Steel producer acquires Detroit-based Ferrous Processing & Trading scrap firm.

Ohio-based integrated steelmaker Cleveland-Cliffs Inc. says it has entered into a definitive agreement to acquire Detroit-based Ferrous Processing and Trading Co. (FPT) for approximately $775 million.

Cleveland-Cliffs describes FPT as “among the largest processors and distributors of prime ferrous scrap in the United States, representing approximately 15 percent of the domestic merchant prime scrap market.”

In recent Recycling Today lists, FPT has ranked as the ninth largest overall ferrous scrap processing firm in North America and also the ninth largest nonferrous processing firm that also operates shredding plants. FPT has auto shredding locations in Florida, Michigan, Ohio and Ontario.

FPT currently processes approximately 3 million tons of scrap per year, approximately half of which is prime grade ferrous scrap, according to Cleveland-Cliffs.

FPT operates 22 scrap processing facilities, with approximately 90 percent of revenue originating from its Midwest locations, primarily in Michigan and Ohio. In the trailing 12 months ended Aug. 31, 2021, FPT generated EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $100 million, the Cleveland-based steel producer and iron ore mining firm says.

“FPT already enjoys an outsized position in automotive and industrial scrap, which is expected to grow as part of Cleveland-Cliffs,” the company adds.

“Cleveland-Cliffs is entering the scrap business as a major player through the acquisition of a large scrap company,” states Lourenco Goncalves, Cleveland-Cliffs’ chair, president and CEO. “Even more importantly, FPT has a very meaningful presence in prime scrap. With all the new flat-rolled EAF [electric arc furnace] capacity coming online in our market over the next four years, prime scrap will only become more and more scarce.”

Goncalves continues, “As the largest supplier of flat-rolled steel in North America, Cleveland-Cliffs is the main source of the steel that generates prime scrap in manufacturing facilities. Furthermore, throughout our entire footprint, Cleveland-Cliffs also consumes a very significant amount of scrap in our EAFs and BOFs [basic oxygen furnaces].”

Adds Goncalves of the strategic aspects of the purchase, “The acquisition of FPT will enhance our ability to buy back prime scrap directly from our clients, cutting the middlemen and improving the margin contribution from scrap for both Cleveland-Cliffs and for the manufacturing and service center clients that will be able to sell scrap directly back to us.”

The Cleveland-Cliffs list of “transaction rationale” aspects also includes that it:

The acquisition has been approved by the Cleveland-Cliffs board of directors and is expected to close in the fourth quarter of 2021, subject to regulatory approval and closing conditions.

India and its neighboring nations remain poised to soak up a portion of North America’s excess scrap materials.

Demand for imported scrap metal and paper remains strong in the nations of the Indian subcontinent, which include India itself and several neighboring countries, with Pakistan and Bangladesh being the largest.

The region has been beset with waves of coronavirus infections and related workplace restrictions that have, at times in 2020 and 2021, combined to make India’s still developing transportation and logistics infrastructure even more frustrating than usual.

Delays and hassles aside, the numbers show metals producers in India, Bangladesh and Pakistan remain keen to convert scrap into secondary metals that go into transportation and building products that help comprise the steady gross domestic product (GDP) growth in the region. Likewise, recovered fiber shipped from overseas is consumed vigorously by India’s paper and board producers.

As COVID-19 emerged on the global scene in the spring of 2020, India made headlines for the swift and comprehensive restrictions on movement enacted by the government of Prime Minister Narendra Modi.

Importers and exporters of scrap commodities were among those left with lengthy delays in filling out necessary documents and in getting materials moved from an inbound container to its final destination. The resulting financial hassles, such as demurrage charges, were the subject of petitions and lawsuits.

During the remainder of 2020, the situation in India improved, and scrap again began flowing into the subcontinent. COVID-19 was not finished with India, however, with the spring of this year seeing a considerable spike in cases that resulted in more workplace and freight movement restrictions.

As of mid-September, one Asia-based nonferrous trader told Recycling Today, “Indian scrap imports have been, as usual, smooth without any customs clearing.” He added, “With COVID cases having become considerably lower, industrial activities are at a peak, with scarcity of raw materials pushing buyers to buy domestically.”

The trader also mentioned two recurring issues that can threaten the flow of scrap into India: maneuvers by primary metals producers to erect scrap import barriers (to help protect their own business); and efforts by India’s largest companies, in cooperation with the government, to manage the flow of domestic scrap to serve these established firms.

The shifting of domestically generated scrap to larger scrap yards run by multinational firms could indeed raise the overall level of metal available to domestic producers. However, in a nation where a sizable army of scavengers tends to find anything of value that is discarded, some observers say it is more likely a larger volume of metal will be formally recorded as recycled rather than journeying quietly from a peddler to a small melt shop.

The investments in scrap processing infrastructure include a 500,000-ton-per-year facility commissioned by Tata Steel in Rohtak, India, in the northern part of the country.

“Recycling scrap ensures the closure of the circular economy loop,” stated Yogesh Bedi, chief of Tata’s Steel Recycling Business, when that facility opened this summer. Ferrous scrap produced at the facility, which has a shredder and a baler, is being branded as Tata FerroBaled and Tata FerroShred, with the brands designed to “give a distinct identity to the processed scrap and ensure a standardized quality product for the customer and simultaneously raise the bar of the scrap Industry,” Bedi said.

India’s primary aluminum producers often seem to expend lobbying efforts to raise taxes and introduce tight restrictions on imported scrap to stave off competition from scrap-fed secondary producers.

While those efforts can create hurdles, India’s recycled-content metals producers (and those of neighboring Pakistan and Bangladesh) have not surrendered to the primary producers.

One of India’s largest secondary aluminum producers made news in late September by filing paperwork with a regulatory agency to raise funds through an initial public offering (IPO).

Faridabad, India-based secondary aluminum producer CMR Green Technologies, formerly known as Century Metal Recycling, says proceeds from the anticipated IPO would go toward “the payment of debt and general corporate purposes.”

The company’s Managing Director Mohan Agarwal is a staunch advocate of recycled-content metals production. At the 2020 Materials Recycling Association of India (MRAI) meeting near Delhi in February of that year, he told delegates, “Scrap is the future and recycling.”

He made that statement while acknowledging India’s government sometimes imposes lofty duties on imported aluminum scrap, often swayed by lobbying from the nation’s primary aluminum producers. (MRAI was formed in part to provide a lobbying counterweight to make the case for producers of scrap-fed metal, paper and other materials.)

Despite the ongoing placement of such hurdles, CMR Green Technologies has grown to operate 12 manufacturing plants, four of which involve joint ventures with Japanese companies Toyota Tsusho Corp. and Nikkei MC Aluminium.

On the export side of the equation, statistics gathered by the United States Census Bureau and aggregated by the U.S. Geological Survey (USGS) show the scrap metal trade between the U.S. and the Indian subcontinent remains vigorous.

A portrait of recovered fiber demand in the region can be found in a recent Recycling Today profile of Amritsar, India-based Khanna Paper. That firm consumes about 600,000 metric tons of recovered paper annually in the four paper machines found on its 80-acre campus.

Khanna Paper is a steady consumer of recovered fiber brought in via inbound shipping containers. The company’s Saurabh Khanna told Recycling Today this spring, “We had 50 containers per month when we started, and now we have more than 1,000 containers per month. We have had year-over-year growth, and we have had to hire some people because of that in 2019.”

The volume of ferrous scrap exported from the U.S. to India, Bangladesh and Pakistan (combined) has been nearly identical in the first half of 2021 compared with the first six months of 2020. Approximately 1.265 million metric tons were shipped in both time frames.

Bangladesh is the biggest buyer in the ferrous sector, having purchased 622,000 metric tons, or 49 percent, of the three nations’ total. India was next, at 332,000 metric tons (26 percent), followed by Pakistan, which received 311,000 metric tons (24.5 percent).

This year, the three nations each rank among the eight largest destinations for outbound ferrous scrap. Excluding its USMCA (U.S.-Mexico-Canada Agreement) partners with land borders, Bangladesh is the fifth largest destination, India is seventh and Pakistan is eighth.

When the three nations’ appetites are combined, their 1.265 million metric tons in the first half of 2021 fall behind only Turkey as an overseas destination (and also behind Mexico, with its land border).

Figures posted to the USGS website show CMR Green Technologies is far from alone in the region in terms of importing aluminum scrap. In the first half of this year, India brought in 169,000 metric tons of aluminum scrap, with Pakistan importing another 8,100. India’s volume puts it behind only Malaysia as a buyer of U.S. outbound aluminum scrap. (And a government agency in Malaysia might be about to make shipping scrap to that nation much more difficult.)

In early October, concerns about a coal shortage have the industrial sector in India on edge. Beyond that, if India and its neighbors are able to enjoy steady economic growth, U.S.-based processors and traders of numerous scrap materials seem poised to keep the Indian subcontinent foremost in their international trading plans for several years to come.

The Terex Recycling Systems product range will initially focus on construction and demolition and commercial and industrial waste applications.

Terex Materials Processing (MP), headquartered in Dungannon, Northern Ireland, has launched Terex Recycling Systems, which will design and build modular recycling products that can be combined to provide customers with a tailored approach to meet their recycling needs. According to a news release from Terex MP, Terex Recycling Systems will support the company’s strategy to expand its offerings in the environmental industry with products that complement the existing portfolio.

“As Terex looks for opportunities to drive our business forward, the rising urgency to deal with waste globally continues to present enormous potential,” says Kenny Hull, commercial product manager at Terex Recycling Systems. “Terex MP already has significant and expanding global presence in the waste recycling industries with our existing environmental lines—Terex Ecotec and CBI. However, we see a need for products that require a more project-focused sales approach compared to traditional machinery sales.”

Terex Recycling Systems will initially focus on construction and demolition and commercial and industrial waste applications. According to Terex MP, the Terex Recycling Systems range, which is in its first phase of product development and due for release in early 2022, will include several modular products that can be combined to create stationary systems for sorting and separation of various waste streams. Products will include feeding, modular conveying systems, trommel screens, vibrating screens, metal separation, air separation and manual sorting.

“The modularity of our solutions will make our systems quick and easy to install and keep installation costs to a minimum—without compromising on performance or reliability,” Hull adds. “This approach will also add flexibility for the end-user to adapt and grow the system as their business and market demands change.”

Terex MP plans to sell the new product range through its distribution network, with its established dealers providing local project management and aftersales support.

Engine manufacturers are exploring several alternatives to reduce collection vehicle emissions.

Plug-in electric vehicles (EVs) are getting much of the attention when it comes to technology being deployed to reduce tailpipe emissions, including for operators of waste and recycling collection trucks.

Waste and recycling hauling firms are indeed investing in EVs, but battery-powered trucks are a long way from becoming the norm in commercial and residential collection.

Thus, haulers, truck makers and engine producers have worked together to expand options for alternative fuels like compressed natural gas (CNG) and continue to design cleaner-burning conventional diesel and gasoline-powered models.

For haulers and municipalities wishing to reduce their carbon footprints, there are a growing number of environmentally friendly options available, with more in the works.

Indiana-based Cummins engines announced in mid-2021 an investment that the company says reaffirms its commitment to CNG engine options for its customers.

In late June, Cummins announced it had acquired a 50 percent equity interest in Momentum Fuel Technologies from Texas-based Rush Enterprises Inc.

Cummins says the joint venture with Momentum has been designed to produce natural gas fuel delivery systems for the commercial vehicle market in North America. The systems will “provide the strengths of Momentum Fuel Technologies’ CNG fuel delivery systems, Cummins’ powertrain expertise and [the] support infrastructure of both companies,” states Cummins.

“This collaboration shows Cummins’ continued commitment to natural gas powertrains,” Srikanth Padmanabhan, president of the Engine Business segment at Cummins, said at the time of the announcement. “This partnership will improve customer service for both CNG and [renewable natural gas or RNG] through an improved support network. We are thrilled to expand our network of clean and reliable power solutions.”

“The immediate environmental benefits of CNG and RNG, combined with upcoming regulatory requirements, will drive growth in natural gas vehicles for the foreseeable future,” stated W.M. Rush, chairman, CEO and president of Rush Enterprises.

CNG has gained market share in the waste and recycling collection market over the past 10 years, including with Phoenix-based Republic Services, which has put CNG vehicles on the road in many of its markets throughout the United States.

From 2015 to 2017, Republic announced CNG vehicle acquisitions or fueling station installations in markets including Southern California (200 CNG vehicles), Colorado (more than 100 vehicles), Ohio (25 vehicles), and Minnesota (50 trucks and a fueling station).

In some cases, local governments are pressing the case for the seemingly cleaner burning vehicles. In 2017, county commissioners in Seminole County, Florida, mandated that local haulers convert their collection fleets to CNG engines, in news initially reported by the Orlando Sentinel newspaper.

The haulers affected by that mandate were Longwood, Florida-based Waste Pro and the former Advanced Disposal Services (acquired by Houston-based Waste Management Inc. last year). The two companies served some 65,000 homes with municipal solid waste (MSW) and yard waste pick-up at that time.

While CNG seems poised to remain an option for haulers, Cummins also is supplying more traditional engines to truck makers. Earlier this year, Cummins announced an agreement to supply its B6.7 and L9 engines to the Michigan-based business unit of Japan’s Hino Trucks for models to be sold in North America.

But in that same announcement, Hino Trucks made comments pointing to a future with more battery-powered trucks on the road in North America, whether in the waste sector or beyond.

At the same company event it announced its cooperation with Cummins, Hino Trucks also said it plans to redirect engineering and other resources to accelerate the development of the battery electric vehicle (BEV) portion of Project Z, its “development path to zero-emission vehicles (ZEV).”

The company had previously announced plans to develop and produce a range of Class 4 through 8 battery electric trucks by 2024. As of 2021, Hino Trucks says it is planning to begin low-volume production of the BEV models in the fourth quarter of 2022, ramping up to full production by the end of 2023.

“Our industry is in the midst of a generational shift from traditional vehicles to zero-emission vehicles,” stated Hino Senior Vice President of Customer Experience Glenn Ellis at the firm’s Work Truck Show event in March. “This new partnership is in line with the recent shift we have seen among other OEMs, who are looking to strong industry partners to help offset their growing research and development (R&D) investments into new ZEVs.”

Established truck makers like Hino and Texas-based Peterbilt Motors Co. (which delivered its first medium-duty EV commercial truck to a customer in Alaska in June) are trying to retain market share while startups such as Los Angeles-based Battle Motors and Canada-based Lion Electric are working to leverage EV technology to carve a niche in waste and recycling collection.

In May, Battle Motors acquired New Philadelphia, Ohio-based Crane Carrier Company LLC (CCC), which has been manufacturing commercial vehicles for 75 years.

One month later, CCC and Battle Motors delivered its battery-powered, electric refuse trucks to New York City hauler Liberty Ashes Inc. That firm’s co-owners, brothers Michael and Stephen Bellino, tied the purchase to a February 2020 executive order by New York City Mayor Bill de Blasio mandating a fully electric municipal fleet by 2040.

“[When] we started looking into [electric refuse trucks], we were looking for availability, and we really couldn’t find any,” says Michael Bellino. He says CCC “was the first [company] that came to us with an actual delivery date that wasn’t two years in the future.”

Battle Motors CEO Michael Patterson says the company is investing to keep up with what the firm calls an influx of orders from haulers throughout the U.S. “We’re delivering 120 electric refuse trucks over the next three months,” says Patterson.

He continues, “We’re going to be delivering 200 electric trucks per month in 2022. Pretty much every major city is buying one or two electric trucks; we’ve already sold out everything we could make in 2021.”

Haulers seem to have indeed expressed a willingness to experiment with EV models, with Liberty Ashes far from the only hauler or municipality having taken the plunge.

One commitment to waste collection EVs has taken place in Idaho, where J&M Sanitation, a family-owned waste and recycling business serving Kuna, Idaho, has deployed two all-electric Class 8 refuse trucks to service its collection routes.

The provider of those vehicles, BYD, says the trucks are the first battery-electric, zero-emission vehicles in Idaho and were two of only 10 in North America at the time of delivery.

Shenzhen, China-based BYD, a publicly traded company that has a U.S. office in Los Angeles and a fabrication facility in Lancaster, California, has a considerable EV presence in China.

For the U.S. market, the firm is engaging with domestic suppliers. The cabs, chassis and propulsion systems of the two trucks delivered to J&M are equipped with 31-yard automated side-loader bodies made by Princeton, New Jersey-based Amrep,

“As the waste management industry seeks to provide zero-emission trucks for the communities [it serves], J&M Sanitation is demonstrating with BYD that battery-electric trucks are ready to fully support their operations,” Aaron Gillmore, vice president of truck business at BYD, said in March when the deliveries were announced.

Commented J&M owner and CEO Tim Gordon, “As a small, family-owned company, we were able to make the change from diesel to the electric waste removal vehicles long before legislation mandated the change. I want to encourage legislators from across the country and government officials from the [U.S. Department of Energy] to consider legislation that encourages other waste removal companies to make this change sooner. If a small company like ours can make the change, larger companies can, too.”

Among those larger companies, Republic Services had at one time made a commitment to purchase up to 2,500 battery-powered trucks from Nikola Corp., which was based in its home Phoenix market.

That agreement was canceled in December of 2020 as concerns surrounding Nikola mounted, culminating in fraud charges against the company’s founder in mid-2021.

In its most recent sustainability report, Republic has not backed away from the spirit of that commitment to reduce the emissions of its fleet.

In the “Climate Leadership” section of its report, Republic says it has made a commitment to fleet electrification, and in 2020, its first electric collection truck pilot model was put into service.

Houston-based Waste Management Inc., on its website, is touting its ability to convert methane gas harnessed from landfill sites to “create renewable fuels that power our trucks.” The company says the conversion process creates fuel that can be used by CNG-powered trucks in its fleet.

As governments and a significant percentage of household consumers keep an eye on greenhouse gas emissions and commitments being made globally to reduce them, waste haulers will likely continue their research and spending on the alternative fuel vehicles they deem cost-effective and environmentally friendly.

This article originally appeared in the September issue of Waste Today. The author is a senior editor with the Recycling Today Media Group and can be contacted at btaylor@gie.net.

ABC’s Greg Sizemore says the Biden administration’s vaccine mandates may have unintended consequences for the construction industry.

COVID-19 has worn out its welcome across the globe, crossing the grim milestone of 700,000 lives lost, and humanity is more than ready to move to a post-pandemic life. Associated Builders and Contractors (ABC) recognizes that a crucial way to put this virus behind us, and to ensure healthy and safe work environments, is vaccinations.

Because healthy and safe work environments are a top priority for ABC and its members, ABC encourages its members and construction industry stakeholders to get vaccinated. In fact, a number of ABC chapters and member companies have organized and promoted educational campaigns and COVID-19 vaccination drives to accelerate the voluntary vaccination of industry stakeholders and employees. Since March 2020, ABC has created resources and toolkits for construction industry employers and employees to help reduce the risk of exposure to the virus.

ABC will continue to encourage COVID-19 vaccinations and other workplace health and safety standards, but we are concerned about the Biden administration’s announcement of two new COVID-19 vaccine policies affecting private employers of 100 more or employees and federal contractors. While the details of both policies have not been formally released, in general, ABC is philosophically opposed to federal mandates that make compliance by the regulated community impractical—if not impossible—and undermine the desired policy outcome.

Based on what we do know about the Biden administration’s new COVID-19 vaccine policies, they will have far-reaching practical implications for employers, employees and construction industry stakeholders that need to be thoroughly evaluated.

As with most industries, COVID-19 has created and accelerated a host of challenges currently facing the construction industry, which includes a skilled workforce shortage, rising material costs, supply chain disruptions, massive liquidity, wavering confidence, job site shutdowns, additional health and safety protocols and new government regulations. Many industry stakeholders look at these forthcoming vaccine rules as yet another risk and obstacle to overcome while rebuilding America’s infrastructure and communities.

The new COVID-19 vaccine policies are part of President Biden’s sweeping six-part action plan to combat the spread of COVID-19. The plan requires all employers with 100 or more employees to ensure their workers are vaccinated or tested weekly and to provide paid time off for the time it takes workers to get vaccinated or to recover if they are under the weather post-vaccination. The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) is currently developing an Emergency Temporary Standard (ETS) to implement these requirements. While OSHA has not released the details of the ETS, the agency has indicated it will be issued in the coming weeks.

The construction industry has been on the forefront of efforts to protect construction employees from the virus from the outset of the pandemic. In addition, the construction industry is classified as low risk for COVID-19 by OSHA.

As a steering committee member of the Construction Industry Safety Coalition, ABC sent a letter to James Frederick, acting assistant secretary of OSHA, voicing concerns on what is expected to be the most far-reaching standard ever issued by the agency.

The concerns listed in the letter include the industry’s ongoing workforce shortage, employee and employer obligations for vaccinations and testing, paperwork burdens, recordability of adverse reactions to the vaccine, cost of PTO for vaccinations and adverse reactions, and availability of testing kits.

In addition, President Biden signed Executive Order 14042, “Ensuring Adequate COVID Safety Protocols for Federal Contractors,” and, as directed by the order, the Safer Federal Workforce Task Force issued guidance that requires vaccination of covered federal contractor employees, except in limited circumstances where an employee is legally entitled to an accommodation. 

Prior to the release of the Sept. 24 guidance, ABC sent a letter to the Office of Federal Procurement Policy, the Office of Management and Budget and the task force on behalf of its federal contractor members with practical feedback on the executive order, which included 25 questions asked by the federal contracting community since the order’s release on Sept. 9.

For the contracting community, the task force guidance will likely result in additional compliance burdens, exacerbate the construction industry’s skilled workforce shortage and increase costs for federal contractors and taxpayers.

ABC plans to be fully engaged in the forthcoming OSHA ETS rule applying to all employers with 100 or more employees and the Federal Acquisition Regulatory Council’s rulemaking related to federal contractors. The Biden administration must ensure it fully considers all of the difficult issues involved in implementing both of these overreaching mandates as they go through the final rulemaking process.

Greg Sizemore is the vice president of health, safety, environment and workforce development at Associated Builders and Contractors.