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Trading places: while some of Canada's scrap consumers struggle, recyclers shift to serving export markets.

Despite the Canadian equivalent of Chapter 11 claiming a couple of companies, and steelmaker Stelco considering selling off some of its assets, 2003 was a good, solid year for the Canadian metal recycling industry, says Len Shaw, executive director of CARl (Canadian Association of Recycling Industries). He adds that the projections for 2004 indicate that market conditions will continue to be good.

"Last year, there was a good flushing out of companies that weren't doing so well," notes Rick Sobottka, vice-president of corporate development for Triple M Metals, the largest metals recycling company in Ontario. "The industry is much healthier as a result, and I expect everyone will have a much healthier balance sheet this year."

METAL MADNESS. Triple M has plants in Brampton, Ontario, the Maritime provinces and Winston-Salem, N.C., and trading offices in Montreal and New Jersey. Sobottka reports that Triple M recently purchased a couple of new locations in Hamilton, Ontario, and expects to add some more yards this year.

Sobottka observes that scrap prices were at historic highs in February and March. Rob Sinclair, environmental specialist, recycling, for National Resources Canada, Minerals and Metals Section's International and Domestic Market Policies Group, reports that both export shipments and income were significantly higher in 2003 compared to 2002. He expects that once early 2004 numbers are calculated, the increase will be even more apparent.

The most recent data provided by Natural Resources Canada shows that exports for 2003 stood at 2.9 million metric tons, valued at $1.6 billion Canadian, as compared to 2.5 million metric tons, worth $1.4 billion in the same period in 2002.

Canada imported 1.4 million metric tons of scrap metal last year (compared with 1.6 million in 2002). The 2003 imported material was valued at $1.3 billion, slightly more than the $1.27 billion paid out the year before.

For 2004, the peak may have come early. "Prices are starting to back off during the second quarter," Sobottka suggests, "and [they'll probably] reach more reasonable levels. Demand in the first quarter was exceptionally high."

Lorne Kalisky, managing director of Montreal-based American Iron & Metal Inc., also reports that business is up on the scrap side. "The demand for aluminum is being pushed by the China markets," he says, "while copper scrap supplies are still tight. We are bullish about this year."

Kalisky reports that the company, which employs more than 450 workers, has recently installed the largest briquetter in Canada in its Montreal East plant. Serge Thibault, American Iron and Metal's director of nonferrous scrap, adds that the 30,000-square-feet piece of equipment has the capacity to process 50 tons of scrap per hour. The $4 million (Canadian) briquetter became operational March 8.

For ABC Recycling on the West Coast, 2003 was also a good year. David Yocholwitz, the Vancouver-based firm's general manager, reports that 2004 promises to be even better. Yocholwitz also cites the Chinese market for his optimism.

"The Chinese are putting pressure on prices," he says. "The commodities market is skyrocketing. The only thing holding us back is a shortage of materials. The nonferrous side is still tight."

ACROSS ALL MARKETS. Brian McIver of Nova Pb, Canada's leading lead recycler, reports that lead prices are also at an all-time high, again driven by demand from China. Demand is such, he says, that inventories at the end of January were half of what they were a year before. In addition, with the generation of spent lead-acid batteries in Canada continuing to decline because batteries are lasting longer, Nova is diversifying its operations.

In 2002, the Montreal-based company received a new operating permit that allows it to process spent pot liners (SPL) generated by the primary aluminum industry. "Our proprietary technology converts hazardous SPL material into CALSiFrit, a commercial material that will be entirely consumed by the cement industry," McIver says. "All incoming SPL and other raw materials axe being recycled with no hazardous waste or by-products generated."

Nova spent more than $7 million U.S. developing the technology and started commercially recycling SPL in January 2003. The current installation is capable of recycling approximately 35,000 metric tons of aluminum SPL per year.

"There used to be 12 aluminum smelters in Quebec," McIver notes. "Now, as a result of mergers and acquisitions, there are just three left. Most recently, Alcoa acquired Reynolds, and Kaiser, who used to be number three, closed [its nearby smelter]."

"We've been very, very busy," says Michel Poulin, vice-president of Quebec Metals Recycling, a division of Quebec SNF, which has a workforce of 275. "It's about time we had a good year."

The company did the same amount of volume in 2003 as 2002, Poulin reports, but good demand and higher returns on some items helped the firm regain some profitability. CARI members are pleased with the direction outlined in the government's Canada Action Plan 2000 on Climate Change, which emphasizes enhanced recycling. Mike Clapham notes that CARI was much involved in the consultation process.

"It is too early to say what might come of this," he says. "We are still trying to get the government to accept the fundamental Fact that the recycling industry is not about waste, it should be encouraged as a sustainable development industry."

One measure of such recognition would be tax changes putting the recycling industries on the same playing field with primary metal industries. "We complement and compete with primary resource industries," says Shaw. "We should have the same tax advantages, such as being able to write off certain equipment.

CURBSIDE COMMUNIQUES. In municipal recycling news, the city of Calgary in southern Alberta has set a goal to divert 80 percent of potentially recyclable material from its landfills by 2020. Currently, the city's depot system recovers just 22 percent of newspapers, mixed paper, cardboard, cleat glass, plastic bags, metal cans, milk jugs and table-top containers as compared to 65 percent to 70 percent in comparable Canadian cities.

Mike Saley, Calgary's manager of strategic planning and diversion, reports that the city does not have an Ontario-style blue-box program per se. Private companies operate curbside recycling programs that serve 12,000 homes. (Calgary has a population of about 800,000.) The city established its depot program in 1992.

"Calgary is unique in the cost effectiveness of our drop-off system," Saley says. "We collected 29,000 tons of material at our depots last year, with the curbside programs bringing in another 3,000 tons."

Saley also reports that Calgary has launched a one-year pilot project in May to collect organic wastes--vegetative food waste and yard trimmings--in three areas of the city encompassing 2,000 homes, one apartment tower and one townhouse cluster. To collect the materials, the city is using a semi-automated garbage truck that city council is considering as a potential replacement for its present fleet of garbage trucks.

In Winnipeg, the new single-stream recycling program, the first of its kind in Canada, has made a noticeable difference in the amount of material being recycled. Dan McInnis, the city's solid waste director, reports thai during the last three months of 2003, after the new system was put into place, nearly 1,000 more metric tons of materials were put into the city's blue boxes than in the same period in 2002. The new program eliminates the need for people to sort their recyclables before throwing them into the blue boxes and also accepts plastics with the triangular recycling symbol.

Joanne St. Goddard, executive director of the Recycling Council of Ontario, Toronto, reports that the new provincial government, which was elected about a year ago, has introduced new regulations aimed at boosting recycling rates across the province to 60 percent, with an emphasis on setting and tracking targets. The new regulations are based on initiatives introduced by the previous government, including the establishment of Waste Diversion Ontario (WDO)--a partnership among industry, municipalities, the province and non-governmental organizations--in its new Waste Diversion Act that was passed in June 2002.

The WDO is charged with developing, funding and implementing waste diversion programs for materials designated by the Minister of the Environment by regulations. Its first mission was to develop a sustainable funding plan for the blue-box program by obligating brand owners whose packaging ends up in the blue box to pay for half of the operation costs to municipalities for collection and processing.

The Ontario government also has established Stewardship Ontario, which has the authority to set and collect fees from industries whose materials--such as glass, metal, paper and plastics--are collected in the blue-box program.

The provincial Environment Ministry, St. Goddard says, is also working on developing used tire and used oil recycling programs.

PRECIOUS METALS INDUSTRY CONVENES IN JUNE

Several aspects of the precious metals industry, including recycling, will be discussed at the 28th Annual Conference of the International Precious Metals Institute (IPMI), taking place June 12-15 in Phoenix.

The platinum group metals will be the focus of many of the sessions, with topics ranging from highly technical refining, assaying and recovery analyses to updates on trading and new applications for platinum and palladium.

Speakers and moderators have been drawn from North American metals companies such as Kaye Refining Corp. and Sabin Metal Corp.: from U.S. government agencies and trading groups; and from multi-national corporations as well.

Several invited speakers are also from overseas companies and agencies, including speakers from Russia, Germany and Japan.

The IPMI Annual Conference is being held at the Arizona Biltmore Resort in Phoenix. More information on the event can be found at www.ipmi.org.

Canada's precious metals industry recently made news when Falconbridge Ltd. and Agnico-Eagle Ltd. signed a life-of-mine metals concentrate supply and processing agreement.

The agreement calls for Falconbridge's Kidd Creek operations in Timmins, Ontario, to process 60 percent to 75 percent, up to a maximum of 125,000 metric tons per year, of the precious-metal-bearing zinc concentrate production from the LaRonde mine in Quebec.

STANDING UP TO SCRUTINY

Environment Canada has apparently thrown in the towel in its legal efforts to shut down Winnipeg-based XPotential Products Inc.

The company, started by a western Canadian scrap metals recycling family, uses recycled plastics, including portions of the auto shredder residue stream, to manufacture curbs, fence posts and landscaping ties.

The federal government was charging that the company's products contained unacceptable levels of PCBs. In late February, a federal court judge turned down Environment Canada's application for an injunction against XPotential and its sister company General Scrap, which shreds autos and recycles the metals. Environment Canada has no plans to appeal the decision.

"The case didn't have that much effect on our operations," says Jack Lazareck, who is president of both companies. "We are licensed by the Province of Manitoba in any case."

SLATER SELLS WELL AND MILL

The former Slater Steel Inc. of Mississauga, Ontario, Canada, is selling its Welland, Ontario, electric arc furnace mill to a group of investors based in the U.S.

According to a Canadian Press report, the group of U.S.-based investors purchased the Atlas Specialty Steels Welland mill under the name Centre Steel Holdings Ltd.

Executives selling off assets of the now defunct Slater Steel Inc. have already sold a Hamilton, Ontario, mill to a group of New York-based investors and a Lemont, Ill., mill to another group of investors. Slater's former Sorel Forge division has also been sold to a holding company.

Other Atlas Specialty Steels facilities in Canada and in Fort Wayne, Ind., remain up for sale.

CAN DO

Read about Alcan's plans to add an aluminum recycling plant in Quebec at www.RecyclingToday.com.

The author is a freelance writer based in Winnipeg, Manitoba, Canada. He can be contacted at myron@autobahn.mb.ca.
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Title Annotation:Canadian Market Report
Author:Love, Myron
Publication:Recycling Today
Geographic Code:1CANA
Date:May 1, 2004
Words:1954
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