Premiums for high grades continue to climb as supply remains hard to come by.
Recovered paper industry sources nationwide are reporting less and less available supply, particularly among high grades, as generation of those grades has not yet recovered from the mass exodus at offices and commercial buildings since the onset of the coronavirus pandemic in 2020.
According to pricing figures from Fastmarkets RISI’s July 7 Pulp & Paper Week “Price Watch,” premiums for all deinking grades increased by $10 per ton across the board, with sorted office paper (SOP) as high as $240 to $250 per ton in most regions in the U.S.
“Right now, you’re in an environment when commodities in general, any commodity in the world, is pretty much higher [because of the] supply chain [and] all the different reasons for what’s going on in the world,” says Brent Kirstein, president of 4G Recycling in Deerfield Beach, Florida.
“There’s definitely a huge spike in demand, and the mills are just not getting enough supply,” Kirstein adds. “SOP mills are having to buy anything they can get their hands on—they’re having to pull from further away, and that’s just on the U.S. side. On the international side, it’s even crazier.”
SOP export premiums also increased, with the Los Angeles and the San Francisco/Oakland regions seeing $20 per ton hikes, according to RISI. Kari Talvola of Fibre Trade Inc., Burlingame, California, says, “Demand is definitely there. I don’t see that slowing at the moment; however, given the state of the economy, that remains to be seen. But as of today, I can pretty much sell everything that I have—export or domestic.”
Kirstein says he’s seen instances of large tissue mills pulling supply from thousands of miles way—even with the increased fuel and freight costs—when, traditionally, those mills would only pull their supply from a few hundred miles away.
He also notes traditional mill buying practices are not helping the situation, adding, “Where I think from a mill standpoint they do things wrong is they try to only buy what they need instead of maintaining a healthy inventory. And because of their buying practices and how they want to manage their inventory, they have these spikes.”
Several sources report seeing paper orders made up to four to six months in advance rather than what typically has been two or four weeks’ notice, and with less paper available and generation down, Kirstein says, “Mills are getting desperate and it’s raising the market.” (Read more on the state of the high grades market from Kirstein and Talvola in the Paper Commodity Focus starting on Page 42).
The shifting supply and demand dynamics haven’t deterred new capacity and merger and acquisition activity. In a move announced July 6, Paper Excellence, through its wholly owned subsidiary Domtar, acquired Resolute Forest in a deal worth $2.7 billion that will add to the Paper Excellence Group’s annual paper and pulp production of 2.8 million metric tons.
The acquisition adds 1.1 million metric tons of pulp capacity, 116,000 metric tons of tissue capacity, seven paper mills totaling 1.5 million metric tons of capacity and 22 wood products facilities to the Paper Excellence portfolio.
The technology is commonly used to recover a nonferrous concentrate on the eddy current drop.
Sensor-based sorting technology has secured a firm place in higher volume e-scrap shredding operations. The most popular application by far is the recovery of a nonferrous concentrate on the eddy current drop, which also includes the circuit boards. Using the best sensor-based sorting machines, even the thinnest copper wires can be recovered, leaving behind a plastic stream with very low metal concentration.
Making a circuit board plus wire concentrate mixture is the second-most-popular application in electronics recycling. This often happens as a secondary pass after the nonferrous concentrate has been made. To recover both of these material streams, an electronics recycler needs a sensor-based optical sorting machine that is multifunctional, which means it incorporates inductive and near-infrared/visible (NIR/VIS) sensors.
Plastics recovery often happens as a “negative sort,” meaning as it is what remains after all the valuable metals have been removed. These plastics often are shipped as a mix of polymers.
Read about how Premier Surplus of Georgia is employing optical sorting technology to process e-scrap.
Sorting plastics from shredded end-of-life electronics with sensor-based sorting is challenging: Only the nonblack plastics can be efficiently sorted using NIR-based sorters. While optical sorting technology is available commercially that can sort black plastics by polymers, it has its limitations. The variety of filler materials used in black plastics themselves makes it even harder to properly recycle the black with downstream processing. Still, with all these challenges on the plastics side, the success of sensor-based sorting on the nonferrous side has secured this technology a spot in any high-volume e-scrap shredding operation: They are often the machines that produce the highest revenue of the shredding plant.
Good material preparation is the key to make these sensor-based machines successful. The combination of machines used to do this preparation will depend on your system designer and its level of experience. The material needs to be liberated properly with the right shredding technology and presented in the right way to the machines so they can do their job optimally. That means ensuring the material is in a single layer and well-distributed on the belt and not clumped together. This improves the optical sorter’s ability to survey the belt and reduces “collateral damage,” or firing on unintended objects, when ejecting materials.
In the second quarter, the company shipped 3.1 million tons of steel and recorded $6.2 billion in net sales. This follows lower profitability in Q1.
Steel Dynamics Inc., an electric arc furnace steelmaker headquartered in Fort Wayne, Indiana, has reported financial results for the second quarter, completed June 30. SDI says it had net sales of $6.2 billion and record net income of $1.2 billion, or $6.44 per diluted share, in the quarter. Excluding the impact from nearly $77 million, or 29 cents per diluted share, in costs associated with the continued startup of its Sinton, Texas, flat-roll steel mill growth investment, SDI says its second-quarter 2022 adjusted net income was $1.3 billion, or $6.73 per diluted share.
The company’s sequential earnings totaled $5.71 per diluted share, while adjusted earnings were $6.02 per diluted share excluding costs of 31 cents per diluted share (net of capitalized interest) associated with construction and startup of the Sinton mill. While year-over-year quarterly earnings were $3.32 per diluted share and adjusted earnings were $3.40 per diluted share, excluding costs of 8 cents per diluted share (net of capitalized interest) for the Sinton mill.
“The team delivered another strong performance, achieving record quarterly operating and financial performance, including record sales, operating income, cash flow from operations and adjusted EBITDA [earnings before interest, taxes, depreciation and amortization],” Mark D. Millett, chairman, president, and chief executive officer of SDI says. “Our second quarter 2022 operating income was $1.6 billion, with adjusted EBITDA of $1.7 billion. This tremendous accomplishment displays the power of our highly diversified, value-added, circular manufacturing model—as the strength in our steel fabrication operations more than offset lower earnings in our flat-roll steel business, as realized flat-roll steel selling values declined during the quarter. Despite softening hot-roll coil steel pricing, we achieved record quarterly steel shipments of 3.1 million tons based on solid steel demand, led by the automotive, construction and industrial sectors, with energy continuing to improve.”
SDI says its second-quarter 2022 operating income for its steel operations remained historically strong at $1.1 billion. The incremental decline in earnings resulted from metal spread compression within the company’s flat-roll steel operations. Demand for its long product steel also remains strong, supporting increased average realized pricing and shipments. The average external product selling price for SDI’s steel operations decreased $22 sequentially to $1,539 per ton, while the average ferrous scrap cost per ton melted at SDI’s steel mills increased $64 sequentially to $538 per ton.
Second-quarter operating income from the company’s metals recycling operations, which are largely comprised of its OmniSource subsidiary, increased to $58 million. That figure was $48 million in the first quarter of this year. SDI attributes the growth to strong demand supporting increased pricing and related metal spread. Solid demand for ferrous scrap resulted in a 7 percent increase in second-quarter 2022 shipments relative to the first quarter of the year.
The company’s steel fabrication operations reported record operating income of $599 million in the second quarter, substantially higher than its sequential first quarter results. SDI says this is because of significantly higher selling values and strong shipments that more than offset marginally higher steel input costs. The company describes the nonresidential construction sector as strong, resulting in a near-record order backlog and higher forward pricing for SDI’s steel fabrication platform. The company says it anticipates this momentum to continue into 2023 based on these dynamics.
For the six months ended June 30, net income was $2.3 billion, or $12.14 per diluted share, with net sales of $11.8 billion. In the first half of last year, SDI’s income was $1.1 billion, or $5.35 per diluted share, with net sales of $8 billion.
First-half 2022 net sales increased 47 percent, and operating income doubled to $3.1 billion when compared with the same period in 2021. Higher earnings were driven by metal spread expansion within the company’s steel fabrication business and steel operations, as increased product pricing outpaced higher raw material costs, SDI says. The steel fabrication platform achieved record first-half 2022 operating income of $1.1 billion, materially higher than the $38 million recorded in the first half of 2021. First-half 2022 operating income for its steel operations was $2.3 billion, an increase of $615 million compared with prior-year results. The average first half 2022 external selling price for its steel operations increased $380 to $1,549 per ton year over year, while the average ferrous scrap cost per ton melted at the company’s steel mills increased $101 to $507 per ton.
“Customer order entry activity continues to be healthy across all of our businesses, conflicting with the more pessimistic emotion in the marketplace,” Millett says. “Despite softening flat-roll steel pricing, our steel order activity remains solid from the automotive, construction and industrial sectors, with energy continuing to improve. Our steel fabrication operations order backlog remains at near-record volumes and forward-pricing levels. This combined with continued healthy order activity and broad customer optimism supports strong overall demand dynamics for the construction industry.
Millett says Sinton’s startup has been “challenged with unexpected power and equipment issues that have impacted their operating time in July,” though he adds that the plan has achieved run rates of 80 percent through the hot side.
Earlier this year, SDI announced it was partnering with Aymium, an Oakdale, Minnesota-based producer of renewable biocarbon products based. SDI owns 55 percent of the joint venture, with Aymium owning the remaining 45 percent. The entity will operate under the name SDI Biocarbon Solutions LLC. Initial plans for the joint venture include construction and operation of a biocarbon production facility to supply SDI's electric arc furnace steel mills with a renewable alternative to fossil fuel carbon using Aymium's patented technology.
“We are excited about our recent partnership with Aymium,” Millett says. “We believe this strategic joint venture will cost-effectively reduce our greenhouse gas emissions, which are already materially lower than our global steel competitors. We also believe Aymium’s process can provide a renewable carbon alternative to fossil fuel for Iron Dynamics, our proprietary ironmaking operations. We have successfully trialed Aymium’s biocarbon product in our steel operations, and conservatively estimate this first facility will reduce our Scope 1 steelmaking greenhouse gas emission intensity between 20 and 25 percent, with potential upside through the use of the facility’s biogas.”
Millett also mentions the company’s recently announced plans to add a 650,000-metric-ton recycled aluminum flat-roll mill and two supporting satellite recycled aluminum slab centers. The company will invest an estimated $2.2 billion in the three facilities, with commercial production planned to begin in the first quarter of 2025.
“Our recently announced planned investment in a new state-of-the-art low-carbon aluminum flat-rolled mill continues our strategic growth, is aligned with our core steelmaking and recycling platforms, benefits many of our existing customers and provides for future value creation. Our customers and our people are incredibly excited for this growth opportunity.”
Chemicals firm will work with London-based Mura Technology to create up to 600,000 metric tons of hydrothermal recycling capacity globally.
The Horgen, Switzerland, office of United States-based Dow has announced its intention to use its partnership with London-based Mura Technology to “construct multiple world-scale 120,000-metric-ton-capacity advanced recycling facilities in the U.S. and Europe.”
If the two companies follow through on the plan, it will create as much as 600,000 metric tons of annual nonmechanical recycling capacity, they say.
Mura says its hydrothermal recycling process, HydroPRS, “breaks down plastics using water in the form of supercritical steam (water at elevated pressure and temperature). The steam acts like molecular scissors, cutting longer-chain hydrocarbon bonds in plastics to produce the valuable chemicals and oils from which the plastic was originally made–in as little as 25 minutes.”
The process, according to Dow and Mura, can recycle difficult-to-sort items such as films, pots, tubs and trays. “The process is designed to work alongside conventional recycling and wider initiatives to reduce and reuse plastic such as mechanical recycling (where plastic waste is shredded and re-formed into different plastic products), which remains crucial to Dow’s recycling strategy,” the company says.
At the end of its process, Mura says, the oils produced are “equivalent to the original fossil products [and] are then used to produce new, virgin-grade plastic with no limit to the number of times the same material can be processed, creating a true circular economy for plastic [scrap].” Potential end markets include food-contact packaging, Dow says.
The global chemicals and polymers firm says it role in the partnership is as “a key off-taker of the circular feed that Mura produces.” The circular process “reduces reliance on fossil-based feedstocks and will enable Dow to produce a recycled plastic feedstock for the development of new, virgin-grade plastics which are in high demand from global brands,” Dow says.
The first plant using Mura’s HydroPRS process is being built in Teesside, United Kingdom, and is expected to be operational in 2023 with a 20,000 metric tons per year production line. The output will “supply Dow with a 100 percent recycled feedstock,” the companies say.
The extended partnership is set to considerably increase this supply, playing a significant role in Dow and Mura’s planned global rollout of as much as 600,000 metric tons of hydrothermal recycling capacity by 2030.
The planned capital investments by Mura, along with Dow’s off-take agreements, represent both companies’ largest commitment to date to advance and scale global non-mechanical recycling capabilities, the companies say.
“The strengthening of Dow and Mura’s partnership is another example of how Dow is working to build momentum around breakthrough advanced recycling technologies,” says Marc van den Biggelaar, advanced recycling director for Dow. “Dow is committed to accelerating a circular economy for plastics and our expanded partnership with Mura marks a significant step on this journey.”
CEO of Mura Technology Dr. Steve Mahon says, “Mura’s technology is designed to champion a global circular plastics economy, and our partnership with Dow is a key enabler to bringing HydroPRS to every corner of the globe. This next step in our partnership and the resources provided by Dow will allow us to finance and dramatically increase recycling capacity and enable circular plastics to enter global supply chains at scale.”
Dow says it remains on track with mechanical recycling-related projects and has announced two additional ones recently: an investment to build what it calls “the single largest single hybrid recycling site in France, managed by Valoregen, that will secure a source of postconsumer resins (PCR) for Dow” and a letter of intent with Atlanta-based Nexus Circular to create what it calls a circular ecosystem in Dallas for “previously non-recycled” plastic, which Dow says build on its previous Hefty EnergyBag collaboration with Nexus and Reynolds Consumer Products.”
Steel producer and scrap yard operator has netted $4.66 billion in the first half of 2022.
Charlotte, North Carolina-based steelmaker and scrap yard operator Nucor Corp. has announced what it calls record quarterly consolidated net earnings of $2.56 billion for this year’s second quarter. It follows earnings of $2.10 billion garnered in the first quarter of 2022.
In the first six months of 2022, Nucor has recorded net earnings of $4.66 billion, or $17.30 per diluted share. That compares with net earnings of $2.45 billion, or $8.13 per diluted share, in the first half of 2021.
“Nucor’s second-quarter earnings of $9.67 per diluted share and first-half earnings of $17.30 per diluted share both represent new records,” says Leon Topalian, Nucor president and CEO. “Nucor’s differentiated business model is yielding exceptional results.”
The scrap-fed electric arc furnace (EAF) steelmaker, which also owns the David J. Joseph (DJJ) scrap processing and trading firm, says its net sales increased 12 percent to $11.79 billion in the second quarter of 2022, representing a 34 percent increase compared with $8.79 billion in the second quarter of last year.
The average scrap and scrap substitute cost per gross ton of used in this year’s second quarter was $534, an 8 percent increase compared with $495 in the first quarter of 2022. The $534 figure also represents a 17 percent increase compared with one year ago, when the cost was $457 per ton.
The company’s Raw Materials business unit, which includes DJJ, earned $263.6 million for Nucor in the first half of this year. That is a 119 percent jump from the $120.1 million earned in the first half of 2021.
Overall operating rates at the company’s EAF steel mills increased to 85 percent in the second quarter of 2022, which compares with a 77 percent rate in the first quarter. In the first half of this year, Nucor’s mills have operated at 81 percent of capacity, which compares with a 96 percent rate in the first six months of 2021.
Nucor says demand remains “stable and resilient” for steel in its major markets and that “customer inventory levels appear right-sized relative to economic conditions.”
The company adds, however, “We expect a decrease from the record-setting second quarter, [but] we expect another strong quarter of profitability in the third quarter of 2022. We believe that 2022 will be the most profitable year in Nucor’s history.”
Nucor continues, “We expect the steel mills segment earnings to be sequentially lower in the third quarter of 2022 due to lower expected shipment volumes and average selling prices, particularly at our sheet and plate mills. Raw materials segment earnings are expected to improve in the third quarter of 2022 due to higher realized pricing at our direct reduced iron (DRI) facilities.”