PHILADELPHIA The quality of scrap arriving at steel mills is crucial and should motivate auto shredders to enhance their reputations by providing low-residual feedstock on a consistent basis.
"We are willing to pay a premium for reliable-quality scrap, but it has to be reliable-quality scrap," John Zanieski, president of Evraz Inc. North Americas Evraz Recycling division, told attendees at AMMs 6th Annual Steel Scrap Conference in Philadelphia. Suppliers who have a proven track record of delivering loads of material with low copper and chrome levels are valued sources, he said.
"Quality certainly matters, as it can result in bad heats," he said. "Quality has to occur before it reaches the furnace."
Shredders have the ability to increase the quality of their scrap, according to Dan Pflaum, president of Dayton, Ky.-based Gamma-Tech LLC. "From watching the shredders, they possess the ability to control the process."
In addition to employees vigilance on the copper-picking line, advanced technology is available and cost-effective in the long run, he said, adding that a scrap analyzer costs less than 1 percent of the scrap purchase price.
It is a myth that todays price of copper serves as enough motivation for shredders to remove copper from their scrap. "There is a cost to get that copper contamination out of the stream, and it may not always be cost-effective," Pflaum added.
Shredder operators who choose to sell mediocre scrap to lower their operating costs are short-selling themselves, according to panel moderator Philip Hoffman, chairman and chief executive officer of Hoffman Iron & Steel LLC and vice president of U.S. ferrous scrap trading at Medtrade. "It is estimated to cost an additional $2 a ton to reduce copper content, but mills will pay as much as a $10 premium to secure scrap that has very low copper residuals," he said.
One scrap executive on the panel said low-residual scrap isnt a guarantee that mills will come running.
"I have some bush clips coming in and can guarantee a 0.05 (percent) copper (content). I put it on the market as an industrial bundle commodity, but it hasnt got much response," Kevin Crary, business development/project manager at Burnham, Ill.-based Scrap Metal Services LLC, said. "They (mills) claim they like the idea of low residuals, but it is out there and it is not getting a lot of play."
Mills test for copper in their scrap, but scientific data have shown the daily average ranges from 0.22 to 0.38 percent, Pflaum said.
"Melt tests are very valuable, but its really nothing more than a photograph of a moving picture," he said.