from the cooling-off period in the spring of 2020. “Demand for scrap has always been much better than the rate of production,” said Nathan Fruchter of Idoru Trading & Consulting in New York. "I think this is because most steel producers continued to produce during the pandemic."
Ved Prakash of Gemini Corp, a Belgian secondary commodity trading company, pointed out: “From February to April 2020, our shipments decreased by only 20% compared to the previous year.” Since then, trade volumes have rebounded. From June 2020 to now, the scrap steel business has been normalized. "
Traders say that the bigger problems associated with COVID-19 are on the supply side. "Scrap is a product of wealth. If the economy works well, people will spend a lot of money, throw away more money, and generate more waste," Fruchter said. "During the lockdown, each family generated less waste, collected less, and transported less to the yard. There were also fewer demolition projects, especially in the first few months of this crisis."
Prakash said: "Over the past 20 years, the total amount of scrap steel in international trade has averaged about 100 million tons. In 2020, it has dropped to 85 million tons. The reason for this decline is that there has been a halt for three or four months in all parts of the world."
With economic recovery around the world and government investment in infrastructure, the price trajectory of steel and scrap has been stable. Shipping costs and credit costs are also rising.
Prakash said that Gemini transports about 130,000 ocean containers each year, transporting a variety of goods, so it will thoroughly analyze logistics costs. He said, perhaps surprisingly, the increase in global shipping rates has not caused an undue burden.
“The [transaction] price’s logistics cost percentage is usually around 20%,” Prakash commented. He said that although the increase in freight rates has attracted a lot of attention, it will “still be the case” by mid-2021, as scrap prices have also risen. "The overall price mechanism is not very different; freight has doubled or tripled, but the same is true for scrap prices, so the net impact is zero."
However, Prakash said the risk measured by the cost of capital has increased. Taking India as an example, he said that the cost of capital for buyers of imported scrap iron is almost US$40 to US$45 per ton. "Today, they are able to absorb it" because scrap prices and profit margins are high, "but in general, it is a huge cost."
When asked whether greater risks would lead to more hedging activities in the ferrous metal market, Fruchter questioned the ability of bulk cargo owners to provide hedging through current methods and contracts. "The terms trading volume and ferrous metal hedging do not fit the same sentence to some extent," he quipped, referring to the current 10 metric ton lot size of the London Metal Exchange (LME) contract. "If you look at the Turkish contract held by the LME, you will find that it is a headache. How can the 30,000 tons of goods be hedged?"
Joshua Toney, who works in New York for London-based Freight Investor Services, said shippers have historically not wanted to hedge such large cargo. However, he added, “I have seen 5,000 tons of transactions in the market for several consecutive days. If you hedge half of it, you can complete it in 10 trading days” for commodities with a price range of 30 days.
Tony added, “We have seen steel manufacturers do this to layer their hedges.” By hedging 1,000 to 4,000 tons per day, “they are able to layer within the time period required to perform the hedge.” Tony urges ferrous metals Buyers and sellers of scrap are considering adopting this technology, adding: “If we are all sitting there waiting for the arrival of a large entity and [are] waiting for that market, it is like waiting for a pig to fly.”
Sean Davidson, the roundtable host of the Singapore-based Davis Index, responded that before the large producer Alcoa started using it, the LME aluminum contract, which now has a large volume of transactions, was underutilized for nine or 10 years. "That's all it needs," Davidson said.
Panelists also discussed China's future role in the global scrap ferrous metal market. Prakash said the Chinese government’s push for low-carbon steel has prompted steelmakers there to use more scrap. But he said that the country has about "410 million tons" of ferrous metal scrap or scrap steel. Davidson boldly stated that improving China's domestic processing capacity and quality "may actually mean that they may be able to export rather than import within a few years."
Fruchter believes that Chinese buyers have supply problems, especially if the steel mills there want to buy bulk goods from the United States or Europe in accordance with the newly established Chinese government standards. Fruchter said that bulk shippers on the West Coast of the United States "have been shipping scrap to various markets for 50 years." “Do Chinese buyers want to re-invent the wheel and develop a new HMS [remelted steel] standard? This is ridiculous. Transporting goods and facing the risk of having to return the ship if someone thinks the quality is not good. This is crazy, too It's ridiculous."
Panelists said that although Prakash is worried about countries becoming more protectionist in scrap steel, global demand seems to be expected to keep the steel and ferrous scrap industries active. "I think it's fair to say that the current global demand for steel looks very good, so this means that the demand for scrap looks good," Fruchter said.
Davidson said that although the huge price difference between scrap and hot-rolled coil prices has attracted attention, long product (rebar) mills are larger buyers. He said that as "rebar prices remain at around US$900 per ton", this may limit black scrap prices.
International Recycling Week is organized by the magazine "Middle East and Africa Waste and Recycling" in the United Arab Emirates.
The company completed the shipment of the first batch of battery materials through cooperation with Marubeni.
Retriev Technologies, a global leader in battery recycling and management based in Lancaster, Ohio, announced that it has completed shipments of the first batch of recycled battery materials to Tokyo manufacturer Marubeni in February 2021. Announced the establishment of a strategic partnership to develop an innovative business model for end-of-life lithium-ion batteries (EOL LIB).
According to the news released by Retriev, the two companies are working together to recover valuable metals from EOL LIB to expand the recycling business model of electric vehicle batteries in the battery industry to closed-loop battery recycling.
Todd Coy, vice president of Retriev, said: "We are very pleased to see that this strategic international effort is underway and is involved in creating a sustainable circular economy to reuse battery raw materials globally." "We look forward to the cooperation with Marubeni. Positive results, Marubeni is a leader in the trading of key raw materials for the battery industry. We believe that our progress will have a positive impact on our ability to ensure the secondary battery raw materials required for a sustainable battery ecosystem. We are the first to ship to Japan this month The shipment contains 17 tons of materials, which will be used to verify the production of cathodes for new batteries."
Retriev said that Marubeni and Retriev are currently discussing secondary battery materials with positive electrode manufacturers.
Beast aims to crush ferrous metals, non-ferrous metals, electronic scrap and truck tires.
BCA Industries, a Milwaukee-based manufacturer of recycling equipment and industrial shredders, said that the paper shredding technology it provides can help recyclers use advances in hydraulic systems to shred hard metals to produce large amounts of debris.
According to a press release issued by BCA Industries, traditional high-capacity shredders have some weaknesses, such as cutters, shafts, bearings, and hydraulic systems that are not really designed for such capacities or loads, which may cause malfunctions and production downtime . In addition, the use of different equipment in different operations to pulverize, screen, and grind metals and materials to a certain size has always been a bottleneck in processing. In order to ensure high output and reliability, BCA Industries stated that it has developed a large-capacity, high-torque shredder to reduce hard metal and aim to minimize failures.
The company's customizable ES2000 shredder is called "The Beast" and is designed for demanding applications such as ferrous metals, non-ferrous metals, electronic scrap and truck tires. Paper shredders are divided into stationary and portable devices. Using a 24-inch diameter hard-faced cutter using basic AR-500 alloy, a 55-inch x 72-inch x 44-inch cutting chamber and an 8-inch 4130 chrome steel shaft, the device can reduce very large metal scrap. The shredder has a total gross weight of 24,000 to 38,000 pounds, excluding power supplies, and is designed to crush 15 to 35 tons of metal or dense materials per hour, with a torque of 179,000 foot-pounds per knife. When greater throughput is required, it can be rated up to 800 horsepower and use dual cutting chambers. In order to maximize the high torque throughput and efficiency, it uses a pressure compensated variable pump, which allows the speed to increase and decrease according to the load.
According to BCA Industries, the device is designed to use a cheap cluster drive system composed of eight small hydraulic motors to generate redundancy in the power supply, thereby eliminating most of the possible downtime, thereby solving the weaknesses of traditional shredders . These cluster drive motors are readily available and easily accessible, and BCA Industries reports that they increase reliability while minimizing costs.
According to BCA Industries, the 8-inch Chromoly shaft replaced the 7-inch shaft, extending the service life. Instead of the old HEX shaft design or double-key round shaft, the device uses a six-key design in which the knife rides on the disposable key instead of directly on the shaft. Due to the use of keys instead of shafts, this design eliminates shaft flushing and simplifies tool replacement.
According to BCA Industries, this shredder is designed with a double labyrinth drop zone and outer bearing, eliminating any direct path to the bearing. It also allows a path for the compressed material to leave the shredder.
Chura will join the aftermarket sales team.
Davis-Standard, located in Pocatuck, Connecticut, announced that James "Jim" Chura has been hired as an aftermarket sales engineer to support Davis-Standard's processing customers in the southeastern United States and Mexico. He will be responsible for promoting after-sales sales, solving technical problems in customer consultation and quotation, and providing after-sales assistance to customers.
Chura brings 14 years of industry knowledge to his new position and has held various sales and management positions, most recently as the regional sales account manager for ABB in Raleigh, North Carolina. This includes experience supporting customers in the paper, processing and packaging markets.
"Jim understands the processing industry and the needs of our customers in the Southeastern United States," said Andrew Alaya, Davis-Standard's vice president of after-sales sales. "He is very aware of customer needs and available conversion technologies and upgrades. This is in line with our goal of using after-sales service to help our customers get the most from their equipment investment, while improving profitability and product quality."
Chura is a member of TAPPI (Technical Association for Pulp, Paper and Processing Industries) and is certified by TAPPISAFE. He graduated from the University of Missouri in Columbia.
You can contact Chura at jchura@davis-standard.com.
The Boston-based safe destruction business will use the proceeds from the sale to reinvest in other growth areas of its business.
Iron Mountain, a storage and information management services company based in Boston, announced that it has sold a portfolio of five facilities to London-based Intermediate Capital Group (ICG). At current exchange rates, total revenue is approximately $178 million. The transaction with a total area of 550,000 square feet is a sale and leaseback transaction, and the property is located in the Greater London area. Iron Mountain will remain in these facilities for the initial 12-year lease, with the option of renewing the lease for 20 years.
According to Iron Mountain's press release, the transaction is part of the company's ongoing capital recovery program. Iron Mountain said it expects to use the proceeds from the sale to reinvest in areas where its business grows higher.
Barry Hytinen, Executive Vice President and Chief Financial Officer of Iron Mountain, said: "With our strong development channels and attractive market valuation of industrial assets, we are very pleased to continue our capital recovery plan." "Sale and leaseback of these assets Allows us to generate a large amount of investable income, while basically maintaining long-term control of the facility. On the basis of leverage neutral, we estimate that this transaction will generate nearly 140 million US dollars of capital, and we intend to invest it in higher Areas of growth include our data center business."
ICG Director Chris Brown added: “The Iron Mountain portfolio is a typical example of mission-critical real estate that ICG’s sale and leaseback fund seeks to invest in. This is the fund’s third transaction in 2021 and the second transaction in the UK. , Following Jaguar Land Rover’s 2.94 million square feet of forward funding for its new plant in Mercia Park earlier this year."
ICG was consulted by its asset management partners Marchmont Investment Management and CBRE, while Iron Mountain was consulted by Jones Lang LaSalle.