Processing U.S. industrial scrap isn't an expanding field, so some scrapyards are looking elsewhere for growth.
Buying and processing electronic discards is one way to diversify. Another is to handle residential recyclables—materials collected at curbside in parallel with household waste. As local governments try to prolong the life spans of landfills, material recovery facilities are increasingly important, attracting both big guys and small.
Scrap behemoth Sims Metal Management has just about nailed down a long-term link with New York City a 20-year deal involving a dedicated facility under discussion since 2004.
On a much smaller scale, Friedman Recycling Co. of Phoenix, which handled Tucson's materials recovery for five years before being bumped by a rival, recently signed up for a 15-year stint doing the same thing for El Paso, Texas.
The Institute of Scrap Recycling Industries has set up a "curbside task force" to keep tabs on the developing market.
Sims Metal Management isn't quite ready to count its unhatched chickens in New York, where it signed on as a short-term contractor in 2003. The company declined to describe the status of its Big Apple plans, but the principles of a new facility and a 20-year relationship have been on the table since 2004. The lawyerly details can be tricky, particularly since some of the capital investment will be in equipment that could outlast the recycling contract.
In May, the city council approved a Sims lease of the 30th Street Pier in Brooklyn, "over 1 million square feet of pier and water space," according to the council's announcement. Sims "will receive and recycle all glass, steel, plastic and commingled paper derived by the Department of Sanitation's curb pick-up service." Since the Brooklyn facility could take three years to construct, the lease is actually for 23 years rather than 20, with renewal options adding another 17 years.
In less-ambitious form, the relationship goes back to 2003, when New York reversed a decision to curtail municipal recycling. At the time there was no such company as Sims Metal Management; the original deal was with a Sims ancestor called Hugo Neu Schnitzer East using a yard in Jersey City, N.J.
The best public description of how the expanded arrangement will play out is an environmental document from March. The processing mix, by weight, is expected to include 33-percent glass, 30-percent ferrous and 24-percent plastic. Annual quantities should be around 214,000 short tons of metals, glass and plastic and 47,000 tons of paper. The non-fiber sorting will use screening, magnetic separation, electrical eddy current, air classification, manual separation and optical sorting for plastics.
Sims Metal Management also is authorized to use part of the Brooklyn site as a private ferrous scrapyard, expected to handle 47,000 tons a year.
El Paso is a different order of magnitude, accounting for just 4 percent of the household recyclables collected in New York, according to a table posted by Waste News magazine.
Friedman Recycling didn't have a scrapyard in El Paso until the city advertised for a processor. El Paso was about to launch curbside collection of recyclables for the first time in 2007, commingled in a single stream. Friedman became winning bidder there for a 15-year span. Friedman, focused on paper with a sideline in metals, had gotten its feet wet with municipal recyclables in Tucson, holding that city's contract for five years starting in 1997.
Sorting and upgrading household recyclables is vastly different from the normal scrapyard diet, according to the company's vice president, David Friedman. "We're not talking about two or three things commingled, but 10 or 12 things. The physical handling is much more complex. And with the municipality as the client, you become a quasi-public facility."
Paper is the trickiest item, according to Friedman, because single-stream contaminants are hard to wash out. "We invest a lot of labor and time getting that material cleaned up to the same specification as our (non-municipal) materials, which is what the market demands," he said. "It takes a hell of a lot more time and effort but it's definitely possible."
Paper, in turn, becomes a contaminant of the plastics. Fear of identity theft has added to the problem, since thin strips of shredded paper are particularly confusing to the sorting equipment. "It goes through the screen and ends up in the plastic lines," Friedman said. "Metals are the easiest because the separation is more efficient—eddy current for nonferrous and overhead magnet for ferrous. When a stream's coming through that may be contaminated, these tools do an effective job. But for the other materials, the screens are less effective."
So how are operations different from a conventional scrapyard? "No. 1, it's very capital intensive. And No. 2, you'd be surprised how abrasive the materials going through the system can be," Friedman said.
Even aluminum cans become complicated in a single stream. "We do have a buyback center to buy aluminum cans from the public, but most of the cans we get come commingled in the blue barrels," he said. "From the buyback center, life is easy. You do a quick sort and then bale it up." But cans arriving in mixed recyclables are a different story. "Manual sorting, then an air current separating lights from heavies and then through the eddy current separator, which hopefully pulls out the aluminum cans. And it goes through a quality sort line before it goes into the baler," Friedman said.