The red metals sector has numerous factors to consider when valuing copper’s medium-term worth.
For every factor weighing down the current price of copper, producers, users and traders of red metal have several others to consider that could quickly cause demand for the metal to rebound in the post-COVID-19 economy.
With the slowdown of the world’s largest economies first in Asia, followed by Europe and North America, speculators have made clear in March where they stand on copper. The price of the red metal on global exchanges has trended sharply downward in March.
The short-term reasons for copper’s price plunge are apparent: global supply largely held steady while demand plummeted first in China and then other parts of the world as the COVID-19 coronavirus caused workplaces to shutter—and household consumer spending to hit the pause button.
Economists have subsequently tried to imagine both when and how these same economies will recover once public health officials begin giving the green light to (what will likely be) phased-in returns to economic activity around the world.
As COVID-19 was just beginning to affect the United States economy on March 11, Ed Sullivan of the Portland Cement Association in that nation gave a prediction that a fairly rapid (or V-shaped) recovery was possible in the U.S., based on pent-up consumer demand after stay-at-home orders are rescinded.
That scenario is far from guaranteed, with the elements of such a recovery involving not only the return of positive household consumer sentiment, but also the ability and willingness of governments around the world to inject money into infrastructure and other public works projects.
Governments in China, the United Kingdom, the U.S. and elsewhere have passed stimulus plans that promise big spending on paper, but how much of that will go into the basic materials and red metals sectors is unclear.
A survey of more than 13,000 global respondents in the engineering, construction, finance, public works and technology sectors found little optimism that infrastructure spending would boom in the wake of COVID-19.
The survey by Washington-based CG/LA Infrastructure found only 5 percent of those responding predict investment will “increase significantly” following the pandemic. That marks a sharp decline from 34 percent who expressed optimism for the second half of 2020 before the health crisis.
Prior to the crisis only 10 percent of respondents thought infrastructure investment would decrease (7 percent), or decrease significantly (3 percent) in the remainder of 2020, but now 52 percent believe such spending will decline (34 percent) or even decline significantly (18 percent).
As household consumers have been hit with “shelter in place” orders in Europe, North America and other parts of the world, many of them also are faced with reduced or lost income.
Among the foremost victims of the shriveled household consumer economy has been the automotive sector. Passenger vehicle sales in Europe and North America seem destined to follow the pattern set in China, where entire weeks or even months can be “lost” to impacts of COVID-19.
Another victim has been the price of oil, which has fallen to a low not seen since the 2008-2009 financial crisis. That could draw momentum away from electric vehicles (EVs), which had begun to capture growing market share heading into the epidemic. EVs use significant amounts of copper and also require a charging infrastructure partially depending on copper cables and wires.
Government incentives and mandates in many parts of the world could nonetheless revive the EV segment once drivers are again ready to seek new vehicles in the aftermath of COVID-19.
Testing that seems to indicate copper and brass have anti-microbial (or germ-busting) capabilities may open new doors for red metals. Several studies claim to have witnessed copper’s ability to provide an inhospitable surface to germs and viruses, which could allow it to play a larger role in hospital, food service and agribusiness applications.
EVs and germ-busting notwithstanding, it will likely take an overall economic rebound before copper demand can begin to catch up with reported inventory buildups of the red metal.
Writing on March 29 in a note accompanying his United States-based “Copper Journal” e-mailed publication, John Gross says copper’s exchange pricing in that nation has “has held the $2.00 [per pound] low for a second week.”
Concludes Gross, “We know that ‘hope isn’t a very good trading strategy,’ but with fingers crossed, hopefully, we have seen the low. Don’t take that as a forecast, but rather [as] a bit of wishful thinking in these turbulent times.”
The next summit is to be co-located with NPE2021: The Plastics Show in May 2021.
The Plastics Industry Association (Plastics) has announced that the 2020 Re|focus Sustainability & Recycling Summit, originally scheduled for May 18-20 in Cincinnati, will be canceled due to the travel bans and guidelines that are in place for the COVID-19 pandemic.
The Re|focus Sustainability & Recycling Summit offers leaders across the plastics supply chain to come together to discover new ways to use recycled plastics and push sustainability in manufacturing forward. According to Plastics, some aspects of the Re|focus Sustainability & Recycling Summit will be moved to virtual platforms for attendees and exhibitors. The next in-person Re|focus will be in conjunction with NPE2021: The Plastics Show, which will take place May 17-21, 2021, in Orlando, Florida. The next standalone Re|focus event will take place in Cincinnati from May 23-25, 2022.
“The entire Plastics staff has been monitoring the situation with the COVID-19 pandemic and our primary concern is for the attendees, speakers and staff to remain healthy and safe during this time,” says Plastics Director of Sustainability Ashley Hood-Morley. “We are eager to offer our attendees opportunities to learn more about the sustainability initiatives at the forefront of our industry through our virtual events and look forward to hosting everyone during NPE2021: The Plastics Show.”
According to Plastics, the dates and information for the Re|focus Sustainability & Recycling Summit virtual events will be announced soon.
Company says its X-Tract line can add value to shredded aluminum scrap grades.
Europe-based Tomra Sorting Recycling says the X-ray transmission (XRT) technology in its X-Tract and X-Tract X6 Fines units has been deployed to efficiently separate aluminum and aluminum alloys from other metals and can deliver “consistent quality for the resulting raw materials and products.”
“Aluminum is a light metal with a bright future, and its production is tending to increase, as the material largely replaces steel in many applications thanks to its strength and low weight,” says Brian Gist, sales director-metals at Tomra Sorting Recycling.
Adds Gist about aluminum’s future value, “A clear example is the automotive sector, and even more so in electric cars, where weight reduction is crucial. Therefore, when using recycled material, quality control is essential. This process starts with the scrap aluminum recyclers, as they supply raw materials to the aluminum producers. However, the latter must verify that the materials they have purchased meet the respective quality requirements. Both recyclers and producers must, therefore, be involved in the improvements in the classification of materials.”
Tomra says its XRT technology can optimize melt shop outcomes for aluminum producers who use shredded aluminum scrap consisting of several alloys and heavy metals, including copper, zinc, iron, magnesium and silicon.
“Prior to the melting process of secondary aluminum, our XRT technology separates the heavy metals from aluminum alloys containing more than 2 percent heavy metals before they enter the furnace,” says Gist. “Each aluminum alloy contains a certain percentage of other metals, which must be constantly controlled to ensure that the chemical composition of the product meets the required specifications. In this way, aluminum producers control the quality level before the material enters the furnace, and [thus] avoid the loss of castings due to heavy metal peaks exceeding the maximum allowable content of these elements. Tomra’s technology becomes a second control barrier after the materials have been processed by the recyclers.”
Secondary aluminum production using scrap has a fundamental positive role in the recycling economy, says Gist. It increases recovery rates and delivers a high-quality end product with a lower carbon footprint, since it requires lower energy and raw material costs compared to the primary aluminum smelting process. The latter uses bauxite ore as a raw material and requires high energy consumption and complicated physico-chemical processes, he adds.
Tomra says its XRT technology may well be deployed by refiners and remelters if their scrap suppliers do not invest in it. Using the sorting technology can potentially reduce the cost of the scrap they buy, since the materials do not need to have an excessively strict composition, says the company.
If remelters have XRT sorting capabilities, they can buy scrap at a lower price and at a lower quality that can be subsequently cleaned by X-Tract technology. “Secondary smelters who are particularly interested in separating scrap to pure fractions now have the possibility of buying raw materials at a lower price and sort it with Tomra’s XRT technology to achieve the desired quality level—a very favorable option,” states Gist.
In addition to upgrading aluminum scrap, processors or remelters can produce new fractions via X-Tract, such as by separating the crankcase from the profile.
“We believe the trend today is for aluminum producers to continue to develop their processes for separating raw materials,” says Gist. “It has even partially replaced the work of the recyclers in terms of material differentiation, creating new qualities that are always adapted to their needs.”
Not using a technology such as the XRT from Tomra involves several risks if the material does not meet the required specifications in terms of composition and product size, according to the company.
The final product may not achieve the desired properties, and then to compensate for this quality deviation other types of materials must be added during the refining process, says Tomra. Using these additives can result in higher costs per ton of the final product.
Tomra says its X-Tract unit enables sorting by recovering ready-to-melt aluminum fractions with a purity of 98-to-99 percent. It enables substances to be separated according to their atomic density, regardless of their color and surface impurities, says the company.
The Tomra X-Tract X6 Fines unit has been designed to identify and classify particle sizes between .02 and 1.5 inches (5 to 40 millimeters), almost half the size of those that could previously be processed, says the firm. In addition, the heavy metals separated with this device can be further separated by the Tomra Combisense Belt system by color, brightness and shape, says the technology firm.
The operating costs of sensor-based dry sorting systems are significantly lower compared to a system with dense media that uses water and additives, says Tomra. Additionally, dry sorting makes the need for water treatment obsolete.
“In short, these flexible devices (easy, fast and simple sorting program changes from the control panel) with agile operation (on-off without waiting time) are ideal to meet the new challenges and needs of the market,” says Gist. “In addition, they allow control of the percentage of heavy metals entering the melting process. In this way, they control the final quality of the product and therefore avoid exceeding the permitted limits of these heavy metals, which, if not controlled, could cause ‘non-conformity’ of the casting, with great economic consequences,” he concludes.
Both in Europe and North America, scrap consumers are increasingly facing the challenge of producing pure aluminum end products that are free of not only heavy metals but also of light fractions, such as magnesium, according to Tomra.
“Magnesium makes up between 1 percent and 4 percent of typical [shredded] scrap aluminum fractions, and is regarded as an unwanted contaminant in the scrap mix, which in the end makes it difficult for recyclers to sell,” says Frank van de Winkel, Tomra’s business development manager-metal. “Especially in the U.S., secondary aluminum smelters require zorba to be magnesium free in order to better sell it within domestic markets,” he adds.
Continues Van de Winkel, “Due to magnesium and aluminum being similar in density, technologies have difficulties in clearly differentiating between these materials in order to separate them. To this end, removing magnesium from aluminum scrap is still a challenge that requires advanced technology.”
The facility would serve Colorado’s Western Slope.
Nonprofit research institute Sustainable Development Strategies Group (SDSG ), Gunnison, Colorado, is seeking support to conduct a feasibility study for a plastics processing and manufacturing facility in Colorado’s Western Slope region. The facility would buy recovered plastics from local recycling programs across the Western Slope.
The study design includes discussing the state of the plastics market with people working in the plastics industry, reviewing waste publications and meeting with regional economic development offices. Economic development officers agree it would be a great loss not to salvage rural recycling programs and the latent value of these materials, SDSG says.
Elyse Ackerman-Casselberry, community and economic development director for Colorado’s Delta County, says, “Although recycling has always been a struggle in our area, people are motivated to recycle, and there is a lot of potential for these materials. We have discussed the issue in depth with commissioners and in a working group and would like to hear more from prospective entrepreneurs and industry.”
Certain communities on the Western Slope have been designated as Opportunity Zones. This qualifies enterprises locating there for certain kinds of federal tax incentives. Some of these Opportunity Zones are in need of more industrial traffic on their rail lines to justify the line maintenance. Delta County features Opportunity Zones and is on a rail line.
SDSG says the confluence of these economically transitioning communities that are in need of employment and with recycling programs that are increasingly challenged economically with emerging plastics technologies creates the space for a plastics manufacturer seeking an opportune location.
The Eco-Cycle and Colorado Public Interest Research Group Foundation’s 2019 report, “The State of Recycling in Colorado,” highlights the need for more local markets for remanufacturing to make recycling in Colorado environmentally and economically efficient. This report explains how recycling businesses are poised for growth in Colorado with support from NextCycle, a business incubator designed to “improve the end markets for recovered commodities and organic materials in Colorado,” and the Recycling Resources Economic Opportunity grants program from the Colorado Department of Public Health and Environment. These programs are outgrowths of Colorado’s solid waste diversion goals and the work of the state legislature’s Zero Waste Interim Committee.
Michelle Haynes, executive director for Region 10, a community development nonprofit located on the Western Slope, says, “Region 10 has heard from several of our communities regarding the challenges for recycling, particularly related to transportation. A regional facility would provide the means to improve recycling programs as well as create additional jobs and economic impact for the region.”
Spurred to foster economic development in recycling, different communities in Colorado are making headway on convenient curbside recycling, minimizing contamination and passing legislation for increased tipping fees for Front Range communities. The Front Range is more urban, much of it neighboring Denver, where remanufacturing industries make their homes in Colorado. However, the Western Slope, with a capable workforce, viable tax incentives and receptive local governments is fertile ground for the advent of a new plastics processing and remanufacturing enterprise, SDSG says.
How the waste management industry has reacted to the COVID-19 pandemic in the U.S.
The first case of the COVID-19 virus in the U.S. was diagnosed on Jan. 20. By March 26, the United States became the epicenter of the pandemic as domestic cases surpassed those in China and Italy for the first time. In the process, the steady uptick of domestic infections set in motion the nationwide closure of countless businesses and schools, cancelation of travel, and shelter in place orders.
As life has abruptly been put on hold for many Americans, waste and environmental services professionals have been called on to help deal with shifting solid waste collection demands, suddenly unpredictable volumes and the emergency need for decontamination services.
Selin Hoboy, vice president of government affairs and compliance at Bannockburn, Illinois-based Stericycle, says that the virus has altered the makeup of its incoming medical waste stream. Although the company is seeing some higher volumes from hospitals combating the disease, the delay in elective procedures and enforcement of stay-and-home ordinances has helped balance out the overall demand.
“We’re seeing some increase in medical waste produced due to heightened use of personal protective equipment (PPE) in diagnosing and treating COVID-19 patients, and some non-traditional waste is also sometimes being managed as regulated medical waste,” Hoboy says. “However, increases in waste from COVID-19 may be offset by continued declines of elective surgeries or temporary closures of smaller healthcare practices. The impact of the pandemic is changing day to day and hour to hour, and we are closely monitoring the situation with federal, state and local agencies to determine next steps.”
Hoboy says that medical waste from COVID-19 patients and workers is managed as Category B waste. This means that once it is discarded, it is to be treated as normal regulated medical waste that is subject to the same treatment and disposal guidelines as most other potentially infectious medical waste.
Although the waste is treated the same and rendered innocuous through standard medical waste treatment methods, Hoboy says that the company has changed its protocols for hospital waste collections to minimize the risk of workers coming into contact with patients who are potentially infected.
“We have updated protocols and procedures for in-hospital services. For example, Stericycle service technicians will not be entering any patient isolation rooms regardless of isolation room signage, and technicians will be checking in at nurses’ stations to ask about any rooms they should not be entering,” Hoboy says. “Additionally, our team members are authorized to deny pickup of non-conforming waste from our customers who are not following our waste acceptance protocols or packaging guidelines.”
Hoboy says because of the rapidly changing nature of the virus, forecasting labor requirements is challenging, but that the company is able to add additional shifts for its workers and expand capacity if necessary.
Bob Cappadona, president and COO of Boston-based Veolia North America, says that the demand for the company’s services relative to COVID-19 has varied depending on the client.
“The core of our work [relating to COVID-19] has been at organizations that are involved in research,” he says. “A very significant group of customers for us is the pharmaceutical and biotechnology sector … and in some cases, we’re working at some of the key companies that are doing COVID-19 research. [And these customers] are looking for additional manpower support from us. They’re extremely busy with the research work that they’re doing in pursuit of therapies and cures. So, as we’ve reached out to our customers, they’ve wanted assurances that we’re going to be there for them, and we’ve signed a lot of emergency response-type agreements and support agreements for these companies.”
Conversely, due to the number of businesses being suddenly shut down across the country, Cappadona says some of Veolia’s smaller medical service clients have seen volumes decline.
“If you’re looking at the total spectrum of those who generate waste and ship it to us, half of them are very busy and half of them are closed. Many of the medical waste customers that ship into our facilities will be a family physician, a dentist or various types of clinics. And many of these facilities have closed or slowed considerably, so our level of activity with this group may be down. And then in some of the larger facilities, we may see slight volume increases, but at this point we haven’t seen anything dramatic,” Cappadona says.
As evidenced by the increased demand for cleaning products and the shortage of available hand sanitizers at retailers from coast to coast, sanitation and decontamination are top of mind for many Americans. This is especially true for locations and businesses that have, or suspect to have, come into contact with those carrying the virus.
Currently, Cappadona says Veolia is providing industrial decontamination services mostly for its core clients, but is able to heed the call to serve a larger demographic through its nationwide emergency response group should the need arise.
US Ecology CEO Jeff Feeler says that his company has seen a 500 percent increase in demand for its decontamination services over the latter half of March due to COVID-19 concerns.
“We are currently providing decontamination services for a wide variety of public and private sector customers across the U.S., including retailers and pharmacies, cruise lines, airlines, schools, large industry, building services companies, government agencies and utilities,” Feeler says. “This service includes decontamination of sites that have had direct or potential exposure to the virus, or proactive preventative cleaning of high-traffic areas or frequently touched surfaces.”
Feeler says the Boise, Idaho-based company’s decontamination and preventative cleaning services include: wipe downs of horizontal surfaces and high-traffic/touchpoint areas; the use of portable fogger machines filled with decontamination solution for smaller areas; the use of a portable hydrogen peroxide disinfectant system for larger areas; and proper consolidation, transportation and disposal of all waste including used PPE.
While Feeler says the company’s estimated response times vary depending on several factors including volume of incoming calls, the company’s average response from receipt of initial calls to personnel arriving on-site has historically averaged from two to three hours. Even as demand increases along with the number of COVID-19 cases, Feeler says his team is prepared to meet the demand for its services.
“As the virus continues to spread and more businesses are facing the realities of long-term operational restrictions from local, state and federal regulators, they realize they must have a plan in place to safely resume day-to-day operations. … Our operations are staffed and equipped to handle multiple large-scale responses simultaneously. We have provided response services for nearly every major natural disaster and viral outbreak over the last two decades and are doing the same for COVID-19,” Feeler says.
Waste management companies both big and small are working to adjust to shifting customer needs. If they haven’t experienced it already, many are anticipating the potential for significant shakeups in the form of increased residential waste volumes as more Americans are forced to stay in and work from home, a drop off in commercial and C&D volume amid massive businesses closures, and changes in medical waste volumes.
Stifel, St. Louis, released an industry update March 22 titled, “Solid Waste: Revising Models for C-19, Volume Down, Price Durable, Deal Flow Slows, FCF Stands Out.” In the update, the investment banking firm outlines the projected impact of the COVID-19 pandemic on solid waste industry participants.
“What public/private company avoids any sales pressure due to COVID-19? None,” the report states. “We believe the impact on solid waste will look like both 9/11 and the Great Recession. The former was a shock-and-awe [event], the consumer paused. The latter, the U.S./North American economies were over-levered, which it is not now, but wholesale business shutdowns had a volume impact. Today, solid waste has more control of cost/capital than ever before. Social distancing and big urban settings forcing closure of food, beverage, hospitality and entertainment leads to a big drop in collected volume and commercial customers asking for service on-hold/cancellations. We assume an annual 15 percent hit to volume of 10 percent for third-party commercial, C&D and special waste volume and 5 percent direct commercial collection sales cut in half for two months. Residential volumes will be up, and in many cases, contracts allow for charging for extra bin/bag pickups.”
A Republic Services spokesperson corroborated Stifel’s projections on anticipated escalations in residential volumes, stating that the Phoenix-based company is preparing for residential waste volumes to increase and is suspending bulk and yard waste pickup in some communities to be better prepared to service customers.
Janette Micelli, director of external affairs at Waste Management, says the Houston-based company has tried to take a proactive approach to adapt to changes in commercial volume.
“Customer needs are changing by the day—we’re all working diligently to right-size customers based on current volumes and provide them with the solutions they need to run their businesses,” Micelli says. “We are helping [some of] our customers reduce service appropriately, but also rapidly increase service for grocery stores, residential buildings and healthcare facilities. There’s no one-size-fits-all approach, so we are laser focused on meeting these evolving needs. … Our neighborhoods and businesses rely on us. Ultimately, our goal is to partner with our customers and do our part to provide some relief and help minimize the impact of the pandemic on their communities and businesses.”
While construction and demolition contractors have remained active in many parts of the country, slowdowns are expected to constrain C&D volumes in some areas, with some recyclers having already reported decreases in incoming volumes.
Despite the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO) not calling for any additional steps in handling MSW or recycling during the outbreak, some municipalities and haulers have altered their services in accordance with the spread of the virus.
There have been numerous reports of suspended curbside and drop-off recycling programs for both safety and demand reasons. Some MRFs have also temporarily halted operations due to safety concerns.
Micelli says that Waste Management has used the emergence of the virus as an opportunity to remind its workers of safety best practices.
“We instruct all employees handling any waste or recycling to follow our safety procedures, including wearing proper gloves and eye protection,” she says. “We’ve also created new procedures at our facilities to ensure social distancing and the elimination of group meetings. Employees not required to be on-site are working from home. As leaders in our highly regulated industry, we follow strict policies and procedures every day when managing solid waste, including medical waste, to protect our employees, our customers and the communities we serve.”
Similarly, Cappadona says that while little has changed in how its workers manage waste, the company has reemphasized its established safety protocols with staff to make sure workers are observing proper due diligence on the job.
“You assume that you need to protect yourself from [the virus]. So, that means not opening containers; ensuring that you’ve got appropriate PPE on whether that’s gloves, coveralls or respirators; and observing other general practices that we have in place. … We do an awful lot of total waste management programs where we go to a customer and we manage their medical waste, hazardous waste, radioactive waste, etc., which means our employees need to have hazard awareness. And with hazard awareness comes universal precautions of just making sure that you’re doing what’s called a mental safety assessment, which is where two or three seconds before you do something, you assess what the potential risks are and ensure that you have all the protections in place to manage that risk.”
As you often see in times of crisis, the rise of COVID-19 cases in the U.S. hasn’t just brought challenges, it’s helped shine a light on those doing good within their companies and communities.
Waste Management CEO Jim Fish told the Wall Street Journal on March 22 that it would continue to pay workers for a 40-hour week regardless of whether services were cut or suspended, Republic Services says it is working to support local restaurants and thank its employees by providing meals to workers and their families from local establishments, and several companies such as Veolia are donating surgical masks to hospital workers in need.
Waste management and environmental services professionals don’t often get rewarded or recognized for the essential services they provide, but helping life go on as normal as possible for the communities in which they operate is something that merits attention. And even though the future might be clouded in uncertainty, organizations are working to maintain the status quo by showing up and coming together.
“This is something I don’t think any of us ever could have imagined,” Cappadona says. “So, [at Veolia] we’re trying to ensure that we’re helping people through the process of understanding what’s occurring and also providing a service that helps our customers as we all manage through this crisis together.”
The author is the editor of Waste Today and can be contacted at aredling@gie.net.