by Gregory L. Crawford

mericans still are recycling steel, with an overall recycling rate A of approximately 65 percent in 2001. This success occurred in spite of the fact that steel scrap prices have been extraordinarily dismal over the past three years, even reaching negative values in some areas. Apparently, steel recycling happens whether markets are high or at their recent abominable low. However, the steel industry needs new levels of accomplishment, remembering the truism that if one is not advanc- ing, one is regressing.

Recycling higher percentages of steel is feasible, as described below, but not without a few challenges. The culrent recycling rate for steel bumps up against the natural effect of diminishing returns, suggesting that little more steel can be recycled without increasingly prohibitive costs, both economic and environmental. And, much of the one-third fraction of steel seemingly not recycled each year actually remains in use as durable goods in "living inventory" for future recycling, so that, ultimately, about 88 percent of all steel is recycled. As the market now positions itself to rebound, managers in each link in the recycling chain - collectors, processors and melters - should improve their respec- tive operations to pursue as much of the remaining 12 percent as pos- sible, thus advancing steel recycling toward "zero waste."

Opportunities for melters Low prices paid for steel scrap over the past thee years directly reflect the horrific business conditions of the domestic industry. Melters saw sales volumes decrease drastically, while sales prices for new steel sank to near absolute depths. These recent economic difficulties are unprece- dented and leave lingering uncertainties. Some mills remain in bank- ruptcy, while others were forced out of business permanently by the flood of unfairly traded imports that began in 1998. As a result of Pres- ident Bush's decision, under Sections 2011203 of U.S. trade law, to impose tasiffs ranging up to 30 percent on cestain steel imposts for a period of at least thee years, the steel industry anticipates a return to

I

E lesourhe Recycling May 2002

normalcy in the months ahead. Recovery may not be quick and strong, but it should be steady and tangible.

Beyond resurgence of normal product demand, the steel industry continues with technical and marketing development of new steel prod- ucts, such as residential steel framing, ultra-light steel auto bodies and steel utility poles. These have great promise of requiring more pro- duction tons and thus more scrap to fulfill steel's inherent recycled con- tent, whether in the basic oxygen furnace or the electric arc furnace.

The most significant potential for new business growth, however, may be from realizing badly needed steel industty consolidation to cre- ate the classic business model of the oligopoly. Typified by a single pricing leader among several pricing followers, this will reduce cut- throat competition among domestic producers, boosting production while stabilizing and increasing prices to levels more consistent with true costs. It can have the further effect of making the domestic indus- try much stronger for competition in a world market dominated by international oligopolies and monopolies.

Opportunities for collectors and intermediate processors With better prices, recycling systems of all kinds have an added incen- tive to inc~case the total volume of steel recycled. Yet, as volume increas- es, it is impostant to retain or improve the value of steel through con- sistent controls for scrap quality and cleanliness. Obviously, increas- ing the scrap flow requires a better hasvest of existing steel scrap types or the introduction of new sources of steel scrap.

Curbside and drop-off collection programs may increase their vol- ume of material collected through revitalized education and outreach to participants or expansion to new areas of service. If not included

Gregory L. Crawford is vice president, operations of the Steel Recycling Institute (Pittsburgh). He can be reached at (412) 922-2772 or sri@recycle- steel.org.

already, empty steel paint and aerosol cans should be added to the mix of steel cans collected, as so many programs already have done. Com- munities deliberating startup of formal appliance recycling programs now may move forward with implementation, after deciding on the most effective system for the municipality.

A challenging but potentially great leap forward in recycling is the addition of ferrous and nonferrous scrap to the mix of materials collected in curbside and drop-off programs. Imagine, for instance, miscellaneous auto parts (from brake drum rotors to mufflers), fit- tings from old water heaters, copper wiring of all kinds and old bar- beque grills (less the liquid propane tank). This should be initiated and conducted in cooperation with local scrap processors who best can advise on options for the collection and handling of this inci- dental, but cumulatively large potential source of ferrous and non- ferrous scrap. Such material routinely is lost to landfill except in areas served by modern waste-to-energy plants, where metals recovery takes place automatically.

In their review of existing programs, however, managers also must aggressively seek ways to reduce operating costs, not only to increase profitability, but also to use fewer resources. To be environmentally beneficial, the total process of recycling must conserve more resources than it consumes. Thus, some communities might convert from mul- ti-stream to single-stream recycling collection in order to provide greater simplicity for the participants and to benefit from fuller truckloads. Naturally, this must be balanced with the added costs of a new or mod- ified materials recovery facility. Other communities might simply reduce the number of collection runs made monthly, coupled careful- ly with a coordinated education program.

Opportunities for buyers Relationships with established buyers should be maintained steadfast- ly. Most ferrous scrap buyers remain regionally competitive, passing

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~ e s o u r c e Recycling May 2002

along price increases and decreases with market cycles, according to the terms of any existing contract. However, the buyer cannot reason- ably be expected to pass along such changes instantaneously, since these periods of adjustment typically have behind-the-scenes compli- cations that sort themselves out in the longer term. Meanwhile, the knowledgeable seller will stay aware of market trends and then inquire with the buyer, as appropriate.

As a special note, larger generators of steel can bundles may inves- tigate options with local melters who previously have not used this type of scrap, especially foundries or mini-mills. To assist, two documents are available from the Steel Recycling Institute. The BeneJits of Steel Can Scrap provides the chemistry of steel cans, and Steel Can Scrap Industrial Users provides selected contacts and general specifications. The gatekeeper for any melter is normally a traditional scrap proces- sor. Therefore, the generator should iden* the processor and provide the above documents, noting the superior chemistry and homogeneous nature of steel can scrap. The generator may gain a better price for the steel can scrap and also save transportation expense.

The potential added value coming from a local melter may justify some change in processing, such as making loose steel can bales with pre-flattened cans (so as to fall apart easily at the foundry for loading) or making high density steel can biscuits, one cubic foot in size or small- er (so as to charge into the melt proper1 y).

Although steel still earns its reputation as the most recycled material, there clearly is room for new and significant gains in recycling accom- plishment to feed tomorrow's markets. A knowledgeable, aggressive marketplace of collectors and processors, coupled with a thriving domes- tic steel industry, will advance steel recycling to new heights.

RR

Formore information about the Steel Recycling Institute, visit its Web site at www.recycle-steel.org.

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