Building momentum: the 2007 ISRI convention & exhibition brought attendees to New Orleans to build on the scrap industry's momentum.

Organizers of this year's annual convention of the Institute of Scrap Recycling Industries Inc. (ISRI) knew they faced a tough task to match last year's total of more than 4,200 attendees.

Although that goal was not met, nearly 3,700 scrap recyclers and their suppliers gathered in New Orleans April 18-21 for the exhibition and conference, according to Convention Chair Kendig Kneen of Aljon Inc., Ottumwa, Iowa.

Speaking to those gathered for the April 21 general session lunch (which featured comments from U.S. Army General Tommy Franks), Kneen thanked the gathered attendees for their participation in the convention's 50 workshops and sessions.

The attendees made the trek to New Orleans to check out equipment, to sit in on various sessions and to network.

ISRI Chair-Elect George Adams of Adams Steel, Anaheim, Calif., offered remarks on the 2007 convention theme, "Momentum."

After noting that markets and ISRI membership were up, Adams said, "Momentum is only advantageous if we guide it." He noted that while market momentum has helped create two well-attended events in a row, five years ago the ISRI gathering was much smaller and markets were much less kind. "We must acknowledge that we don't have control ... over the free supply-and-demand marketplace."

Adams also urged scrap recyclers to become more involved with and visible to their elected representatives. "Our government leaders need to better understand our business at the local level," he commented. "Let them see the capital investments that you have made."

Education sessions are an important component of ISRI's annual gatherings, and this year was no exception. Sessions offered information on everything from commodities markets to transportation issues to safety.

COPPER CONFOUNDS. In what appears to be a much-anticipated tradition of ISRI's annual conventions, an overflow crowd of attendees were on hand for the Commodity Spotlight on Copper.

The three speakers--Tim Strelitz of California Metal-X, Herb Black of American Iron & Metal and Keith Gwozdz, a metals trader at Man Financial--gave attendees a glimpse of what could be in store for the highly volatile commodity.

Michael Friedman of Scrap and Waste, Louisville, Ky., again served as moderator for the session.

Strelitz and Black reiterated that throughout the past several years, copper scrap markets have been swinging sharply as Chinese buyers have sent out mixed signals about whether they are coming into the market in a significant way. At the same time, all three speakers noted that commodity funds continued to play an active role in copper markets, resulting in climbing prices.

"I am very bullish on copper now," said Strelitz.

Black said, "Markets are going to keep climbing. My advice is, 'Don't go short in any of these markets.'"

Black added that as far as he sees it, the risk for scrap copper is on the upside.

Reflecting the growing role of commodity funds, Gwozds noted that the interest in base metals such as copper have growing significantly over the past seven years, and estimated that allocations in this sector have climbed by close to 500 percent since 2000.

Even with this tremendous growth, Gwozds added that this area still makes up a very small part of the overall investment world.

Adding to the more bullish sentiment in the market, there is expected to be a continued shortage of available copper through the test of the year, which should keep inventories low and demand in strong balance.

However, Gwozds said that new capacity should alleviate some of these problems in 2008, which could help push down prices.

"We are in the best of times," Black added.

The scrap industry has witnessed a number of changes during the years, and the rising profile of some materials is part of those changes. While copper is enjoying record markets, a more lowly material--steel tire wire--has also enjoyed a renaissance of sorts.

FROM FLUFF TO FEEDSTOCK.

Max Daughtry has witnessed the transformation first-hand.

Daughtry, a founder of tire recycler Four D Corp., Dutton, Okla., served as moderator of a session on steel tire wire recycling.

Before introducing three panelists, Daughtry recounted how in the 1990s and early this decade, Four D's tire wire would alternate between being rejected by scrap yards or being accepted by processors or mills for a very low price. Much of it was landfilled, he recalled, with the wire containing as much as 25 percent rubber content at that time.

But with the addition of better processing equipment and a red hot ferrous scrap market, Four D now receives a healthy per-ton amount for its wire. "That makes a huge difference to your bottom line," he told attendees.

One of the people helping tire recyclers make such transformations has been Mark Bielicki of Bi-Metal Corp., Ridgefield, Conn. The company helps tire recyclers set up systems to upgrade the purity of their tire wire. "Here was a product that was being landfilled due to contamination [that is] now viewed as an effective feedstock for steel mills."

Bielicki noted that the grade now has its own ISRI specification (calling for less than 2 percent contamination) and remarked that scrap yard and mill buyers "will respect an investment [that] provides a high-productivity feedstock."

Mark Ridall of Wendt Corp., Tonawanda, N.Y., alerted panelists to the availability of small balers and briquetters that can allow them to condense their tire wire into a stackable, shippable form that can help them maximize their shipping loads and avoid contamination caused by ground contact of loose materials.

From the consumer side, James Dutton of Sand Springs Metal Processing Corp., Sand Springs, Okla., offered views on how his mill services company has incorporated tire wire into electric are furnace melts.

He said Sand Springs uses "six different recipes" to charge its furnace, with some 100 truckloads of scrap each day bringing in material to make sure the right ingredients are on hand.

When tire wire contains too much rubber, it can cause problems, including generating too much heat and smoke, Dutton noted.

But if the wire is clean enough (well under 5 percent rubber, according to Dutton), it makes a material that, much like steel turnings, can help fill voids in the charge to create a nice, dense charge bucket.

Dutton said his company will work with new suppliers if they first send FedEx samples and also allow him to conduct an on-site visit to see their processing methods.

From the viewpoint of tire recyclers, Daughtry summed up the good news by saying that in the past several years he has seen tire wire sell anywhere from $30 to $160 per ton, depending on the overall ferrous market--"for something that used to be a liability and cost us money."

A PROSPEROUS JOURNEY. Both the scrap industry and the freight rail industry are enjoying healthy global markets. But along with the prosperity has come the headache of finding enough rail cars to keep scrap moving via rail.

The availability of gondola cars was again a topic of conversation at the session. "When you talk about availability, factors include geographic flows and patterns," said Dennis Wilmot, a logistics services provider with WT&L Corp., Aurora, Ohio. Some places have a more pronounced gondola car deficits than others, Wilmot remarked. He cited the North as a region that is typically short of cars.

Representing the railroads, Brenda Wheeler of CSX Transportation, Jacksonville, Fla., said the gondola car supply situation is "a continuing battle."

Moderator Greg Dixon of Baker Iron & Metal Co., Lexington, Ky., expressed concern that the average annual age of gondola cars (25 years) could work against any efforts to reinforce the fleet.

Solutions mentioned included allowing old gondola cars to stay in service for 60 years, rather than the current 50-year limit imposed by regulatory authorities. CSX's Wheeler also said that her company is re-investing in cars, both by refurbishing old cars and ordering new ones.

Some scrap companies are gaining more control over the situation by ordering their own private fleets of gondola cars. Wheeler said the ownership of private fleets has become custom in many other industries, with scrap gondola cars being among the last segments with majority ownership in the hands of railroads.

Beyond needing more cars, the overall freight rail network may also need more track miles to serve a nation where goods and commodities are taking longer journeys from production to market. "The capacity right now of the rail system is very constrained," said Wilmot. "It does not allow much room for growth."

A second session addressed truck transportation.

ON THE ROAD. Today's scrap recyclers face a different transportation industry than they did even a few years ago, said Robert Winnick of KTI Inc., a Minneapolis-based third party logistics company, who spoke at a session about truck transportation.

Several trends have changed the face of truck transportation, Winnick said. "Rates are not as adjustable as they were in the past," he said, adding that trucks dictate the rates will be.

Furthermore, Winnick said anyone who ships by truck is going to have to get used to fuel surcharges. "The fuel surcharge is here to stay."

Winnick also said the industry is facing a driver shortage, with some 30 percent of drivers retiring in the next decade. In addition, scrap recyclers and others who want to ship via truck are also left with fewer and fewer carriers to choose from as increasing fuel and operating costs drive smaller companies out of the business.

However, Winnick said recyclers can take some control and offered some advice on navigating truck transportation. He said recyclers would be wise to pay attention to published weekly on-highway retail diesel prices. If a recycler sees the price go down, he might be able to negotiate the fuel surcharge. "Carriers won't offer to lower their surcharge. You have to bring it up."

The ISRI 2008 Convention & Exhibition will be April 6-10 at the Mandalay Bay resort in Las Vegas.

by recycling today staff

The staff of Recycling Today contributed to this feature.

PUTTING SAFETY FIRST

With 43.8 on-the-job fatalities per 100,000 workers in 2005, the scrap recycling industry is the fifth deadliest industry in America, according to John Gilstrap, ISRI's director of safety. Gilstrap addressed attendees of a session called "Safety for the CEO," at the association's 2007 Convention & Exhibition, held recently in New Orleans.

With this sobering statistic in mind, Gilstrap said management level employees must step up to see that safety procedures are implemented and followed This involves more than just putting procedures in writing and holding the occasional meeting to review policy. Gilstrap said the key to a safe operation is elevating safety to the same level as profitability in a company's goals--to "de things safely, or net at all," Gilstrap said

One area where many companies fail is taking a proactive approach to safety, Gilstrap said. "Every accident represents 1,000 near-accidents." Instead of treating near-accidents like the real thing, Gilstrap said the tendency is more to feel relief at a close call instead of investigating why it happened and fixing the problem. "Manage near-accidents as accidents," Gilstrap advised. "Don't wait for the body to fall or the body part to be injured."

Gilstrap also advised managers to get their employees involved in the safety process. He said managers should get input from workers on how to fix problems that can lead to an unsafe work environment. "Then it's no longer you telling workers what to do," he said.