The 2021 ISRI Fall Meetings began Monday, Oct. 18, in Charleston, S.C., and ended Wednesday, Oct. 20.
Chris Gneiding, Nonferrous Division chair and trader for Intrametco, called the meeting to order at 1:30 p.m. on Tuesday, Oct. 19. She briefly reviewed the September ISRI Commodity Roundtables Forum. Reports said the event was a great success for nonferrous and a success overall, she says. The division asks members to send any ideas for topics, speakers, or moderators for the 2022 ISRI Convention and Expo to the co-chairs so they can get everything in place by January.
Andy Cohen of Metal Conversions, who will chair the Specifications Working Group, supplied an update about ISRI Specs. All commodities are encouraged to contact him to get the process started. Cohen noted that the working group is trying to make the specs accessible and useful and provide them in a clear manner. He said that the specs are a living, working document rather than something static, and added that Nonferrous Division members should expect to be called on to help and review the specs as needed.
Joe Pickard, ISRI’s chief economist and director of commodities, announced the Commerce Department awarded ISRI a grant for $46,000 over a three-year period to advance the association’s work promoting U.S. exports of recycled materials. ISRI plans to create a new interactive, online specs resource. “We want to make it an interactive interface where people can search for various commodity specifications and links between commonly traded commodities and additional resources in terms of import guidelines and other resources,” Pickard says.
After the safety message, Pickard gave an update on the nonferrous markets, particularly focusing on aluminum. He reviewed the year to-date nonferrous pries at the London Metal Exchange. “We’ve seen a remarkable run basically across the board,” he says. “Aluminum prices [as of Oct. 19] are up over 61% as compared to the end of 2020.” There are price gains between 25% and 35% for other nonferrous metals. “Part of the explanation for the rise in aluminum prices has to do with inventory and stocks,” Pickard adds. He also discussed the depletion in aluminum stocks held in LME warehouses since March.
Manufacturing numbers have also been positive, Pickard says. The Purchasing Managers’ Index has seen 16 consecutive months of growth in manufacturing. “The numbers have been positive on supplier deliveries, inventories, customer inventories, and prices this year,” Pickard says. “But we’ve continued to see at least three major issues our members continue to struggle with: supply chain bottlenecks, transportation delays and expenses, and difficulty in the labor market with hiring and retaining new employees.”
U.S. aluminum scrap exports in 2020 felt a significant slowdown in metal consumption of recycled aluminum due to the lingering effects of COVID-19 and shutdown of some manufacturing base. “This year we’ve seen positive growth on the domestic-demand side and even more so in volume terms on the export side of the equation,” Pickard says. “Those volume gains have been compounded by significant price hikes.” As reported by the Bureau of Labor Statistics, the aluminum scrap producer price index (PPI) is up 92.8% year-on-year; copper-based scrap gains 40% year-on-year. Nonferrous scrap overall, which includes lead, zinc, nickel, and tin, shows a 36% increase in PPI.
Pickard reviewed export shipments of recycled commodities. Recycled commodity shipments peaked in 2011 at more than 2.1 million metric tons and experienced a multiyear low in 2016 to over 1.3 million metric tons as Chinese imports of aluminum scrap declined. From 2016 to 2021, Malaysia and other markets increased their imports which led to a rebound in reclaimed aluminum shipments. Malaysia is still the single largest destination for U.S. recycled aluminum. “Shipments are up 32% for the year to date,” Pickard says.
Due to price increases, the value of reclaimed aluminum exports have increased 77% to $2.4 billion through the first eight months of 2021. “For U.S. recycled commodity exports overall, we’ve already surpassed 2020 in dollar terms and [2021 is] likely one of the strongest exports years for our exports, in dollar terms, probably since 2011.”
Pickard reviewed key regions of growth using the International Monetary Fund’s (IMF) October projections. The IMF projects global growth will increase 5.9% in 2021 and 4.9% in 2022. “They slightly downwardly revised the 2021 economic projections, due in part to supply disruptions in advanced economies and worsening pandemic dynamics in developing economies,” Pickard explains.
Adina Renee Adler, ISRI’s vice president of advocacy, provided an update on the Biden administration’s announcement on trade policy with China. The administration has indicated it will keep the tariffs that were put in place during the Trump administration. However, Adler noted, the administration is willing to consider exemptions.
On Oct. 5, the Office of the U.S. Trade Representative announced it is seeking public comments on tariff exemptions through Dec. 1. ISRI will explain to USTR that shredder wear parts cannot be sourced from anywhere other than China, Adler says. The association encourages members affected by the tariff to submit comments as well.
Adler reviewed Malaysia’s new requirements for ferrous and nonferrous metals and recovered paper. Under the new requirements, metals must be almost entirely of metallic content and cannot include anything that isn’t recoverable. For recovered paper, the European EN 643 standards apply. There is a zero tolerance for scheduled waste, which refers to hazardous materials and include plastics. The Malaysian government delayed the full implementation for metals until Nov. 1 and has not made an announcement on recovered paper.
Photo courtesy of ISRI.
