Market Status Report: Ferrous Scrap

Table of Contents

Preface

I.  Introduction

• Background
• Definitions

II.  Supply of Steel Can Scrap

• Supply
• Demand for Steel Scrap
• Primary Barriers to Steel Can Recycling
• Strategies for Steel Can Recycling

III.  Metallic Discards

• Primary Barriers to Metallic Discards Recycling
• Strategies for Metallic Discards Recycling

IV.  Summary

• Steel Cans
• Metallic Discards

I.  Introduction

Background

The ferrous scrap market is an old and well-established market operating on a world-wide scale. On an annual tonnage basis, more ferrous scrap is recycled than all other secondary materials combined. The market for municipal ferrous scrap operates as a part of the larger market for industrial ferrous scrap.

By weight, ferrous metals are the largest category of metals in the municipal waste stream. The largest quantities of ferrous metals are found in durable goods such as appliances, furniture, tires, and other miscellaneous durables, and in steel cans. Steel cans are defined as steel food, paint, and aerosol containers, including steel cans which have been "tinned" (i.e., "tin cans").

According to the Board's waste stream composition data, the category "ferrous metal and steel cans" incorporates all ferrous metal except the category "white goods". Ferrous metal and steel cans represented about 3.5 percent of the material disposed in California in 1991, or 1.3 million tons annually. This roughly equals the total amount of glass disposed in the state that year. Because data on steel cans are aggregated with that for other ferrous material, an estimate of the tons of cans disposed in California is not possible. The Steel Recycling Institute estimates that 1.55 million tons of cans were recycled in the U.S. in 1994. Roughly speaking, if California accounts for about 13 percent of the total U.S. population, and steel can recycling is in some fashion related to population, then California recycled an estimated 202,000 tons of steel cans in 1994.

Most steel cans are diverted through the efforts of jurisdictions operating curbside programs. About 400 programs in California include steel cans in their collection programs. Most of the collected steel cans in California are used by steel manufacturers to produce steel and by the copper industry to increase the quantity of copper extracted from ore at their mines.

In 1991, approximately 3.38 million major household appliances (268,000 tons) and 301,500 tons of other metallic discards (e.g., wood-burning stoves, metal furniture) were discarded. Appliances and other metallic discards (not including vehicles) constitute approximately 1 percent of the solid waste generated each year in California. The published recycling rate estimates for household appliances (refrigerators, freezers, stoves, etc.) is approximately 71 percent.

In 1994, approximately 20 million vehicles (12 million tons) were discarded in California. Vehicles are estimated to be recycled at rates exceeding 95 percent. This estimate does not include motorcycles, scooters, and bicycles, which are believed to be recycled at much lower levels. The recycling rate for vehicles is higher than for appliances because of the amount of scrap metal in each vehicle and the relatively well-established system for recycling vehicles.

The market for California's ferrous is principally the Pacific Rim. The demand in California itself is limited because there is only one steel mill in the state. Future California ferrous scrap metal demand will depend on the current ferrous metals market which is old and well established and operates on a world-wide scale.

This status report addresses the steel can supply and demand factors, market development barriers, and strategies to enhance steel can recycling; and the market, barriers, and strategies to improve the market for metallic discards and other construction and demolition ferrous.

Definitions

The Institute of Scrap Recycling Industries, Inc. (ISRI) has published specifications and practices that apply to steel can scrap purchased and sold in the United States and Canada. The specification for can scrap is defined as: "Steel can scrap compressed to charging box size and weighing no less than 75 pounds per cubic foot. Cans may be baled without removal of paper labels, but free of other non metallic. The bundle may include up to 5- gallon tin-coated containers."

"Major appliance" means any domestic or commercial device; including, but not limited to, a washing machine, clothes dryer, water heater, dehumidifier, conventional oven, microwave oven, stove, refrigerator, freezer, air-conditioner, trash compactor, or residential furnace.

"White goods" means any household appliance that once was traditionally white in color; including, but not limited to, a refrigerator, stove, washing machine, freezer, clothes dryer, or water heater.

"Metallic discards" means any large metal article or product, or any part thereof; including, but not limited to, metal furniture, machinery, major appliances, electronic products, and wood burning stoves.

II.  Supply of Steel Can Scrap

Supply

Steel cans are primarily diverted from the waste stream through curbside programs operated by local jurisdictions. Some cans are also diverted from commercial and institutional accounts by waste haulers and recyclers. In California, the diverted material flows to a processor, known as a detinner, where the can scrap is shredded and the tin is removed. The shredded detinned material is then sold to steel producers and copper mines throughout the West.

The primary factors affecting supply of steel cans include:

• Number of steel cans sold in the state.
• Number of curbside programs collecting steel cans.
• Consumer awareness of recyclability of steel cans.
• Willingness of recyclers to service commercial and institutional scrap steel can generators.
• Participation of commercial and institutional generators and the haulers serving them.

Future supply of steel cans will be affected by the highly competitive market for packaging containers. In California the steel can has lost most of the beverage can market to aluminum. As the price of aluminum increases, there is some interest in beverage product manufacturers switching to steel cans. If this occurs, more steel cans will be available for recycling.

Demand For Steel Can Scrap

The demand for steel cans in California arises from western copper and steel production, and to some extent, iron foundries. This demand is affected by production rates of copper ore, U.S. steel production, and the global market for ferrous scrap.

Future demand for steel cans will largely depend on the worldwide demand for copper and steel. The demand for copper and steel is, in turn, largely dependent on the growth rate of the western, U.S., and global economies. As the economies expand, more copper and steel is used in the industrial, transportation, and construction sectors.

Primary Barriers To Steel Can Recycling

The primary barriers to steel can recycling are:

• Lack of sufficient collection systems for food service and institutional recycling of steel containers.

• Steel drums, pails, propane canisters, and aerosol paint cans are considered "problem containers." As a result, there is a lack of sufficient awareness of and participation in the recycling of these containers. Regulatory agencies continue to spread misinformation which creates a perception that regulatory obstacles exist to recycle these ferrous containers. In reality, regulations have become more permissive and supportive for recycling.

Strategies for Steel Can Recycling

The staff proposed strategies to increase steel can recycling are:

• The Board should partner with such private sector organizations as the Steel Recycling Institute in an outreach program to encourage business and haulers to collect steel cans from commercial and institutional accounts. The outreach should target the largest sources of steel cans, such as schools, hospitals, and restaurants. Outreach methods might include fact sheets, workshops, and the Board's web page internet site.
• The Board, working with the steel recycling industry, should create opportunities to educate the public on the recyclability of "problem containers". The Board, with industry, should hold workshops, publish reports, research papers, and fact sheets to educate the public to help eliminate the information barrier. This outreach should target the largest generators of these containers.

III.  Metallic Discards

Primary Barriers to Metallic Discards Recycling

Staff has identified the following six barriers to metallic discard recycling.

• Transportation costs in rural areas may hamper metallic discards recycling. The cost to transport metallic discards in rural areas are higher than in metropolitan areas, and may exceedthe price paid for the recyclable metals themselves.
• Energy conservation appliance rebate/pickup programs have been phased out or are being phased out because of the high program costs. In part, this is because the supply of old appliances available for recycling may not be sufficiently high to warrant the investment and cost of operating an appliance recycling program.
• The costs to the public to have old appliances recycled is approximately $20 to $40 per unit. It may not seem worthwhile to the average consumer to pay to have their appliances recycled. Many retail stores do not take back old appliances when a new one is delivered.
• Additional costs may discourage people from considering recycling. Some appliances contain hazardous waste components, PCBs, oils, CFCs, which require special removal before the appliances are recycled and/or disposed. This adds to the costs and liability of appliance recycling.
• There are few incentives to prompt recycling rather than disposal of old appliances. Unlike other states, California has no absolute mandatory landfill ban on metallic discards. Landfill operators can dump metallic discards if it is not economically feasible to recycle them.

• In rural cities and counties, local enforcement agencies don't have the resources to enforce illegal disposal of appliances. As a result, many appliances are being disposed in ditches, fields, and rivers rather than being taken to a facility for recycling.

Strategies for Metallic Discards Recycling

Staff proposed strategies to overcome the barriers identified above are:

• Sponsor a legislative ban on all metallic discards from being landfilled and requiring landfill operators to set the metallic discards aside for recycling. This would increase the supply of appliances available for recycling. Landfill operators may have to raise their fees for accepting old appliances to cover added costs for processing prior to transporting to a metal recycling facility.
• Sponsor legislation requiring retail stores selling appliances to collect an "Advance Disposal Fee." This would provide a funding source and create an infrastructure to collect and process the old appliance for recycling rather than disposal. Some funds from the fee could be allocated to increased enforcement of illegal dumping laws.
• Promote development of an efficient metallic discards diversion infrastructure involving State agencies, local jurisdictions, and businesses. These entities would work together to decide how to collect, process and recycle old appliances. For example, recycling and reuse centers could be established to fix old appliances and sell them at a lower than retail price at reuse warehouses. Another example is to have the municipal sanitation department designate appliance pickup days at certain intervals during the year. This would decrease illegal appliance disposal.

IV.  Summary

Steel Cans

The major barriers that impede recycling of steel cans are:

• Lack of sufficient collection systems at large food service and institutional generators of steel cans.
• Regulatory agencies continue to spread misinformation, which creates a perception that regulatory obstacles exist to recycle steel drums, pails, propane canisters, and aerosol paint cans.

Staff strategies to improve steel can recycling are as follows:

• The Board should conduct an outreach program, partnered with such private sector organizations as the Steel Recycling Institute, to encourage business and haulers to collect steel cans from commercial and institutional accounts.

• The Board, working with the steel recycling industry, should create opportunities to educate the public on the recyclability of steel drums, pails, propane canisters, and aerosol paint cans.

Metallic Discards

The major barriers that impede recycling of metallic discards are:

• Transportation costs in rural areas may hamper metallic discards recycling. The cost to transport metallic discards in a rural area may exceed the price paid for the recyclable metals.
• Energy conservation appliance rebate/pickup programs have been phased out or are being phased out because of the high program costs.
• The cost to the public to have old appliances recycled is approximately $20 to $40 per unit. It may not seem worthwhile to the average consumer to pay to have their appliances recycled.

Staff strategies to improve metallic discards recycling are:

• Sponsor legislation to ban all metallic discards from being landfilled and require landfill operators to set the metallic discards aside for recycling.
• Promote development of an efficient metallic discards diversion infrastructure involving State agencies, local jurisdictions, and businesses. These entities would work together to decide how to collect, process, and recycle old appliances.

1996 Market Development Plan

Last updated: October 23, 2007