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Cleaning up: aluminum scrap consumers may need to explore ways to use lower grades of scrap.

In North America, Hydro Aluminum NA is one of several aluminum producers competing for aluminum scrap. The company has been focusing research and technology efforts on ways to use additional scrap grades--such as forms of obsolete aluminum scrap---in the production of higher-end finished aluminum products.

"Our challenge as an industry is to dig deeper into the scrap supply and use it effectively," the company's Lynn Brown told attendees of the Aluminum Roundtable at the 2004 ISRI Commodity Forum, held in September in Chicago.

When industrial production slumped in the United States in 2001 and 2002, aluminum scrap consumers began counting on auto shredder scrap and demolition scrap as two sources to replace the lack of plant stampings and trimmings.

Purifying and using aluminum scrap from the obsolete stream could be an important new challenge for scrap processors and consumers if the volume of clean scrap trimmings remains restricted.

THE SQUEEZE IS ON. Among the most desirable grades of scrap sought by some consumers are prompt grades produced during the extrusion process. Brown says that, fundamentally, "What everyone would like to have for remelt operations is clean process scrap from extrusion plants."

Brown says of such factory-generated grades of scrap: "They are nicely segregated by alloys, clean, easy to handle, and the logistics of collecting and processing them are fairly easy."

On the plus side, extrusion is a process that, relative to some other forms of metalworking, generates a lot of scrap. Brown estimates extruders generate anywhere from 18 percent to 28 percent scrap at their presses.

This generation occurs as heated billets are pushed through shaping dies and then as the extruded shapes are clamped to be stretched. The shape of the extrusion is ruined at the clamped ends, so these ends are trimmed and scrapped. "The nature of the operation is such that even our best operations probably only use 82 percent of the metal," notes Brown.

But even this steady production of extrusion scrap goes only a short way toward providing scrap needed as feedstock by remelt furnace operators. Brown says that if a remelt operator wants to produce new billets for one of ifs extrusion customers, that same customer's scrap produces only about one-third of the scrap material needed.

"If you want to produce a billet that is 75 percent scrap and 25 percent primary aluminum, but you only get one-quarter of the prior billet back, you have to fill that gap," says Brown.

PROBLEMS TO BE SOLVED. The need for a large volume of scrap to feed a scrap-dependent production process is not unique to aluminum remelters. Steel mills using the electric arc furnace (EAF) method have long had to explore how to use a broad range of ferrous scrap grades in their processes.

The development of auto shredding plants and their downstream separating systems have gone a long way toward filling the ferrous scrap demand of EAF steelmakers by digging into the obsolete scrap stream.

Shredding plants produce grades of aluminum scrap as well, but most remelt operators are not able to use the mixed-alloy "twitch" grade produced through this process.

Several barriers restrict the grades remelt operators can use:

* Molten aluminum is much more volatile than molten steel, so some contaminants do more than spoil the chemistry. Some are categorized as "volatiles," meaning they can cause explosions at the remelt plant.

* Emissions at remelt shops are being closely monitored with the enactment of the maximum achievable control technology (MACT) requirements is sued and revised by the U.S. EPA earlier this decade. The presence of paint on scrap can be a particular dilemma from this respect.

* Even if volatiles can be avoided and emissions standards met, it is still important to meet narrow chemistry specifications to produce the precise alloy demanded by customers.

CAPITAL IDEAS. If remelt operators wish to broaden their scrap range, they are thus faced with several investment and spending scenarios.

They may well need to upgrade inspection procedures to scrutinize scrap shipments carefully for volatile substances. They will likely have to invest in emissions control systems that will allow them to melt painted scrap grades. And they will almost certainly have to broaden their scrap purchasing methods to reach new sources of scrap.

Hydro Aluminum's Lynn Brown says this is exactly what his company is doing, and, in particular, the firm has designed its newest melting facility to address these challenges.

The company's Commerce, Texas, smelter opened in 2002 and has been designed to accommodate a wider variety of scrap than many previous smelters that produce the same alloys.

The $37 million facility produces 90,000 metric tons annually of extrusion-grade billet using what the company calls on its Web site "accessible post-consumed scrap" as an "economical raw material."

Hydro says its "fully integrated fumes treatment system [is] used to remelt aluminum with organic coatings/contents such as paint, oil [and] grease."

Additionally, the plant has been designed with added scrap storage and sorting space, so more custom scrap blends can be configured on site.

If extrusion-grade billet makers such as Hydro are successful in using additional scrap grades in their processes, the industry's next challenge will be to keep finding end markets for aluminum extrusions and shapes.

Both the Aluminum Association, Washington, and the Aluminum Extruders Council (AEC), Waucanda, Ill., have been focusing attention on this by holding design competitions and honoring companies that find innovative new markets for extruded aluminum products.

Among some applications cited recently by the Aluminum Association have been the scaffolding used during the restoration of the Statue of Liberty; the roof of the Mid-town Community Center in Newport News, Va.; and the aluminum automotive chassis of the 2005 Ford GT sports car, which was supplied by Hydro Aluminum.

Attention paid both to using recycled feedstock efficiently and cultivating new end markets will probably be needed for aluminum producers to continue to compete effectively with makers of steel, plastic and other materials in the always competitive basic materials market.

As one example, aluminum producers can try to grow the market for metal building panels and siding, which compete with masonry and vinyl products.

"New end markets is an agenda item that both the Aluminum Association and the AEC are starting to address," says Brown. He says that aluminum producers are sponsoring a major presentation at the National Manufacturing Week exposition in Chicago in March. "There is a real motivation to get out there and demonstrate the range of applications for aluminum extrusions," he says.


Triple M Metal has broken ground on an aluminum remelt plant in Brampton, Ontario. The name of the facility will be Matalco Inc.

Triple M will be the majority stakeholder of the plant, and Leon Kozierok, president of Matalco, will hold a minority stake in the operation.

The plant will be 110,000 square feet and is expected to cost around CAN $65 million. It will be built on 14 acres. The plant will produce billets from scrap aluminum to be sold to extruders throughout North America.

"We are thrilled to have Leon Kozierok lead this venture," Mike Giampaolo, Triple M's founder and chairman, says. "He brings vast industry expertise, incredible business acumen and tremendous vision to Matalco. Leon has assembled one of the most talented teams of industry experts to design and run Matalco. We are pleased to have Leon as CEO to help us build such an important and industry-leading aluminum remelt plant."


Even though China has not absorbed aluminum scrap to the extent that it has steel and copper scrap, overall global demands are still putting aluminum scrap in short supply.

Parks Dodd, an aluminum industry analyst with Aluminomics LLC, Atlanta, told ISRI Commodity Forum attendees last fall that, globally, there was a supply deficit of aluminum in the second quarter of 2004, and that such a situation may continue through the second quarter of 2005.

This deficit could include a significant "scrap gap" during this period, with China experiencing such a gap through 2008, Dodd said.

Laws of supply and demand should dictate a rise in aluminum scrap prices during this period, but Dodd also noted that previous gaps have been covered by the emergence of scrap from Eastern Europe or a ramping up of primary aluminum production.

Dodd's study of price conditions shows "no persistent relationship between scrap supply and price," he said, perhaps in part because "market power is weighted toward producers and semi-fabricators."

This could explain why in the midst of steel and copper scrap price booms, aluminum scrap has been a relative laggard.

The author is editor of Recycling Today and can be contacted at
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Comment:Cleaning up: aluminum scrap consumers may need to explore ways to use lower grades of scrap.
Author:Taylor, Brian
Publication:Recycling Today
Geographic Code:100NA
Date:Jan 1, 2005
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