Demand and pricing for copper and aluminum scrap are strong now and could strengthen further.

Commodities analysts are forecasting bright futures for copper and aluminum, which are enjoying strong demand and pricing presently.

A New York-based analyst with Goldman Sachs predicts copper will approach $51,000 per metric ton, or $6.80 per pound, by 2025 in his analysis titled “Copper is the new oil.”

According to the Business Insider website, Goldman Sachs’ Jeffrey R. Currie predicts that copper will be vital in replacing oil with renewable energy, and “a supply crunch” has the potential to increase pricing “by more than 60 percent in four years.”

Currie’s analysis focuses on the next five years and sees copper rising to as much as $11,000 per ton ($4.98 per pound) by mid-2022 and $15,000 per ton by 2025.

The global transition toward renewable energy could increase copper demand by up to 900 percent on an annual basis to 8.7 million tons by 2030 “if green technologies are adopted en masse,” according to Business Insider.

Currie says copper mining and production aren’t ready for such a rapid increase in demand, however. He adds that the strain already is visible, with copper pricing rising by nearly 80 percent over the last year, though output has not increased similarly.

Analysts say aluminum also will benefit from the transition to green energy and green mobility, with Julian Kettle of U.K.-based Wood Mackenzie saying demand will increase by about a third by 2040, while the World Bank says 6 million tons of the metal will be needed annually by 2050.

Aluminum’s outlook for the year ahead is more muted. Mining.com reports that Fitch Solutions has forecast an aluminum price of $1,850 per metric ton this year compared with $1,731 per metric ton in 2020, noting that increasing supply from China in the global market is expected to limit the rise in prices.

 However, the London Metal Exchange (LME) aluminum price has exceeded the Fitch forecast so far in 2021. In March, the LME aluminum alloy settlement price averaged $2,187 per metric ton. In February, it was at $2,080, up from $1,960 in January. This terminal market strength has extended to aluminum scrap prices.

“All of the markets are really quite bullish in metals, whether ferrous or nonferrous,” a contact with a scrap metal processing company based in the Upper Midwest says.

He adds that industrial generation of nonferrous metals remains 20 to 25 percent softer than prepandemic levels, but scrap demand and pricing are strong, even among export consumers.

Scrap consumers have not been widening the spreads they are willing to pay relative to terminal market prices, he says, with the exception of export orders for birch/cliff, the mixture of No. 2 copper wire and No. 2 copper solids and tubing.

Prompt deliveries also are available with red metals and aluminum consumers. Scrap consumers are even looking for spot purchases of bare bright and No. 1 copper, which wasn’t the case in the fourth quarter of 2020 or in January of this year, the contact says. “Customers were working off past orders.”

He says the semiconductor issue in the automotive sector has created intermittent disruptions for the secondary aluminum producers his company supplies. “It doesn’t reduce their desire to get material, but their melt schedules have been affected.” Those affected have had to delay deliveries of some of their scrap orders.

Generation of stamping scrap also has been reduced as a result of the intermittent disruptions, he says.

Regarding export demand, China is showing more interest in clean copper grades, while Malaysia is buying red metal scrap more generally. India and Pakistan are buying twitch and zorba, the shredded aluminum grades.  

Whether domestic or export, “Consumers are trying to buy only what they need in the short term,” the contact says. “They don’t want to go long, but they don’t mind paying the market price.”

He says he thinks red metals prices have the room to go much higher. “I think there are going to be high prices and that it will be difficult for consumers to buy enough to widen their spreads.”

When it comes to copper, he adds that the last time pricing was at this level, the spreads were wider for scrap. “You haven’t seen wider spreads as there is more demand than supply.”

A report released April 21 says that building materials are common sources of PFAS.

A study conducted by the Green Science Policy Institute in Berkley, California, has found that per- and polyfluoroalkyl substances (PFAS), including large fluoropolymers, are used in several common building materials.

The research found that PFAS are added to roofing materials, paints and coatings, sealants, caulks, adhesives, fabrics, glass and more. This is because PFAS provides functions such as weatherproofing; corrosion prevention; and resistance to stains, grease, and water.

However, PFAS can make their way into water, air, food and indoor dust during the manufacturing, use and disposal of these materials. Building construction and maintenance workers, as well as do-it-yourselfers, may be particularly at risk, the Green Science Policy Institute says. 

PFAS contamination has been associated with a wide range of serious health consequences, including certain cancers. Additionally, tile and grout spray-on waterproofing products containing PFAS have been implicated in several cases of acute lung damage, the institute says.

“It’s worrisome that PFAS may be wall-to-wall in our homes and offices,” says Tom Bruton, senior scientist at the Green Science Policy Institute. “But the good news is that safer alternatives already exist. This is a problem that architects, designers and manufacturers can solve.”

Professionals cited contract requirements, materials markets and tax incentives as what would promote better debris management practices.

Purdue Polytechnic Institute’s School of Construction Management Technology sent surveys out to members of the National Demolition Association (NDA) during fall 2020. In all, the survey generated 89 total respondents.

One of the primary goals of the research was to assess the demolition community’s attitudes and willingness to adopt more sustainable practices in their debris cleanup operations. This is especially pertinent since emergency managers seek out demolition and cleanup specialists to clear out debris after a disaster. Purdue Polytechnic Institute’s researcher analyzed this community’s responses using what is known as a strengths, weaknesses, opportunities and threats (SWOT) strategic planning tool to see where the industry can improve its sustainability in debris management to help bolster a community’s or region’s resiliency.

Regarding strengths found in the survey, nearly 87 percent of those surveyed indicated they are already recycling in their personal lives. Another positive indicator was the nearly 92 percent of respondents who said their businesses currently use salvaging materials for recycling as a means of company revenues. The idea of sustainability, therefore, is not new or foreign to the respondents. According to the researcher, these findings point toward an upward trend of embracing sustainability “even if not fully altruistically, but in a purely economic matter of business.” 

On the other hand, the weaknesses analyzed from the surveys indicated concerns of the “trendiness” of sustainability concepts and these practices not being practical, safe or fair across the industry. Additionally, the survey found that almost 40 percent of waste handlers in the demolition industry are not working with either another industrial or secondary market partner to handle or treat the debris coming off of sites. 

As part of the opportunities analysis, more than half of those surveyed (54 percent) said they have a basic grasp of the idea and concepts embodied by the circular economy. When asked about what would drive them to adopt greater sustainability practices, the respondents said that contract requirements, secondary materials markets, and tax relief incentives, in that order, would be the most persuasive in forming their business decisions to move in that direction. 

In terms of the threats, surveyed members echoed some of the same issues in the opportunities analysis on what needs to change regarding the hurdles to sustainable materials management.  However, some of these threats can easily be refocused into opportunities, especially if new local, federal and international standards regarding debris management are embraced, the researcher found.

Toy Andrews is a doctorate candidate at Purdue Polytechnic Institute’s School of Construction Management Technology. He can be reached at andrew93@purdue.edu.

GAF will be committing more than $100 million to bring the recycling process to commercial scale.

Parsippany, New Jersey-based GAF, a Standard Industries company and one of the largest roofing and waterproofing manufacturers in North America, has announced a new patented shingle recycling process that has successfully produced the industry’s first asphalt roofing shingles containing recycled material from post-consumer and post-manufacture waste shingles.

According to the company, this breakthrough represents an important milestone in delivering more sustainable, affordable roofing materials and has significant implications for improving sustainability and circularity across the roofing supply chain.

“This latest innovation from GAF represents the first major step towards a circular economy for asphalt roofing shingles,” said Jim Schnepper, president of GAF. “We envision a future where every homeowner, when replacing their roof, can do so with high-quality, affordable shingles made with recycled asphalt.”

The new shingle recycling process is designed to reduce the amount of raw materials required to make new shingles without compromising product quality or performance. During its tests, GAF was able to reclaim more than 90 percent of the waste shingle material, by weight, to be reused in the manufacture of new shingles.

Additionally, GAF demonstrated its ability to manufacture new shingles containing up to 15 percent recycled material that were UL- certified for their safety and effectiveness. The U.S. Patent and Trademark Office issued GAF three patents covering this new shingle recycling process.   

GAF plans to commit more than $100 million to bring the recycling process to commercial scale, including the development of a pilot operation in 2021 that will enable the company to conduct additional research and development on its process. Through the pilot, GAF expects to assess the maximum amount of recycled asphalt that can be used to make new shingles meeting the company’s high standards while optimizing the manufacturing process prior to scaling it across its operations.

“This innovation has the potential to reduce a significant waste stream in the U.S. and represents an important advance within the roofing industry,” said Tad Radzinski, certification officer for GreenCircle Certified, a third-party certification organization. “Through the recovery of valuable end-of-life roofing materials, GAF is setting the course to reduce environmental impacts across the shingle product life cycle and provide a truly circular, sustainable solution for roofing products.” 

The steelmaker reports achieving a number of company records in the first quarter of 2021.

Mark D. Millett, president and chief executive officer at Steel Dynamics Inc. (SDI), cites robust steel demand and product pricing momentum in the first quarter of the year as contributing to the Fort Wayne, Indiana-based electric arc furnace (EAF) steelmaker’s record performance during the quarter. "Higher flat-roll steel selling values were the most significant drivers for our record quarterly earnings, as demand strength and historically low customer inventories throughout the supply chain supported prices. Domestic steel consumption remained strong from the automotive, construction and industrial sectors, and energy has shown some signs of rebounding,” he says.

The company has reported net sales of $3.5 billion and net income of $431 million, or $2.03 per diluted share. Excluding costs of approximately $20 million, or 7 cents per diluted share (net of capitalized interest), associated with construction of the company's Sinton, Texas, flat-roll steel mill, SDI’s first quarter 2021 adjusted net income was $445 million, or $2.10 per diluted share.

Comparatively, prior-year first quarter net sales were $2.6 billion, with net income of $187 million, or 88 cents per diluted share. The company's sequential fourth quarter 2020 earnings were 89 cents per diluted share, and adjusted earnings were 97 cents per diluted share, excluding refinancing costs of 4 cents per diluted share, construction costs related to the Texas steel mill of 5 cents per diluted share, a noncash asset impairment charge of 6 cents per diluted share and a tax benefit related to the reduction of a valuation allowance of 6 cents per diluted share.

"The team delivered a tremendous first quarter performance, achieving record quarterly net sales, operating income and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization)," Millett says. "Our first quarter 2021 operating income increased 130 percent sequentially to $594 million, with adjusted EBITDA of $664 million. Numerous individual operating and financial records were attained –a truly amazing achievement and a testament to the passion and dedication of our team.”

Millett says SDI’s first-quarter operating income from its steel operations was a record $641 million, while its metals recycling operations, which operate under the OmniSource name, nearly doubled its earnings sequentially. He cites improved domestic steel mill utilization for increased ferrous scrap demand.

“Our steel fabrication operations also displayed a solid performance, achieving record quarterly shipments and ending March with a record order backlog that is over 50 percent higher than our previous high point, as we head into the summer construction season,” Millett says.

In a news release announcing its quarterly earnings, SDI says its steel operations’ record operating income is because of significant metal spread expansion and near-record steel shipments. Sales prices for its flat-roll and strong long product steel more than offset higher scrap input costs, with the average external product selling price for the company's steel operations increasing $227 sequentially to $1,041 per ton, while the average ferrous scrap cost per ton melted at the company's steel mills increased $93 sequentially to $372 per ton.

As domestic steel production rose in the quarter, demand and pricing for recycled scrap “significantly improved,” SDI says. Prime ferrous scrap pricing indices increased approximately $170 per gross ton during the first quarter, nearly doubling operating income from the company's metals recycling operations to $54 million compared with the sequential fourth quarter.

SDI’s steel fabrication operations reported operating income of $10 million in the first quarter, which was more than 60 percent lower than the sequential fourth-quarter results. Notwithstanding achieving record quarterly shipments, earnings declined as significantly higher steel input costs more than offset higher realized selling values in light of the timing of matching a six-month backlog to more current higher-priced steel inputs, the company says. “Lower earnings are not a reflection of weaker demand, as order activity is extremely strong and customers continue to be optimistic concerning nonresidential construction projects,” SDI says. At 85 percent higher than its previous peak, the company says its steel fabrication order backlog is at a record level at the end of March. Steel joist and deck product pricing also has strengthened to record levels in light of strong demand and higher steel input costs.

Looking forward, Millett says, "We remain confident that market conditions are in place to benefit the domestic steel industry in 2021 and beyond. While global economies are still recovering from the shock of COVID-19, we are seeing strong steel demand coupled with extremely low customer steel inventory throughout the supply chain. The automotive sector has experienced the strongest recovery, despite the electronic chip shortage, and the construction, equipment and transportation sectors are also strong. Our order entry continues to be robust across our businesses, and when coupled with historically low inventories, supports continued strong steel selling values. We believe this momentum will continue throughout the year and that our second quarter 2021 earnings will be even higher than our record first quarter 2021 results. We also believe U.S. trade policies and existing steel trade cases will continue to moderate steel imports. Based on strong domestic steel fundamentals and customer optimism, we continue to be confident regarding North American steel market dynamics. This positive environment coupled with our strategic growth initiatives provide firm drivers for our further growth in the coming years.”

Millett mentions that SDI and its customers are excited about the company’s investment in its new Sinton flat-roll steel mill, saying, “It represents transformational competitively advantaged strategic growth with associated long-term value creation for all of our stakeholders.”

He says the facility will have product capabilities that exceed those of existing EAF flat-roll steel producers, enabling it to compete “even more effectively with the higher-carbon-emitting integrated steel model and foreign competition, providing a broader steel portfolio and a climate-conscious supply option for our customers.”

Regarding construction on the facility, he says it has been going well and remains within the projected cost of $1.9 billion. Steel production at the facility is expected to begin in late summer, Millett adds.

“We have targeted specific regional steel consuming markets and are competitively located close to these areas, with an opportunity to also displace foreign steel imports,” he says of the Sinton facility. “We have executed agreements with several customers to co-locate on our site, currently representing over 1.3 million tons of annual steel consumption and processing capabilities, and we are still in discussion with others. Our recent acquisition of a Mexican scrap company is also providing a key support for Sinton's ferrous scrap needs.” 

Millett says SDI also plans to add four additional value-added flat-roll steel coating lines comprised of two paint lines and two galvanizing lines with Galvalume coating capability that it expects to begin operating in the second half of 2022. “The sites for these lines are still to be determined, but two lines comprised of one paint line and one galvanizing line will be located in the southern U.S. to provide Sinton with the same diversification and higher margin product capabilities as our Butler and Columbus Flat Roll Steel divisions,” Millett says. “The estimated investment for these two lines is $225 million, with a combined annual coating capacity of 540,000 tons. The other two lines will have the same annual coating capacity with an estimated investment between $175 million and $200 million. They will be located in the Midwest to support the growing demand for coated flat-roll steel products and to further increase the diversification and cash generation capacity of our existing Midwest flat-roll steel operations.”