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THE PULSE
Newsletter of the Canadian Association of Recycling Industries
Volume 14, No. 8, August 2009

President's Message | Fast Facts

PRESIDENT’S MESSAGE

Everybody is closely watching the industry and the world news for any positive signs. In fact, recently there does seem to be some encouraging reports and stories.

Steel production in North America for example has increased during the last couple of months. Prices for carbon flat-rolled steel, spot market hot-rolled sheet, cold-rolled sheet and hot-dip galvanized sheet have all been increased. Ferrous scrap tags have also recently increased, particularly in the Southeast United States. Scrap demand on the East coast is also reported to remain steady because of the need to satisfy several Asian countries’ increasing demands.

In Europe, prices have risen for secondary aluminum due to the growing demand from die casters which supply the automotive industry and the need to replenish depleted stock. Additionally, ferrous scrap prices for supplies to Turkish buyers have also been reported to have increased.

The positive move in the automotive sector is a major driving force. Although still well behind sales from one year ago, the top seven automotive bands just reported a monthly sales increase of 12.6% for the month of July. Assistance in the U.S. through the “Cash for Clunkers” is certainly showing a positive impact. Three Billion dollars has been allocated to this program, and the automakers have also contributed additional rebates for a combined savings of up to $ 9000 per vehicle on new car purchases. This has gone a long way in depleting old inventories of cars on the lot, and has stimulated new car production – a very good sign for the economy.

Other sectors such as aerospace are reported by some in the aluminum market to have solid long-term fundaments. Similarly, the construction sector, which has received substantial economic stimulus through various programs in both the U.S. and Canada, has yet to deliver its full potential. These programs usually take some time to produce results. Statistics Canada recently reported an unexpected increase in building permits for both residential and non-residential construction projects.

On the international front, Goldman Sachs just issued a report that stated that the BRIC nations - Brazil, Russia, India and China - will account for half of the globe’s consumption growth in 2010. China alone was expected to account for 30% of this growth. This will exceed the expected growth of the U.S., Japan and Germany combined. This progress is predicted to move gradually from low-value-added products to those at the higher end such as vehicles, office and telecom equipment. In particular, demand from China next year is reported to likely create a commodity shortage since it consumes about a quarter to a third of world production of commodity raw materials.

All of this certainly sounds good for the scrap industry, but is the recession over? According to the American Iron and Steel Institute, raw steel production has increased for the last 7 weeks as mills operated at a capacity utilization rate of 53.5%. Although many people are excited about the recent turnaround, we need to remember that in the corresponding week last year, the operating rates were 90.4%!

In summation, although it appears that the worst is behind us, let’s remain cautiously optimistic about our immediate future.

Sheldon Jarcaig
CARI President

FAST FACTS

• Waste Management Inc. has opened a $10 million 65,000-square-foot construction and demolition debris recycling center near Hillsboro, Oregon. The facility, which will accept only C&D waste and sorted recyclables, has a translucent roof that allows for natural lighting to reduce energy consumption. The roof also has a rainwater collection system.

• Panasonic Eco Technology Center Co. an unit of Panasonic, Japan announced their new technique that recycles CRT TVs in 50 seconds, three times faster and generating less waste than previous methods. The method utilizes laser technology, which automatically measures the screen size and cuts the front glass panel from the CRTs. This new technology is in anticipation to the surge in recycling older TVs ahead of 2011 and the shift to digital broadcasting. The center expects to recycle 650,000 TVs in 2011, compared to roughly 300,000 units in 2008. Currently, the center in Kato recycles about 750,000 home appliances from six prefectures in the Kinki region, annually.

• The European plastics industry launched a campaign to challenge itself, government and consumers to prevent sending plastic to landfill. The program – The Plastics 2020 Challenge is the first time plastics manufacturers and processors called for a widespread and open debate to set targets for increasing plastic recycling. The plastic industry is pledging commitments to the "four R’s" – reduce, reuse, recycle and recover, including doubling the recycling rate of plastic packaging by 2020. The campaign also challenges government, MPs, environmental groups and consumers to collaborate with the industry to be more efficient and resourceful. The group unveiled a website, which calls for interested parties to join the debate on the benefits, use and disposal of plastic products and packaging.

• Cookware manufacturer Calphalon launched a mail-in program offering to recycle obsolete pots and pans of any brand for free when consumers purchase new Calphalon products. The new cookware will come with shipping boxes while pre-paid shipping labels are available online. The packed old cookware can be dropped at a FedEx location. This program is only accepting metal cookware, such as frying pans, skillets and stock pots. Calphalon will not accept glass cookware or utensils and requires that all products be washed prior to shipping. Most cookware is produced from non-ferrous metal, such as aluminum or stainless steel.

• The Chinese government recently amended its “list of Imported Waste and Scrap,” which covers materials that are prohibited, allowed with restrictions, and allowed under automatic license. The new lists are available at http://www.isri.org/china. Members should review these lists to determine whether materials they ship to China have been affected.

• Shipping authorities recently gathered in Hong Kong to discuss and adopt the first-ever Ship Recycling Convention. Despite opposition from environmentalists and US/ Europe scrap recyclers, the International Maritime Organization (IMO) succeeded in obtaining the signatures of 59 countries for an initiative designed to improve ship recycling standards. The Convention will become binding two years after 15 states, representing 40% of world merchant shipping by gross ton nage, have either signed it or have deposited instruments of ratification, acceptance, approval or accession with the IMO's Secretary General. The agreement requires all vessels to carry thorough, updated inventories of hazardous materials throughout their years of service, and for this information to be provided to recycling facilities.

• On July 21, 2009, India’s Ministry of Environment and Forests (MoEF) issued a new notification changing the Hazardous Waste Rules of 2008 by declaring all scrap materials to be hazardous wastes. While the term hazardous waste is still attached to scrap materials, the MoEF had modified some of the hazardous waste rules for common types of materials: ferrous and non-ferrous metals scrap; electrical materials; heavy fraction scrap; metal-bearing wastes from smelting and refining; mill scaling from iron & steel manufacture; and most paper and cardboard scrap/waste.

The following are the four major changes:

1. While “Form 9” and a pre-shipment inspection are still required, MoEF seems to have removed the requirement of a test report of analysis from an accredited laboratory for most of the “common”/innocuous metals and paper.
   
   
2. It appears that rather than a mandatory sampling and analysis by Customs authorities, Customs may, if they consider it necessary, make random inspection before clearing the shipment.
   
   
3. For an import license, MoEF now treat paper and metals equally with regard to requirements. The change in terminology has adversely affected brokers who were previously acting as the importer of metals and paper. This appears to only affect brokers in India.
   
   
4. Form 9 has been modified to require less duplication of information (i.e., attaching a copy of the bill of lading can replace writing the carrier(s) information on the form); the insurance and financial guarantees language has been removed from the Exporters Declaration; and the Importer’s Declaration has been strengthened. Notably, the Exporter’s Declaration for paper has been modified which creates a contradictory issue because one cannot certify the shipment doesn’t have hazardous waste when Indian government deems scrap paper as “hazardous waste”.