(Vincent Rich) The International Scrap and Recycli

The international scrap and recycling
industry handbook
SRH
The international
scrap
and recycling
industry
handbook
Edited by
Vincent Rich
Wo o d h e a d p u b l i s h i n g l i m i t e d
Cambridge, England
Published by Woodhead Publishing Limited, Abington Hall, Abington
Cambridge CB1 6AH, England
www.woodhead-publishing.com
First published 2001, Woodhead Publishing Ltd
© 2001, Woodhead Publishing Ltd

The authors have asserted their moral rights.
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infringe.
British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library.
ISBN 1 85573 248 3

ISSN 1474-5259
Typeset by Best-set Typesetter Ltd, Hong Kong

Printed by Astron On-Line, Cambridgeshire, England
Contents
Preface
Contributors
Index
Introduction
Vincent Rich
A brief history of recycling
The materials balance approach to resource and recycling flows
Waste and the waste management hierarchy
Recycling flows and recycling rates
The economics of recycling
Markets and market prices
PART 1: FERROUS AND NON-FERROUS METALS

1 Aluminium
James F King
1.1 Physical characteristics, properties, products and
end-uses
1.2 Production processes and technologies
1.3 Market features, structure and operation
1.4 The structure of the scrap recovery/recycling sector
2 Copper
Martin Thompson
end-uses
3 Lead
Vincent Rich
end-uses
© Woodhead Publishing Ltd Contents / page i

Contents

4 Iron and steel

James F King
end-uses
PART 2: PRECIOUS METALS

1 Gold
Tony Warwick-Ching
1.1 Physical characteristics, properties, products and end-uses
1.3 The gold market
2 Silver
Tony Warwick-Ching
2.3 The silver market
3 Platinum group metals

Tony Warwick-Ching
3.3 The platinum group metals market
PART 3: OTHER MATERIALS

1 Plastics
John Murphy
Contents / page ii © Woodhead Publishing Ltd

Contents
2 Rubber
M E Cain, Dr P Jumpasut and P J Watson
2.4 The structure of the rubber recovery/recycling sector
3 Pulp and paper

Tom Bolton (updated and revised by Eric Kilby of the
Paper Federation of Great Britain)
end-uses
3.2 Recycling production processes and technologies
3.4 The structure of the waste recovery/recycling sector
4 Glass
David Moore
end-uses
4.4 The structure of the cullet recycling sector
PART 4: THE REGULATORY FRAMEWORK

1 The European Union
Robert Barrass and Shobhana Madhavan
1.1 The recycling industry and environmental regulation
1.2 The economic context
1.3 The definition of waste and raw material
1.4 Environmental regulation
1.5 Waste management strategy: the hierarchies
1.6 Implementation of the waste management strategy
1.7 Waste management regulations
1.8 Impacts of environmental policies on the
recycling industry
1.9 The international dimension
1.10 Conclusion
© Woodhead Publishing Ltd Contents / page iii

Preface
This Handbook is designed as a source of information and reference on

the scrap and recycling industry, which can be updated and extended on
a regular basis. It consists, initially, of a dozen Chapters each covering
a specific material, but using a similar format. These Chapters set
out the main factors surrounding the production and consumption
of each material, and describe and explain the key influences affecting
their recycling (and recovery). Additionally, the Introduction to the
Handbook provides an overview examining the broader context of scrap
generation and recycling, as well as some general issues of concern for
the industry. A final Chapter reviews current and proposed legislation
affecting the recycling industry in Europe.
Our intention is to expand the Handbook with future updates to
include chapters on additional materials and to extend the focus to spe-
cific end-product categories (for example end-of-life vehicles, electrical
and electronic equipment, used oil, textiles).
Scrap is defined by the Concise Oxford English Dictionary as
(amongst other things) ‘odds and ends, leavings; waste material’, but
this at best understates, and at worse misrepresents, its economic value
in modern societies. Recycling as a process provides the means for
generating value from scrap materials (or residuals or non-product
substances).
Recycling in its broadest sense can be taken to mean the ‘reclama-
tion of potentially useful material from household, agricultural and
industrial waste’ (Andrew Porteous, Dictionary of Environmental
Science and Technology, Wiley (2nd edn), 1997). While this remains a
good description of the fundamental process, particularly where basic
materials (or products) are involved, or where reclamation takes place
close to the point at which the waste materials are generated, it belies
its potential complexity. According to the International Reclamation
Bureau (IRB), ‘recycling is the whole system in which obsolete or redun-
dant products and materials are reclaimed, refined or processed, and
converted into new, perhaps quite different, products’. Where it takes
place at ‘off-site’ facilities, often involving the creation of vertical and
© Woodhead Publishing Ltd Preface / page i

Preface
horizontal supply networks, recycling may therefore require fairly com-

plicated organisational, commercial and technological infrastructures,
the development and functioning of which ultimately generates a signif-
icant physical and economic impact.
Preface / page ii © Woodhead Publishing Ltd

Contributors
Vincent Rich is Chair of the Department of Economics and Quantitative

Methods, and Deputy Director of the Centre for Business and
Environment at the University of Westminster. He has teaching and
research interests in business economics, environmental economics
and commodity market economics. He has published widely on
the non-ferrous metals industry and on environmental economics,
and is author of The International Lead Trade (1994), also published
by Woodhead Publishing Limited. Between 1980–88 he worked as a
Senior Consultant for CRU International in London and has
subsequently worked as a freelance consultant for CRU, and for the
Economist Intelligence Unit (EIU). Vincent has been a regular con-
tributor to the EIU’s (now quarterly) World Commodity Forecasts
since 1990.
James King received a first class honours degree in Economics from

the University of Cambridge, England in 1967 and joined the Bank
of England. After eight years working on regional economic and indus-
trial development for governments and private consultancies in the UK
and Canada, in 1978 Mr King joined Commodities Research Unit
Ltd, London, as Research Director for steel and aluminium.
Since 1980 Mr King has been an independent consultant, specialis-
ing in the economic and commercial aspects of the aluminium and steel
industries. Services include regular, in-depth reports on these industries
and special consultancy projects for clients around the world.
After working for a merchant bank and a tin smelting company,

Martin Thompson joined Rio Tinto in 1968, becoming Commercial
Adviser, and retiring in 1999. Starting in iron ore and pyrites, from
1975 he dealt mainly with base metals, specialising in copper. He has
regularly written articles on the metal, and in 1988 he undertook
for GATT the examination of the copper trade practices dispute between
the EC and Japan. He was Chairman of the British Copper Development
Association, Vice Chairman of the European Copper Institute, and
© Woodhead Publishing Ltd Contributors/ page i

Contributors
Chairman of the Statistical Committee of the International Copper

Study Group.
Tony Warwick-Ching is a principal consultant in non-ferrous metals at

CRU International in London. Since working in the mining industries of
Central Africa in the 1970s he has undertaken a wide range of consultan-
cy and publishing assignments in the mining and metals field. He has
given a number of conference papers and published many specialist
articles on non-ferrous and precious metals, and is the author of The
International Gold Trade, published by Woodhead Publishing Limited.
John Murphy has spent a lifetime writing about plastics and elastomers,
both with established journals and on a freelance basis. A graduate of
Exeter University, he began his career as a copywriter in the packaging
industry, moving after a few years to a leading plastics manufacturer. In
1961 he joined the newly launched Plastics and Rubber Weekly as
Assistant Editor, becoming Editor in 1967. He played a leading role when
a sister newspaper was set up in Germany. In 1975 he set up his own
newsletter, Plastics Industry in Europe, and in more recent years has
concentrated on freelance writing. He is the author of the book Recycling
Plastics – Guidelines for Designers and a number of other books on plas-
tics and their applications, as well as handbooks on reinforced plastics
and on additives for polymers.
Maurice Cain has spent over 50 years in the rubber industry, initially as a
research chemist and later as the head of a Publications and PR Group
for which he edited technical publications and wrote widely on the
industry. As Secretary-General of the International Rubber Study Group
1994–2000, Mr Cain was responsible to its Member Governments for the
publication of world-wide statistics on the rubber and related manufac-
turing industries as well as statistical, economic and techno-economic
studies on matters relating to the rubber industry. He now works as a
freelance contributor to several rubber trade journals.
Dr Prachaya Jumpasut graduated magna cum laude from the

University of Wisconsin, with a BBA in Economics. He later went to the
University of Michigan as a research and teaching fellow, receiving an
MA in 1979 and a Doctorate in 1981, specialising in international eco-
nomics and economic development. He was an assistant professor at
Contributors / page ii © Woodhead Publishing Ltd

Contributors
the National Institute of Development Administration in Bangkok

before joining the International Rubber Study Group in 1982. Since
then he has written extensively on a range of topics and has presented
many papers at various international conferences. He holds the position
of the Head of Economics and Statistics at the IRSG.
Philip Watson graduated in 1965 with an Honours Degree in Economics

and Statistics from Nottingham University. In 1974, prior to joining
Pirelli Ltd, he gained a Diploma in Management Services. In 1992, he
obtained the status of Chartered Statistician. Since 1979 he has been
employed at the International Rubber Study Group and is currently its
Consultant Statistician. Over the past two decades he has written and
presented many Secretariat papers for the Group.
Tom Bolton joined the paper industry in the mid-1950s and he has ac-
cumulated a lifetime of experience in the industry. He has worked in
the UK with a number of international companies and with their
subsidiaries in the UK and South Africa.
Starting as a technologist, he began work as a research and devel-
opment scientist at a time when the industry was moving from its craft
base to establish a position as a scientifically based industry. He has held
a variety of senior positions in technical, production and general man-
agement in a wide range of papermaking and converting operations
around the world.
His contacts are truly international, and with this perspective
he recently wrote The International Paper Trade published by Wood-
head Publishing Limited in 1998, and the recently published Current
Practice in Environmental Reporting: The Chemicals Industry
(Woodhead Publishing Limited 2001).
David Moore is Managing Editor at the Society of Glass Technology, an

international learned society concerned with glasses of any and every
kind. He is responsible for the overall running of the society as well as for
production of the journals Physics and Chemistry of Glasses and Glass
Technology, books and conference proceedings. He is a regular contrib-
utor to Glass Technology and SGT News and has developed the society’s
electronic publications and web presence, www.sgt.org. The Society of
Glass Technology is the host of the 19th International Congress on Glass,
the triennial gathering of leading artists, scientists and technologists.
© Woodhead Publishing Ltd Contributors / page iii

Contributors
Robert Barrass is an economic consultant with over 20 years’ experi-

ence in the environmental field. He previously worked for the UK
Department of the Environment and The European Commission, and
has also served as an adviser to the government of Poland on envi-
ronmental management. His expertise includes development and
assessment of environmental policies, legislation and programmes,
regulations and economic instruments, and appraisal of infrastruc-
ture projects. He has contributed to waste management strategies in the
context of the European single market, studies of economic and
employment impacts of environmental measures, and assessment of
environmental liability regimes and charging and taxation systems.
He has published a number of papers in these areas, and is also co-
author of European Economic Integration and Sustainable Devel-
opment, published in 1996.
Shobhana Madhavan is Professor, and Director for the Centre for

Business and Environment, at the University of Westminster. A mem-
ber of the Chartered Institute of Transport and a Councillor for
the Environment Council, she has an extensive track record of research
in transport and business economics. This includes pioneering work
on transport and travel behaviour in developing countries, and studies
of technology transfer and environmental issues relating to the mo-
tor vehicle industry. She has been a European Community Jean Mon-
net Scholar, a visiting scholar at the Transport Research Laboratory and
the Indian Institute of Management and a specialist adviser to the House
of Lords Select Committee on the European Communities. She has writ-
ten numerous publications in the fields of environment and transport,
and is co-author of European Economic Integration and Sustainable
Development.
Contributors / page iv © Woodhead Publishing Ltd

Index
Entries are in the form Section/chapter/page number
aluminium remelted scrap ingot (RSI), 1/1/23

castings, 1/1/19, 1/1/29 secondary alloy, 1/1/14–15
competing materials, 1/1/1 secondary industry structure
conductivity, 1/1/3 billet plants, 1/1/7
consumption, 1/1/2, 1/1/30 semi-finishing plants, 1/1/7
dross, 1/1/15–16 trade in scrap, 1/1/23–24, 1/1/31
end-uses aluminium alloy
historical evolution, 1/1/4 LME contract, 1/1/18, 1/1/28
semi-finished, 1/1/15 Aluminium Association
energy requirements, Intro/20 alloy specifications, 1/1/14–15
grades, 1/1/6 American Metal Market, 1/3/23
Hall-Heroult process, 1/1/6 Asahi Glass, 3/4/5
LME Contract, 1/1/15, 1/1/18 Association of Plastic Manufacturers in
‘mini-mills’, 1/1/13 Europe (APME), 3/1/15–16
new scrap AtoFina (formerly Elf Aquitaine), 3/1/12
industrial, 1/1/10–11, 1/1/20 Australian Gold Refineries, 2/1/11
internal, 1/1/9–1/1/10 Austrian Institute of Applied Systems
old (post consumption) scrap Analysis (IIASA), 3/3/15
availability, 1/1/20–22, 1/1/30 autocatalyst (see Platinum group metals)
beverage cans (see also UBC)
US recycling, 1/1/11–13 Basel Convention, Intro/8, 1/3/20–21,
Western Europe, 1/1/12 1/3/24, 4/1/5, 4/1/11, 4/1/16–18
collection schemes, 1/1/22–23 basic oxygen furnace (BOF), 1/4/6
foil, 1/1/15 Battery Council International (BCI),
processing costs, 1/1/21 1/3/19
recycling rates (UK), Intro/15–18 Bergsoe process, 1/3/8, 1/3/9
regulation, 1/1/22–23 BLIC (Liaison Office of the Rubber
price relationships Industry of the EU), 3/2/13
historical trends, 1/1/24–25 British Metals Federation (BMF), 4/1/7,
representative, 1/1/24, 1/1/28–29 4/1/15
secondary, Intro/24–25, 1/1/18, British Plastics Federation (BPF), 3/1/15
1/1/32–33 Bronze Age, 1/2/1
production
major secondary producers, carbon steel, 1/4/1
1/1/16–17, 1/1/20 catalytic convertors, 2/3/3
primary, 1/1/6 Chalcolithic (copper) period, 1/2/1
secondary production trends, Chicago Board of Trade (CBOT),
1/1/18–20 Intro/31
products ‘climate change’ levy, 4/1/15
specification, 1/1/6, 1/1/26–27 coal
properties, 1/1/1–4 (metallurgical) coking, 1/4/10
© Woodhead Publishing Ltd Index / page i

Index
pulverised coal injection (PCI) usage, by country, 1/2/11, 1/2/13

(see steel, blast furnace trade
technology) blister (and anode), 1/2/8
Cobat, 1/3/24 scrap, 1/2/15–17
coke Copper Development Association (CDA),
markets, 1/4/11 1/2/3
production, 1/4/10–11 Corex process, 1/4/13
Comex contracts, 1/2/9 Cost-benefit analysis, Intro/10,
Company Francaise des Ferailles, 1/4/29 Intro/22–23
composting, Intro/10 CRU International, 1/2/3
Consolidated Gold Fields, 2/1/5–6, 2/1/12 cullet (see Glass)
(see also Gold Fields Mineral Services)
Coors, 3/4/12 Degussa, 2/1/11
Coopers & Lybrand, Intro/23 DETR, Intro/7, Intro/10, Intro/23,
copper Intro/24, Intro/32, 4/1/3, 4/1/11
brass, 1/2/2 direct-reduced iron (DRI)
bronze, 1/2/2 competiveness of, 1/4/15, 1/4/25
blister (and anode), 1/2/5, 1/2/8 prices, 1/4/33–36
cathodes, 1/2/6 process technology, 1/4/7, 1/4/16–17
concentrates DSD Dual System (Germany) (see also
specification, 1/2/5 German Packaging Ordinance),
trade, 1/2/7–8 3/1/17, 4/1/12
conductivity, 1/2/2 DSM, 3/1/13
consumption statistics, 1/2/9
electro-refining, 1/2/5 Economist Intelligence Unit (EIU),
energy requirements, Intro/20 1/3/15
end-uses ECOTEC, Intro/32
semi-fabricated, 1/2/3 Electric Arc Furnace (EAF) (see steel
wire, 1/2/3 production technology)
extraction electrical and electronic product recycling,
hydrometallurgical, 1/2/5–6 3/1/16
pyrometallurgical, 1/2/4 end-of-life vehicles (ELV), 1/1/17, 1/4/19,
geology, 1/2/4 1/4/30, 3/1/16, 3/4/10
matte, 1/2/5 Engelhard, 2/1/10
new scrap Enichem, 3/1/9
availability, 1/2/10, 1/2/13 Environment Agency (UK), 4/1/6–7
old scrap Environmental policy, impact on EU
sources, 1/2/11 recycling industry, 4/1/15–16
supply sensitivity, 1/2/13–15 European Aluminium Association,
price relationships, 1/2/10, 1/2/17 1/1/12
production European Coal and Steel Community
mine, 1/2/6–7 (ECSC), 4/1/6–7
refined, 1/2/7 European Glass Container Federation,
product lifecycles, 1/2/13 3/4/9
properties, 1/2/1–2 European Union (EU)
raw materials, 1/2/11 barriers to use of recycled materials,
scrap 4/1/3–4
contractual provisions, 1/2/17–18, control of effluent discharges, 4/1/8
1/2/23–24 environmental action programme,
price trends (US), Intro/32 4/1/3
recycling arrangements, 1/2/15 Environmental Management and Audit
specifications, 1/2/18–23 Scheme, 4/1/9
Index / page ii © Woodhead Publishing Ltd

Index
policy on landfill, 4/1/4 production

waste definition(s), 4/1/4–7, 4/1/17 EU, by sector, 3/4/4
waste hierarchy, legislative framework, costs, 3/4/4
4/1/9–10 glass containers in Western Europe,
waste management 3/4/6
permits and licenses, 4/1/14 production technology, 3/4/3, 3/4/4
regulatory measures, 4/1/11 properties, 3/4/1
waste shipments (see also Basel recycled content, by colour (UK),
Convention) 3/4/10
green, amber and red lists, types, 3/4/2
4/1/14–15 gold
European Union (EU) Directives consumption statistics, 2/1/2
batteries and accumulators, 4/1/12 end uses
definition, 4/1/1 coinage, 2/1/1, 2/1/8
disposal of end-of-life vehicles, 3/4/10, electronics, 2/1/2, 2/1/8
4/1/12–13 jewellery, 2/1/1–2, 2/1/8
integrated pollution prevention and Miller process, 2/1/4
control, 4/1/7–8 pricing
packaging and packaging waste, refined metal, 2/1/5
3/1/17, 4/1/12 scrap, 2/1/13
Exide, 1/3/11, 1/3/24 production
externalities, Intro/23, Intro/32 refining industry, 2/1/3, 2/1/11
refining technologies, 2/1/3–4
futures contracts and markets, secondary, by region, 2/1/12
Intro/28–29, 4/1/3 properties, 1/2/2, 2/1/1
recycling chain, 2/1/3, 2/1/10–11
German Packaging Ordinance, 3/1/17–18, scrap
3/1/19 classification, 2/1/3, 2/1/7–10
glass international trade, 2/1/13
bottle banks supply influences, 2/1/5–7
growth in UK, 3/4/11 specifications, 2/1/4, 2/1/5
colour, 3/4/2 treatment/refining charges, 2/1/13
composition, 3/4/2 Gold Fields Mineral Services (GFMS),
cullet 2/1/12
availability, 3/4/7 Guardian Industries, 3/4/5
definition, 3/4/5
energy savings, 3/4/5–6, 3/4/7 Hamersley Iron (HiSmelt process), 1/4/13
foreign (external), 3/4/8 Handy & Harman (see Silver, pricing)
impurities, 3/4/6–7, 3/4/9–10 Her Majesty’s Stationery Office (HMSO),
internal, 3/4/8 3/3/3–4
intenational trade, 3/4/12 Hybrid vehicles, 1/3/24
pricing arrangements, 3/4/12
recycling rates, 3/4/8, 3/4/9, Impact electric car (GM), 1/3/24
3/4/11 incineration, Intro/10, Intro/24
end uses, 3/4/1 independent cast houses
flat glass, 3/4/3, 3/4/8–9 aluminium, 1/1/7
flint, 3/4/8 Institute of Scrap Recycling Industries
glasphalt, 3/4/7 (ISRI), 1/2/17, Intro/32
industry structure International Copper Study Group (ICSG),
containers, 3/4/5 1/2/13
flat glass, 3/4/14–15 International Institute of Synthetic Rubber
natural occurrence (as obsidian), 3/4/1 Producers, 3/2/1
© Woodhead Publishing Ltd Index / page iii

Index
International Lead and Zinc Study Group production

(ILZSG), 1/3/4, 1/3/5, 1/3/10, energy requirements, 1/3/9
1/3/14, 1/3/15, 1/3/18, pattern of secondary, 1/3/25
1/3/20–21 primary, 1/3/24
International Reclamation Bureau, secondary flowchart, 1/3/8
Preface/1 share of secondary, 1/3/13–15
International Rubber Study Group (IRSG), technologies, 1/3/8–9
3/2/2 properties, 1/1/2, 1/2/2, 1/3/1–2
iridium, 2/3/1 raw materials, 1/3/13–15
iron refining technologies, 1/3/9
cast iron, 1/4/5 remelt, 1/3/13, 1/3/17–18, 1/3/26
direct reduced iron (DRI), 1/4/6, 1/4/7, scrap
1/4/8, 1/4/14–16 categorisation, 1/3/16
primary iron, 1/4/7 collection chain, 1/3/18–19
iron ore, 1/4/7, 1/4/10 definition as waste, 1/3/21
Isasmelt process, 1/3/9 international trade in, 1/3/20–21
processing costs, 1/3/9
Jaako Pophry, 3/3/14 representative scrap prices,
Johnson Matthey, 2/1/11, 2/3/4, 2/3/5–6, 1/3/22–23
2/3/8, 2/3/10 sources, 1/3/16
supply elasticity, 1/3/17, 1/3/22
Kivcet process, 1/3/8, 1/3/9 supply responsiveness (elasticity),
1/3/12–13
landfill, Intro/10, Intro/23 (see also waste toxicity, 1/3/2
hierachy) life cycle assessment (LCA), Intro/10,
lead 4/1/10–11
antimonial, 1/3/8 London Bullion Market Association
batteries, lead-acid (LBMA)
lifetimes, 1/3/7, 1/3/17 gold pricing, 2/1/5
recycling rates, 1/3/17, 1/3/19 silver pricing, 2/2/4
recycling schemes, 1/3/17, London Metal Exchange (LME), 1/1/15,
1/3/19–20 1/1/18, 1/2/10, 1/3/12
technology, 1/3/6–7
weight, 1/3/6 market failure (see Recycling)
bullion, 1/3/8–9 materials balance approach, Intro/3–5
consumption materials conservation, Intro/5
influences on, 1/3/5 Matsushita, 1/3/11
trends by end-use, 1/3/3–4 Metal Bulletin, 1/3/22–23
electric vehicles, 1/3/24 Metaleurop, 1/3/24
end uses Metallstatistik, 1/3/24
by country, 1/3/5 Metals Week, 1/2/17, 1/3/12, 1/3/23
historical development, 1/3/2–5 Meyer-Parry case, 4/1/6–7
industrial sectors, 1/3/2–3 Midrex, (see DRI process technology)
energy requirements, Intro/20 Miller process, (see Gold)
geology, 1/3/7–8 Municipal Solid Waste (MSW)
industry structure composition, by country, Intro/13
battery industry, 1/3/11–12 controlled waste, Intro/6
concentration, 1/3/10–11
secondary sector, 1/3/10 National Packaging Protocol (Canada),
North American Producer Price 3/1/19
(NAPP), 1/3/12 natural rubber (hevea brasiliensis), 3/2/1
product lifecycles, 1/3/7 Nymex, 2/3/4
Index / page iv © Woodhead Publishing Ltd

Index
obsidian (see glass, natural occurrence) end uses, 3/1/2–4

Organisation for Economic Co-operation engineering (or technical) plastics,
and Development (OECD), 3/1/10, 3/1/19
1/3/20–21, 4/1/5, 4/1/17 feedstocks, 3/1/4
osmium, 2/3/1 high performance plastics, 3/1/11
Owens-Illinois, 3/4/5 industry location, 3/1/7–8
PET, 3/1/8, 3/1/14, 3/1/20
Packaging (waste) Recovery Note (PRN), properties, 3/1/1
3/4/12–13 polymerisation process, 3/1/4
palladium polyvinyl chloride (PVC), 3/1/3, 3/1/8,
availability from scrap, 2/3/5–8, 3/1/18
2/3/10 processing techniques
consumption by end use, 2/3/2–3 extrusion, 3/1/6–7
Pamp, 2/1/11 moulding, 3/1/5–6
paper recycling
end uses, 3/3/2 feedstock (or chemical), 3/1/14,
industry characteristics, 3/3/1–2, 3/1/16
4/1/2 industry structure in EU, 4/1/2
production processes legislation, 3/1/12, 3/1/16–19
deinking, 3/3/8–10 mechanical, 3/1/12–13, 3/1/16
removal of contraries, 3/3/7–8 rates, 3/1/9, 3/1/15–16
recycled fibre (RCF) waste to energy, 3/1/14
definitions, 3/3/3–4, 3/3/5 scrap
usage, 3/3/3, 3/3/6 market development, 3/1/19–20
utilisation by region, 3/3/13–14 new (process), 3/1/11
utilisation forecasts, 3/3/14–15 post-consumer, 3/1/12
recycling chain, 3/3/10, 3/3/12 thermoplastics
‘urban forest’, 3/3/10–11 commodity plastics, 3/1/8
virgin fibre, 3/3/4 consumption, by region, 3/1/9
wastepaper consumption, by type, 3/1/10
broke, 3/3/4 main forms, 3/1/2
classification, 3/3/5 production, by region, 3/1/9
costs and benefits of recovery from production, by type, 3/1/10
MSW, Intro/22–23 thermosets, 3/1/2
industrial, 3/3/4 platinum
municipal solid waste (MSW) in availability from scrap, 2/3/5–8,
USA, 3/3/11 2/3/10
optimum recycling, Intro/23, 3/3/15 consumption by end-use, 2/3/1–2
post-consumer, 3/3/4 platinum group metals (pgm) (see also
pricing arrangements, 3/3/17–18 individual metals, platinum,
price trends (US), Intro/29–30 palladium, rhodium, osmium,
trade patterns, 3/3/15–17 iridium and ruthenium)
UK standard groups, 3/3/5 autocatalyst recycling rates, 2/3/5–8
Paper Federation of Great Britain, 3/3/3, end uses, 2/3/3
3/3/5 pricing arrangements
pig iron, 1/4/6, 1/4/8–10, 1/4/32 refined metal, 2/3/4–5
Pilkington, 3/4/3, 3/4/5 scrap, 2/3/11
plastics properties, 2/3/1
additives, 3/1/2 recycling arrangements, 2/3/9–11
calendering (see processing techniques, recycling ratios, 2/3/8
extrusion) recycling technology, 2/3/4
classification, 3/1/1 trade in scrap, 2/3/11
© Woodhead Publishing Ltd Index / page v

Index
posco, 1/4/3 international trade, 3/2/13–14

PPG Industries, 3/4/5 natural
product characteristics, Intro/14, pricing, 3/2/5
Intro/19 trading arrangements, 3/2/5
Producer Responsibility Obligations production
(Packaging Waste) Regulations by region, 3/2/4
(UK), Intro/37–39, 3/4/12 properties, 3/2/1
protocol, 1/3/24 reclaimed, 3/2/11
Proximity principle, Intro/8 scrap
pulp, (see paper, virgin fibre) availability, 3/2/6, 3/2/8
Pulp and Paper International, Intro/32 chemical recovery, 3/2/7, 3/2/11
Pulp and Paper Week, 3/3/17 tyre dumps, 3/2/7
synthetic
QSL process, 1/3/9 trading arrangements, 3/2/5–6
Quexco, 1/3/24 world capacities, 3/2/1
tyre
Rand Refinery, 2/1/11 arisings, 3/2/7–8, 3/2/9
raw material, definition, 4/1/5 composition, 3/2/3–4
recycling energy recovery (TDF), 3/2/12–13,
definition, Intro/1 3/2/14
diminishing returns, Intro/8 life cycle, 3/2/8
energy requirements, Intro/20 product life extension, 3/2/9–10
external benefits, Intro/23 reuse, 3/2/9
external costs, Intro/23 waste disposal
history of, Intro/1–3 legislation, 3/2/7, 3/2/13
market failure and, Intro/23–24 rubberised asphalt, 3/2/12
optimal level of, Intro/22–25 thermal decomposition, 3/2/12
recycling industry thermal disposal, 3/2/12–13
size, Intro/2–3 ruthenium, 2/3/1
structure, Intro/25–27, 4/1/2
recycling rates Saint Gobain, 3/4/5
by material and product, Intro/17 scrap (see also individual materials)
calculation, Intro/17–18 definition, Intro/1
factors affecting, Intro/13–15 merchants, Intro/26
Recycling World, 4/1/7, 4/1/16 supply elasticity, Intro/12
Refuse-Derived Fuel (RDF), 3/1/15 trade, Intro/3–4
Renco Group, 1/3/24 types
residuals (see Scrap) Home (Revert), Intro/11
resources manufacturer’s (process/prompt),
non-renewable, Intro/4 Intro/12
renewable, Intro/4 old, Intro/12
Returbatt, 1/3/24 secondary billet plants (see independent
reuse, definition, Intro/12–13 cast houses)
rhodium secondary materials
availability from scrap, 2/3/5–8 availability, Intro/15
consumption by end use, 2/3/3 markets development, Intro/28
Royal Canadian Mint, 2/1/11 prices, Intro/28–29
rubber silver
consumption consumption statistics, 2/2/1–3
by region, 3/2/4 electrolytic refining
end-uses and products, 3/2/2 moebius process, 2/2/3–4
granulated, 3/2/10 Thum-Balbach process, 2/2/4
Index / page vi © Woodhead Publishing Ltd

Index
end uses, 2/2/2–2/2/3 price relationships

pricing, 2/2/4 forecast, 1/4/35–36
production, 2/2/9 historical trends, 1/4/33–34,
properties, 1/2/2, 2/2/1 1/4/44–47
recycling chain, 2/2/8–9, 2/2/10 representative, 1/4/32–35, 1/4/43
recycling economics, 2/2/10–11 production, by process, 1/4/22–24,
scrap 1/4/38–41
forms, 2/2/7–8 properties, 1/4/1–3
international trade, 2/2/10 scrap industry structure, 1/4/28–30,
sources, 2/2/3–4, 2/2/5–6 4/1/2
supply influences, 2/2/5, 2/2/7 semi-finished products (semis),
Silver Institute, 2/2/2, 2/2/10 1/4/3–4
Society of Motor Manufacturers and Siemens-Martin process, 1/4/7, 1/4/8,
Traders (SMMT), 1/3/24 1/4/22
sol-gel process (see glass, production specifications, 1/4/37
technology) stainless, 1/4/1
starting-lighting-ignition (SLI) batteries tinplate (see Finished steel products)
(see lead, batteries) trade in scrap, 1/4/25–26, 1/4/30–32,
steel 1/4/4
alloy, 1/4/1 sustainable development, Intro/3
blast furnace technology
feed materials, 1/4/10–13 Texasgulf, 2/3/10
pulverised coal injection (PCI), thermodynamics, laws of, Intro/3, Intro/14
1/4/11–13 tinplate (see steel)
cold-rolled (CR) coil (see finished steel Tocom, 2/3/5
products) Tombesi judgement (see also EU, waste
competing products, 1/4/2 defined), 4/1/6
crude steel, 1/4/6, 1/4/18 trading centres (see under individual
downstream products, 1/4/5 materials)
end-uses
demand influences, 1/4/5–6 UBC recycling plants, 1/1/7, 1/1/8
energy requirements, Intro/23 United Nations Conference on Trade and
external scrap Development (UNCTAD), 1/3/21
availability, 1/4/26–28 US Aluminium Association
new industrial, 1/4/18–19, 1/4/22 alloy designation, 1/1/6, 1/1/14
old scrap, 1/4/19–22 US Bureau of Labour Statistics, Intro/29,
pricing arrangements, 1/4/32 Intro/30, Intro/32
relative importance, 1/4/24–25 US Environmental Protection Agency (US
requirement for, 1/4/17, 1/4/23, EPA), Intro/8, 3/3/11, 4/1/9
1/4/25 US Geological Service, 2/2/10
scrap products, 1/4/20 US Highway Bill (ISTEA), 3/2/12
tramp elements, 1/4/21–22 US Scrap Tire Management Council,
foundry pig iron, 1/4/9–10 3/2/14
finished steel products, 1/4/4 Used Tyres Project Group of the European
galvanised (see finished steel Comission, 3/2/13
products) Usinor, 1/4/29
hot-rolled (HR) coil (see Finished steel
products) Varta, 1/3/11
internal scrap, 1/4/17–18, 1/4/26 vehicles in use, 1/3/15, 1/3/14
new ironmaking technology ‘Valorisation’, 3/1/18
Corex process, 1/4/13 Virgin material, Intro/11, Intro/19
HISmelt process, 1/4/13 virtual metals, 2/1/2, 2/2/2, 2/3/8
© Woodhead Publishing Ltd Index / page vii

Index
waste Wavin Re-use, 3/1/13

classification, Intro/9 Worldwatch Institute, Intro/4
defined, Intro/8, 4/1/4–7, 4/1/17
restrictions on trade (see under Yuasa, 1/3/11
individual materials, Basel
Convention and EU) zinc
waste to energy (WTE) recycling (see energy requirements, Intro/20
plastics recycling) properties, 1/1/2, 1/2/2
waste management hierarchy, Intro/8–9
Index / page viii © Woodhead Publishing Ltd

Introduction
Vincent Rich
The materials balance approach to resource and

recycling flows

The problem of waste
The waste (management) hierarchy

Scrap generation and recycling flows
Home (or revert) scrap
New (prompt industrial or process) scrap
Old (commercial or post-consumer) scrap
Re-use
Influences on recycling rates
Material characteristics
Substitutability of secondary (scrap) and primary raw
materials as production inputs
Product markets
Environmental awareness and government regulations
Measuring recycling rates

Recycling decisions and recycling efficiency
Producer recycling (resource use) decisions
Product purchase and discard decisions
The optimal level of recycling
The structure of the recycling industry
Notes
References
© Woodhead Publishing Ltd

The reuse and recycling of materials by societies has a long history,

stretching back to the time when man first produced objects for orna-
mentation or tools and articles for use. The intrinsic value of these arte-
facts compared to individual income and wealth, the relative difficulty
and high cost of obtaining virgin materials or replacement products,
would have made reuse, recovery or recycling an economic and physical
necessity.
While for much of human history recycling will have remained
largely a local, craft-based or ‘industry’, some ‘waste’ materials (like
glass and precious metals) were already subject to long distance trade
over 2000 years ago. Early recycling activities would have been small in
scale and limited to materials and products that could be directly re-
used or were technically fairly easy to recover.
The period prior to industrialisation in England has been
described as ‘a golden age of recycling’. Materials like clothing, roofing
lead, bricks and building stone, and other metals were invariably recov-
ered and used again. Fabrics (such as rags) were recycled to produce
paper,1 an activity that continued well into the nineteenth century,
undermined only by the development of the means to produce paper
efficiently from wood.
Following the Industrial Revolution in Europe and North America,
and the development of more sophisticated technologies for the pro-
cessing of metals and other materials, the underlying potential for recy-
cling increased. This period also witnessed the development of growing
regional and international trade in scrap.
The emergence of organised forward and futures markets from
the mid-nineteenth century onwards, and published reference prices,
will have helped support the development of markets for secondary
materials and products, and the evolution of a recycling industry, as
such.
During the first half of the last century, however, technological
innovation, including developments in processing and transportation,
also increased the accessibility (and reduced the cost) of virgin ores and
materials, and facilitated their movement to centres of consumption. At
the same time, increasing wealth undermined the incentive to recycle,
while the introduction of new materials and more sophisticated prod-
ucts, and trends towards miniaturisation and economisation in materi-
© Woodhead Publishing Ltd Introduction / page 1

Introduction
al usage, gradually made recycling a more technically-demanding (and

increasingly costly) undertaking. Nevertheless, the recycling industry
not only survived, but expanded and became increasingly diversified
in the second half of the twentieth century, and for sound economic
reasons.
The recycling of wastepaper, for instance, began (tentatively) in
the 1960s and 1970s because of growing shortages of economically
accessible virgin fibre; the OPEC-induced oil price rises of the 1970s
also stimulated recycling activity across of range of materials, and gave
impetus to the further development of plastics recovery technology. The
underlying economics of materials recycling are closely linked to devel-
opments in primary (virgin material) markets, both overall supply and
demand conditions, and the evolution of commodity prices.
Apart from earlier episodes of economic dislocation (war, trade
sanctions, etc), direct government interest in recycling (reflecting grow-
ing political pressures) only really emerged in the 1960s. This interest
has evolved from one based around materials conservation (and worries
about resource depletion) to a focus on the perceived environmental
benefits (in terms of reduced pollution) of recovering and re-using
discarded products or waste materials.
Recycling, together with other forms of recovery and re-use, is now
high on the political agenda, largely as a result of the pressure emanating
from heightened consumer concerns. In addition, the intrinsic cost sav-
ings and potential competitive advantages associated with recycling are
now more widely recognised by business, partly because the changing
legislative environment has forced them to view it as such. The manage-
ment of waste has been transformed as an economic activity in recent
years, and is now a large scale, international undertaking in its own right
in terms of both the flow of resources it represents and the employment
it generates. The scrap and recycling industry is an important, and
rapidly expanding, part of this.2
Despite these structural changes, however, household repair and
re-use of products together with ‘informal’ recycling networks (now
increasingly driven by altruism, rather than economic necessity) remain
important, as do the activities of small scrap traders and merchants. This
is particularly the case in developing countries, where the dynamics of
the recycling process are markedly different from in the West.
A distinction needs to be drawn, however, between the generation
and collection of residual materials on the one hand, and the actual util-
Introduction / page 2 © Woodhead Publishing Ltd

Introduction
isation of these materials in the production process on the other. While

material utilisation processes in developing countries are fundamen-
tally the same as in industrialised countries, the motivation to recover
materials from the various waste streams is very different. ‘Recovery in
most developing countries is mainly a market driven phenomenon with
a comprehensive domestic trade system. It is expanding and developing
rapidly without any government support. In contrast, . . . in the industri-
alised world . . . public participation and government involvement play a
much more important role’.3
Governments certainly now take a more pro-active role, both
nationally and through international forums and treaties. They are
increasingly recognising the need to adopt systematic policies towards
the environment and, reflecting the current focus on ‘sustainable devel-
opment’, this has included an increased emphasis on waste manage-
ment and recycling activities. There is particular concern over the vast
(and increasing) amounts of waste materials (redundant products,
components, chemicals, etc) generated in the course of economic activ-
ity, both by producers and consumers. The worry is that this waste may
give rise to irreversible damage to the global natural environment and so
adversely affect future physical and economic well-being.
The materials balance approach to resource and

recycling flows
The process of production and consumption in modern

economies inevitably gives rise to pollution or waste which requires
(proper) disposal. The links between economic systems and the natural
environment in which they are embedded and on which they rely are
complex, but can be described (and explained) using the materials
balance approach4 which builds on the first and second laws of ther-
modynamics. Using this approach, the various interactions between
economy and environment (and vice versa) can be readily appreciated
and analysed (see Fig. 1).
Two aspects of the laws of thermodynamics are particularly impor-
tant in the broader context of recycling, which we will develop further
later: (1) All resource extraction, production and consumption activities
(including recycling operations themselves) eventually give rise to
waste products (residuals) equal in matter/energy terms to the resources

Introduction
Environment as supplier of natural

resources
I Q
Extraction Basic processing Fabrication Consumption
IS
Non-product
outputs
IRT Modification
activity QW
IRT
RECYCLING
WP
WPR
Environment as waste Environmental damage
receptor (pollution)
I = primary material and energy inputs

IS = secondary (recycled) inputs
IRT = primary inputs for recycling and/or modification processes
WP = residuals requiring disposal
WPR = residuals generated during treatment and/or recycling processes
Q = final product output
QW = residuals from consumption
1 The materials balance framework. Source: adapted from Turner, Pearce and
Bateman (1994).
flowing into these sectors (i.e. I = WP + WPR + QW); and, (2) Complete
recovery or recycling of these waste products (residuals) is impossible
because of material losses; Solow5 has likened the process to that of the
multiplier in macroeconomic theory and this seems a useful analogy.
Further, because of diminishing returns, the closer recovery approaches
100%, the greater the cost (in financial or energy terms) of each incre-
mental increase.
In the context of recycling, a distinction can usefully be drawn
between renewable and non-renewable materials or natural resources.
Renewable natural resources are those (like timber) that are normally
replenished naturally at a measurable rate, but may be prone to over-
use or alternatively recyclable to some degree. Non-renewable (or
depletable) natural resources (like metals or fossil fuels), on the other

Introduction
hand, are essentially finite in quantity. The total quantity available will
not be known, however, and the resource base may be greatly expanded
by recycling or recovery (where production processes or end-product
usage allows).
Materials and energy (I ) are drawn into the economic system from
the environment, are processed and (physically and/or chemically)
transformed into products (Q) that are then distributed to their point of
consumption or usage. At various stages in the process (and at varying
intervals) ‘non-product’ or intermediate outputs will be partially recy-
cled, with residual materials (wastes) returned to the natural environ-
ment (WP). Eventually, end-of-life products also form part of the waste
‘stream’ (QW) which needs to be effectively managed.
The materials balance approach suggests that ultimately the key
concern should be reducing the amount of virgin or primary natural
resources (I) drawn into the economic system (or materials conserva-
tion). The quantity of resources required can be reduced in one of two
broad ways:
1 By reducing economic activity itself, or the materials intensity of

that activity (the amount of materials used per unit of production
or consumption). The former may prove to be problematic,
politically. The latter could be achieved by altering the overall mix
of goods and services produced, or by cutting the materials
intensity of individual products.
2 By increasing the re-use or recycling of materials from the waste
stream. This may require changes in the pattern of incentives and
penalties facing economic agents i.e. (firms/organisations or
households), technological modification or improved information
flows.
The problem of waste
Waste can be broadly defined as ‘any substance or object which the

holder discards or intends or is required to discard’.6 However deciding
whether an item or material is in practice waste or not (and at what stage
waste again becomes a resource) can be difficult because of the almost

Introduction
infinite range of materials and disposal points involved. Often it can

only be determined on a case-by-case basis, sometimes through
recourse to the law, and the issue remains subject to widespread and
continuing debate.
There are also problems related to the classification of waste itself.
Fundamentally, waste can be categorised according to its origin
(domestic/industrial, etc), form (solid/liquid/gaseous) or properties
(inert/toxic), but government agencies also develop their own classifi-
cation systems for waste management purposes. At this stage it is prob-
ably most useful to categorise waste arisings on the basis of their origin.
Controlled waste includes most industrial, commercial and municipal
solid waste (MSW); there is a separate category of special or hazardous
wastes. The latter are, as one might expect, strictly monitored and their
disposal is very tightly regulated. Finally, there are large quantities of
agricultural waste (largely organic matter), construction (demolition)
wastes, mining (and quarrying) wastes and sewage sludge which are
usually not directly covered by waste management legislation. The main
focus of recycling activities has been on so-called controlled wastes, i.e.:
1 industrial waste (from factories and industrial plants)

2 commercial waste (from wholesalers, catering establishments,
shops and offices)
3 municipal (solid) waste (collected by or on behalf of the local or
municipal authority, mainly from households)
Partly as a result of definitional problems and partly reflecting a

lack of government emphasis on systematic waste management
policies, available data (by country) on the volume, source and forms of
waste generated is far from comprehensive, and of variable quality.
Legislation has now been enacted in the EU proposing the development
of a new database on waste, which is proceeding. As part of this exercise,
Eurostat (a European statistical agency) has recently published data on
waste arisings and management in Europe, based on a questionnaire
developed and applied in conjunction with the OECD. This shows that
the amount of MSW generated in Western Europe amounted to approxi-
mately 190 million tonnes per year (or some 400–500kg per person) in
the mid-1990s. Separate studies have shown that MSW generation in
Europe is closely correlated with economic growth, but that overall
waste production rose much more than GDP growth in the 1990s. Per
capita MSW arisings in the EU increased by roughly 2% per year (or by

Introduction
Table 1 Estimated controlled waste arisings in England and Wales

Source Volumes
Commercial and industrial waste1 Total volume: 70–100 million tonnes 30% from
commerce; 70% from industry 35% recycled/re-
used; 50% to landfill.
Municipal waste2 Total volume: 27 million tonnes 90% from
households (22 kg per household per week, 1.14
tonnes per year) 8% collected for
recycling/composting; 85% disposed of to landfill.
Note: 1. Based on a national survey undertaken by the Environment Agency between

October, 1998–April, 1999.
2. From 1997/98 annual survey undertaken by Local Authorities.
Source: ‘A way with waste’, DETR, June, 1999.
about one third in total) between 1985 and 2000. Waste management,
however, remains dominated by landfill and incineration rather than
recycling (and composting). Only in Austria, Denmark, Germany, the
Netherlands and Sweden has any major progress been made in switch-
ing from landfill and towards recycling, at a rate which exceeds the
underlying growth in MSW.7 Recycling rates for MSW in these countries
ranged between 23–39% in the late-1990s; if composting is inlcuded, the
recovery rates achieved were between 28–48%. Table 1, which provides
more detailed data on controlled waste for England and Wales indicates
a MSW recycling (and composting) rate of only 8%. Recycling of com-
mercial and industrial waste is somewhat higher, as one would expect, at
about 35%, but the volumes involved are also much greater (with 70–100
million tonnes of this waste being produced annually, three or four
times that of MSW).
Waste generation has been increasing faster in North American
than in Europe (at some 3–4% per year) since the 1960s, but both the
USA and Canada have been more successful at expanding the amount of
this that is recycled, rather than simply dumped in landfill. Recycling
initiatives and waste diversion targets have been in place in most states
since the early 1980s, and there are well-developed community-based
recycling schemes in many areas. One problem in terms of consistency
(both between states and internationally) is that there is no commonly
accepted definition of MSW in North America; in particular there is
significant variation across states and provinces in terms of how
much commercial and industrial waste is included.

Introduction
Figure 2, shows the US Environmental Protection Agency’s (EPA)

estimate of the growth of MSW in the USA between 1960 and 2000, both
in total and on a per capita basis. Although the amount of waste generat-
ed per person has stabilised in recent years, it is still (at over 700kg/per
year) far greater than in Europe. Over the same period, the recycling rate
for MSW has risen from about 6% to over 30%, with many states now
achieving rates of 40–50%.
Most industrialised countries are facing increasing difficulty
in disposing of the waste they generate, either because of a physical
shortage of landfill sites which meet acceptable environmental
standards, or because the availability of suitable sites for disposal (for
landfill or incineration) is limited by social or political pressures. The
problem is generally less acute in North America, but there are pockets
of shortage (in New England, for instance). Further, a strict application
of the ‘proximity principle’8 embodied in EU and other international
legislation (like the Basel Convention), is likely to further accentuate
the waste management and disposal problems facing national
governments.
The waste (management) hierarchy
The waste (management) hierarchy (see Table 2) has for many

years been advocated by environmentalists as an indicator of the
preferred ‘ranking’ of waste disposal options based on their per-
ceived impact on the environment. It has also informed (both
explicitly and implicitly) the waste management strategies adopted
by the UK, the European Union (EU) and the USA since the early
1990s.
However most writers believe that the hierarchy should act, at best,
as a general guide rather than as a precise policy prescription under all
circumstances. According to Pearce and Brisson (1995) for instance,
‘popular ideas that ‘rank’ (disposal) options in terms of source reduc-
tion, re-use, recycling, incineration and landfill (usually in that order)
have no logical foundation, although the ranking might turn out to be
correct on detailed analysis. Indeed . . . the idea that ‘more recycling is
better’ has no foundation unless it is clear what the starting point is and
what the relevant costs and benefits are’. In other words, all options
(related to a particular material, product, process, waste management
project or policy initiative) should be evaluated (as far as possible)

250 800
700
200
600

500
150
400
100
300
kg per person/per year
Millions of tons per year

200
50
100
0 0
1960 1965 1970 1975 1980 1985 1990 1995 2000
Total MSW Per capita MSW
2 Municipal solid waste generated in the USA, 1960–2000.

Introduction
Introduction / page 9
Introduction
Table 2 The waste (management) hierarchy

Waste management option Key elements
Reduction at source Process, product or packaging re-design;

durability. ‘Green’ consumerism.
Reuse Refillable containers, reconditioned
products (re-moulded tyres), product
repair. New uses for redundant goods.
Recycling and recovery Recyclable products (disassembly); use
of secondary inputs; sorting of
household waste (MSW).
Composting Separation of organic materials in MSW;
household composting of
biodegradable waste. Recoverable low-
grade heat.
Incineration with energy recovery Separation of combustibles in MSW; pre-
or post-incineration materials recovery.
Incineration without energy recovery Treatment of hazardous and clinical
(disposal) wastes; pre- or post-incineration
materials recovery
Landfill (disposal) Energy from landfill gas (65%
methane/35% CO2) for heat/electricity.
Source: Compiled by author from DETR (1999) and various other sources.
according to the overall (social) benefits and costs they generate.

Various studies have attempted to model the relative attractiveness of
the various waste management options using a range of techniques
including or combining a study of their financial cost-effectiveness, a
full economic evaluation (using cost-benefit analysis) and/or Life Cycle
Assessment or LCA (aimed at determining the total environmental and
social impact of product usage and disposal).9
Scrap generation and recycling flows
In the current discussion, a useful categorisation is one based on

the quantity, inherent value and quality of the material discarded, and
on the complexity of the recycling chain involved. We can identify four
separate recycling flows (or circuits) distinguished largely by source and
purity of material which are common to all economies namely home (or

Introduction
R4
HOUSEHOLDS
R3b
R4
R3b LOCAL/MUNICIPAL
AUTHORITIES
R3a
FIRMS D
(Final products FIRMS E
/distribution) (Waste management firms/
scrap merchants)
R2
FIRMS A
FIRMS C S (Natural
(Conversion/ resource
fabrication) extraction)
R2
FIRMS B V
(Smelting/refining/
basic processing)
primary/secondary
R1 = ‘Home scrap’ R1
R2 = ‘Prompt/commercial’ scrap
(R1 + R2 = ‘New’ scrap)
R3a = Old scrap (commercial)
R3a = Old scrap (MSW)
R4 = Re-use
S = Secondary raw materials
V = Virgin raw materials
3 Recycling/residual resource flows.
revert) scrap; new (prompt industrial or process) scrap; old (commercial

or post-consumer) scrap; and re-use. All of these apart from home scrap
(see below) contribute to (measurable) overall national recycling ‘rates’.
These interrelate as shown in (Fig. 3).
Home (or revert) scrap

Home (or revert) scrap is generated as off-cuts during treatment
of raw materials (both primary and secondary) within basic smelt-
ing, refining or processing plants. It is of known purity and available
in large and regular quantities. Home scrap recycling rates are very
high (approaching 100%), and this material is rarely sold externally.

Introduction
New (prompt industrial or process) scrap

New (prompt industrial or process) scrap is sometimes also known
as manufacturer’s scrap; it is generated during manufacturing or fabri-
cation of finished or semi-finished products.10 Its level of contamination
or purity may be high or low depending on which stage of the manufac-
turing stage it is generated and the complexity of the product of which it
forms a part. Such scrap is invariably collected and recycled on a regular
basis, but usually requires the intervention of a secondary material (or
scrap) merchant in order to return it to basic processing plants. Supply
of new scrap tends to be price-inelastic, being more directly determined
by levels of industrial activity. The increasing efficiency of manufactur-
ing processes has led to a large decline in the volume of new scrap gener-
ated in recent years for some metals (copper, lead and iron and steel).
For others (aluminium and zinc, for instance), however, the share of
secondary production coming from new scrap has been growing.
Old (commercial or post-consumer) scrap

Old scrap may be generated by firms during the final stages of the
production or distribution chain (commercial scrap), where it arises
largely in the form of packaging waste. Collection and recycling of this
material is the domain of (scrap) merchants; it is fairly consistent in
quality and available in reasonable quantities, but under normal cir-
cumstances its supply (and demand from merchants) will be relatively
price-elastic. Commercial scrap has been targeted by legislation in a
number of countries. Old scrap also arises from households and small
commercial firms as part of municipal solid waste (MSW). Although the
intrinsic value of recyclable materials contained in MSW is high (see
Table 3), recycling rates in most industrialised countries have tradition-
ally been very low.
Scrap generated in MSW is typically characterised by high con-
tamination and lack of homogeneity, and is generated in relatively low
quantities from dispersed sources and locations. The supply of post-
consumer recyclables (via scrap merchants or directly from municipal
authorities) will, at least in the short-term, be partly price-dependent
(more will be offered for recycling and more will be collected over greater
distances the higher its value).
Re-use
Re-use involves the re-employment of a redundant (post-
consumer) product (as an object) either in its original use (a refillable

Introduction
Table 3 Composition of MSW in selected countries (% of total waste, by weight)

Material USA UK France Spain Greece Hungary Tanzania
(1996) (1995) (1996) (1996) (1996)
Paper and board 37.5 32 25 21 18 19 9

Plastics 8.3 11 14 11 10 5 2
Glass 6.7 9 13 7 3 3 1
Metals 8.3 8 4 4 3 4 3
Textiles 2.9 2 3 5 4 3 1
Compostables 24.6 21 29 44 51 32 59
Others 11.7 17 15 8 11 33 25
Total 100 100 100 100 100 100 100
Per capita MSW 730 476 597 390 372 473 na
(kg/yr)
bottle or re-mould tyre, for instance), or in a different application. Once

quite widespread, post-consumer re-use is now increasingly un-
common, certainly in the modern industrialised economies. The
term ‘re-use’ is sometimes also extended to cover the on-site collec-
tion and re-introduction of materials within industrial operations;
however, ‘re-use’ of industrial residues normally requires changes to
in-plant practices and some source segmentation (which would
place the material under home or new scrap in the categorisation used
above).
Influences on recycling rates
There are four principal influences on rates of recycling: material

characteristics; the substitutability of secondary (scrap) and primary
raw materials as production inputs; product markets; and environmen-
tal awareness and government regulations.
We can identify a number of key influences on the recycling
rates achieved for particular materials and products. These relate to
their intrinsic nature (which will determine their inherent recyclability),
how they have been used (and disposed of) as well as the existence or
otherwise of established recycling infrastructure and systems (which
may have been market-driven or have emerged as a result of public
policy).
Material characteristics
As intimated above, there is a wide variation in the recycling rates
achieved for the different recycling flows; these range from almost 100%

Introduction
Contamination
High Low
High High
Home scrap
Homogeneity Mass
Old scrap ( MSW)
Low Low
Dispersed Concentrated
Location
4 Physical characteristics of recyclable materials.
at one extreme (home scrap or recycling flow R1) to less than 10% at the
other (for MSW or reuse, R3b or R4) in some countries. To a large extent
this can be explained by the physical characteristics of the materials
involved in each of the flows and by the laws of thermodynamics (Turner
et al, 1994). The four key characteristics are mass (or volume of recy-
clable materials); homogeneity (level and consistency in quality of recy-
clable materials); contamination (or mixing of materials); location (the
number of points at which the materials are first discarded as waste or
residuals, and their geographical dispersion) (see Fig. 4).
Residual materials which are of greater purity (high homogeneity
and low contamination) will be technically easier and therefore less
costly to recycle; if in addition they are available in high volumes and
concentrated in a small number of locations they will be cheaper to col-
lect and transport to recovery operations. This will have underpinned
the evolution of efficient scrap (residual) collection systems (infrastruc-
ture and organisations) which will help facilitate high recycling rates.
The purity of recycled products also influences the underlying demand
for them; the relatively low rate of plastics recycling compared to that of
lead or aluminium, for instance, is due to the difficulty of producing a
product of adequate quality from waste plastics.

Introduction
Substitutability of secondary (scrap) and primary raw materials

as production inputs
The extent to which secondary (scrap or residual) raw materials are
viewed as a close substitute to primary (virgin) materials will help deter-
mine the market for recycled materials, and therefore the demand for
them. The degree of substitutability will depend on the physical charac-
teristics (quality, purity and degree of contamination) of the raw ma-
terials involved, their ease of availability, the flexibility of processing
technology (which will define the feasibility of using either virgin and/or
scrap materials, and in what proportion), costs of production and, in-
deed, the relative prices of secondary and primary materials (see below).
Product markets
The availability (and recycling rates) of particular materials within
MSW will also be influenced by end-use patterns (product forms and
design, lifetimes and durability), demand growth rates and wider trends
in consumption. Here we would also include the availability of markets
for recycled products or products containing recycled materials, both in
traditional end-uses and through the development of new market
opportunities.
Environmental awareness and government regulations

Environmental awareness, conditioned by a range of (largely
intangible) historical and cultural factors as well as levels of income and
economic well-being, clearly has an influence on local and national
recycling rates. The better overall ‘recycling’ performance of some coun-
tries might be perceived to be partly the result of the higher priority
assigned by individuals (because of education, lifestyle, etc) to environ-
mental matters. This heightened environmental awareness will itself
influence the policy agenda (locally, nationally and internationally) and
make it more likely that government regulations favouring and encour-
aging recycling (where this is seen as the most environmentally benign
waste management option) are introduced.
Measuring recycling rates
Where suitably disaggregated and reliable data is available,

recycling rates for individual materials (or indeed) products can be
calculated, (see Fig. 5 and 6). In its simplest sense a recycling ‘rate’ for a

100
90
Introduction
80
70
60
50
40
30
(Recycling as % of post-consumer product waste)

20
10
0
Glass containers Plastic soft drink bottles Paper & board Old newsprint Aluminium cans Automobile batteries
5 Product recycling rates in the USA, 1997. Source: US EPA.

80
70
60

50
40
(% of consumption)
30
20
10
0
1985 1990 1995
Aluminium Copper Ferrous metals Lead Zinc Plastic Paper & board Glass containers
6 Material recycling rates in the UK, 1985–1995. Source: various, from DETR website.
Introduction
Introduction
material will be given by the ratio of the tonnage recycled

annually/annual tonnage available for recycling. For individual ma-
terials, a relatively low overall recycling rate may however simply reflect
the pattern of usage of the material in question, (the range and type of
products in which it is used, average product lifetimes, etc), suggesting a
degree of caution when using this measure as a guide to the relative
recyclability of different materials. These elements are considered in
detail within the Chapters following.
Even for a given material the basis of calculation can vary, giving
rise to wide differences in perceived recycling rates. Table 4 illustrates a
range of plausible recycling ‘rates’ for aluminium in the UK, which range
from 31% to 88%.
The need to take account of international movements of secondary
(waste or scrap) materials makes matters particularly complicated, both
in terms of estimation and terminology (which is far from standardised).
The inclusion of secondary raw material net imports in the calculation
of a national recycling rate (as part of the numerator, tonnage recycled
annually) produces a recycling activity rate (or ‘utilisation rate’); if net
imports are not included then a recycling effort rate (or ‘recovery rate’)
has been calculated.11
Recycling decisions and recycling efficiency
Recycling flows are affected by three distinct types of decision

made by individual firms (or other private/public organisations) and
Table 4 Recycling rates for aluminium scrap in the UK, 1988

Basis of calculation Recycling
rate
Secondary aluminium + scrap consumed/total aluminium consumption 31%

Secondary aluminium production/total aluminium consumption 32%
Secondary aluminium production/primary aluminium consumption 47%
Old aluminium scrap recovery/aluminium scrap theoretically available1 63%
Old aluminium scrap recovery/recoverable aluminium scrap 88%
Note: 1. Based on a product-by-product analysis of material content and product life-

time.
Source: Derived from Henstock (1996).

Introduction
households, and the transactions that result from them; (i) a resource use
decision by firms both individually and sectorally (as basic processors,
Firms B in Fig. 3), involving the appropriate balance between virgin and
recycled material inputs; (ii) a purchase decision by households or firms
(as consumers), relating to the types of products demanded, the form in
which they are purchased (i.e. packaging materials) and their inherent
characteristics (i.e. their durability); and, (iii) a discard decision by
households and firms, involving the choice of when and how to dispose
of the residual material or redundant product (which will involve a range
of possible waste management options).12 Overlaying these decisions
will be the policy environment engineered by governments, which will
determine the precise blend of incentives and penalties facing individ-
ual economic agents, and will reflect the emphasis given to recycling
within their overall waste management strategies.
Producer recycling (resource use) decisions

For profit-seeking firms, the decision to recycle depends on the
availability and cost of recycled (or secondary) materials (or inputs)
relative to virgin (or primary) materials. It also requires that any price
differential in favour of recycled materials be sustained over time, to
make investment by firms in infrastructure and processing technology
(including the means for ensuring future environmental compliance)
worthwhile. The choice by the firm between virgin and recycled inputs
will also determine the market possibilities for residual materials, where
this material is being re-used within the same industry.
New scrap is usually of high quality and is simple to identify and
collect. The costs of recycling new scrap are consequently low, and its
supply (and demand) is highly price inelastic; under normal circum-
stances it is therefore economic for firms to recycle this material.
Collection and transport usually represent a significant part of
total recycling costs involved in the supply of post-consumption
secondary raw materials (old scrap). Sources of old scrap are normally
concentrated in and around urban centres, close to areas of product
consumption and usage, while processing facilities may sometimes be
located at some distance from these, particularly those plants which
were established originally to treat primary (virgin) materials. Unit
transport costs of secondary materials will also be relatively higher
because the opportunities for bulk shipment available to primary
materials will largely be absent.

Introduction
Table 5 Energy requirements for primary and secondary metal production

Metal Source GJ/t
Aluminium Bauxite (typically 47% Al2 O3) (25% Al) 270

Secondary 20–30
Copper Best case: (1% ore) 91
Worst case: (0.3% ore) 184
Secondary 4–50
Copper Electrolytic 74
Lead 2% ore 39
Secondary 1–11
Steel Average open hearth 31
Zinc 5% ore 61
Secondary 3–28
Source: Henstock (1996).
A major competitive advantage of many secondary materials lies in

the potential savings in direct energy requirements they permit (see
Table 5), although the precise benefits depend crucially on the form of
scrap or residual input used, and therefore the treatment process
required. There may also be indirect benefits because the form of energy
required is different (i.e. electricity as compared to fossil fuels).
Figure 7 represents an analysis of the resource-use decision
facing a firm which can use either recycled or virgin materials in the
manufacture of a given product (for simplicity we assume that these
are completely substitutable as inputs13). It shows a conventional
downward-sloping demand curve (D), and associated marginal revenue
curve (MR), which provide a measure of the value of the material to the
firm; we assume here that the firm operates in an imperfectly competi-
tive market. MCV represents the marginal cost of virgin materials to the
firm, while MCR shows the marginal cost to the firm of using recycled (or
secondary) materials. MCJ is the horizontal summation of the two lines.
The firm’s objective is assumed to be profit maximisation, which is
achieved by equating MR with MCJ (or point S in the diagram); this indi-
cates an optimal output level of Q*. The relative amounts of virgin and
recycled materials used can be derived from the point of intersection of
the line ST with MCV and MVR; these are QV and QR, respectively.
The recycling ‘ratio’ (or the share of output met from recycled
inputs) in this example is TN/TS. Anything which increased the supply
and reduced the cost of recycled inputs (through central government
subsidies or local recycling initiatives) would shift MCR downwards to

Introduction
MCV
MCR
Price/cost MCJ
S
M N
T
D
MR
0 QV QR Q* Output
7 Producer use of virgin and recycled material inputs.
the right and increase this ratio. A tax on virgin materials would have a
similar effect. As a result, the MRV curve would shift upwards to the left
(the use of virgin inputs would be more costly) and so too would the MCJ
curve. Total usage of materials would fall, but the demand for recycled
inputs (because they would now be relatively cheaper) would rise.
Product purchase and discard decisions

Current consumer decisions over which type and what quantity of
products to purchase will influence product design, production and
packaging decisions and ultimately have an impact on the volume and
composition of the MSW stream. Subsequent discard or disposal deci-
sions will determine when the redundant product should be discarded
(because it is broken, no longer meets the consumer’s needs, or is
superceded by a new product) and the method of discard. Consumer
purchase decisions are influenced by the characteristics exhibited by
products, which may well include how environmentally benign they are
or how durable, as well as their price.
Raising levels of recycling requires that firms manufacture prod-
ucts that are themselves recyclable, and that use recovered secondary
materials, thus generating demand for these materials. Consumers
must also be willing to buy products that are easy to recycle or that use
recycled inputs, viewing these as positive product attributes. They must
similarly be willing to actively participate in both corporate/product

Introduction
recycling programmes and those initiated by local or state authorities. If

high recycling rates are to be achieved it will be necessary to provide
incentives for households to participate in collection schemes, as well as
measures to generate public awareness.
There are two broad strands here; expanding the usage of recycled
materials (or recyclate) in existing products and markets as well as the
development of a wide range of more diverse, perhaps higher value,
uses of recyclate in sectors which may be different to those in which it
originated. The latter approach, by both enlarging and deepening the
market for individual recycled materials may also provide greater price
stability.14
The optimal level of recycling
Are current levels of recycling likely to be socially ‘non-optimal’

or economically inefficient in some sense? In other words, are there
grounds for believing that current levels of recycling in most countries
are too low? There certainly appears to be a widespread public percep-
tion that there are significant environmental and economic benefits
to be gained from recycling. There also seems to be broad public sup-
port for measures intended to increase the recycling of materials and
products.
The optimal level of recycling for any residual material is de-
termined by both technological and economic considerations.
Technological factors will place a physical limit on the proportion of any
material or residual that can ultimately be recycled. However, because
the process of recycling (i.e. collection, separation, recovery and utilisa-
tion) is not costless, there must be a stage at which the additional costs
incurred in recycling outweigh the extra (financial) benefits, or where
the optimal level of recycling, in narrow economic terms, is reached.
Without government intervention, recycling can be expected to take
place up to the point at which the marginal cost of the recovered ma-
terial equals its market value in saleable or usable form (or where
marginal private cost = marginal revenue). However, this represents the
private ‘optimum’; it excludes any social benefits (or costs) that might be
attached to recycling.
The market mechanism (using the information and incentives pro-
vided by relative prices) is normally seen as an efficient way of guiding
resource allocation decisions in an economy. However, the existence of a

Introduction
range of ‘imperfections’ or so-called ‘market failures’ may prevent the

efficient amount of recycling actually taking place. These failures result
largely from the presence of extensive externalities15 (or external costs
and benefits) attached to the resource use and product disposal deci-
sions set out above, but which are not captured by the market price of the
good consumed or service undertaken (which reflect only private costs
and benefits). The incentive for households and firms to undertake
recycling is consequently reduced; because of this the market alone is
therefore unlikely to guarantee ‘optimal’ levels of recycling or recovery
(or, indeed product durability) from society’s point of view (see Fig. 3).
The external benefits of recycling will include:
1 resource conservation or a reduced demand for virgin resources

(materials and energy); if these are wholly or partly imported there
may be significant macroeconomic,16 as well as strategic, benefits.
2 lower pollution impact due to reduced waste disposal.
3 reduced demand for land for dumping and landfill, making it
available for recreational or other social purposes.
There will, of course, also be external costs that arise from recycling,
largely relating to the environmental impact of collection and transport
of residual materials (e.g. road congestion, etc) and the added pollution
generated by the recovery process itself (e.g. the use of chemical inputs
which themselves become wastes).
Quantifying the external costs and benefits attached to recycling
(and other waste management options), however, is a difficult exercise,
and one couched in uncertainty and subjectivity.17 Indeed no option
(apart from waste minimisation) appears to perform best in all circum-
stances and all of them have particular advantages and disadvantages
which need to be evaluated using a common (monetary) measure
before an effective comparison can be made. Nevertheless, Table 6
(DETR, 1999) indicates positive external benefits from the recycling of
all materials apart from plastic film. The figures are based on an earlier
study by Coopers and Lybrand (1997), which also ranked recycling
above other options (apart from source reduction) when judged on the
broader basis of total economic (financial and external) costs. On a
material specific basis, Brisson (1997) found the total economic costs of
recycling for all materials (again apart from plastic film) to be positive,
but that these showed wide variation. The external benefits from
the recycling of metal and glass are significant, but for paper and rigid

Introduction
Table 6 External costs and benefits of different MSW management options

Waste management option External cost estimate1
(£ per tonne of waste, 1999 prices)
Landfill -3
Incineration (displacing energy from coal-fired +17
power stations)
Incineration (displacing average-mix electricity -10
generation)
Recycling +161
Ferrous metal +297
Non-ferrous metal +929
Glass +196
Paper +69
Plastic film -17
Rigid plastic +48
Textiles +66
Note: 1. Positive (+) numbers represent positive externalities (net external benefits).
Source: DETR (1999).
plastic these are much smaller. In many ways, wastepaper recycling rep-
resents a special case. Paper is derived from a renewable source (and
therefore does not face major problems of resource depletion); large
scale international movements of wastepaper may themselves generate
negative environmental impacts, and; energy recovery from the in-
cineration of low grade wastepaper (on its own or mixed with other
MSW) may (at least globally) be preferable in environmental terms to
more recycling.18
According to ECOTEC (2000) various recent (UK-based) studies
conclude with a generally favourable view of recycling on environ-
mental grounds, and this has been replicated by studies in the US and
elsewhere, with the main benefits centred on resource conservation,
pollution reduction and energy conservation effects.
An alternative approach is to disaggregate the analysis by focusing
on a specific material or a particular recycling scheme or locality; this
will generally prove to be more tractable and less controversial, as well as
providing useful insights for policy formulation. The study by Hanley
and Stark (1994), which utilises a cost-benefit analysis of waste paper
recycling, is a good example of this approach. Table 7 based on the study
provides a systematic summary of the key elements involved.19
Four major categories of market failure affecting the markets for
recycled, secondary materials can be identified (DETR, 1999). These are;

Introduction
Table 7 Costs and benefits of waste paper recovery from muncipal solid waste
Costs Benefits
1 Private recovery costs (actual costs 1 Value of secondary material

incurred in the collection of wastepaper (based on the market price of secondary
for recycling) fibre)
2 Environmental costs of recovery (In 2 Avoided private costs of alternative
principle these would comprise the disposal (measured by avoided landfilling
economic valuation of the external costs costs)
associated with different phases of 3 Reduced (municipal solid waste)
wastepaper recovery i.e. transport and collection costs
reprocessing. However, given the 4 Avoided environmental costs from
comparability of these costs for landfill alternative disposal
and for virgin material processing, they (reduced damage from landfilled waste
were not included here). paper)
5 Scarcity value saved (because land for
landfill is in limited supply)
6 Existence value of recycling (the
satisfaction derived from participation in
recycling; not quantified here)
Source: Hanley & Stark (1994).
lack of internalisation of external costs in the prices of primary (virgin)

materials; inappropriate technical standards (which are biased unnec-
essarily towards primary materials); lack of information (the perception
that secondary materials are inferior to primary materials); market
structure (that large buyers or sellers dominate the market for secondary
materials).
The structure of the recycling industry
Although we can identify a number of structural features common

to the various materials considered here, there are also important differ-
ences. The intention here is to try to draw out these common elements,
whilst indicating any idiosyncrasies or distinguishing features (which
will be discussed more fully in the following Chapters). There are also
difficulties related to satisfactorily identifying the boundary of the recy-
cling industry (or industries), because of the overlap between primary
and secondary producers, either in terms of raw material usage (if scrap
or virgin inputs are substitutable) or product (the range or quality of out-
put from secondary and primary producers may be indistinguishable).
The recycling industry tends to be highly segmented, both verti-
cally and horizontally. In most countries, recycling has traditionally

Introduction
Product manufacturers/fabricator
Ps
Smelter/ re-processors
Psr
Materials
recovery Scrap merchants/traders
facility
Municipal Commercial Charities / Municipal

authority /industrial voluntary authority
firms organisations
8 The structure of the recycling industry.
been based on a ‘pyramidal’ structure (see Fig. 8), with successive stages
in the scrap collection and processing chain characterised by smaller
numbers of market participants and a growing scale of activity. This is
partly a function of the historical and spatial evolution of the recycling
industry, but it also follows from its underlying economics and the logis-
tics of scrap collection from a wide range of sources. Recycling systems
vary in complexity according to the nature and form of material being
recovered, and partly as a consequence of this, the number of stages in
the chain between waste (residual) generation and reprocessing opera-
tions. Here, we can distinguish between metals, which for many years
have had well established collection systems based around scrap mer-
chant intermediaries, and other materials (glass, plastic and paper, for
instance) where formal recycling systems have only relatively recently
been developed, often in response to legislative demands. The last few
years has seen a major restructuring of the scrap and collection and pro-
cessing system in many countries for both economic and environmen-
tal reasons. For many metals this has meant a reduction in the number of
independent merchants and an increase in their average size; this has
mirrored an increase in scale of operation at the secondary smelting or
reprocessing stage, reinforced by mergers and acquisition. This stream-
lining has also been accompanied, by the evolution of more direct
and closer links between reprocessors and their ‘captive’ merchant or
municipal suppliers, and between re-processors and fabricators.

Introduction
These links have often been characterised by formal, long-term

agreements. Ideas of producer responsibility underpinning recent
environmental legislation in this area, suggest further rationalisation
along these lines in the future, and ultimately the need for manu-
facturers as far as possible to internalise the entire recycling chain
within their scope of operations. Another major structural change has
been the growing involvement of municipal authorities (and generally
increased participation of households and firms) in recycling activities,
which has dramatically increased the volume of recyclables available
from MSW and the number of sellers of this material.
Two market transactions (and market prices) are of interest here

(see Fig. 8). Firstly, the sale of secondary materials (in the form of refined
metal, recycled paperboard or reclaimed plastic, etc) from smelter/
re-processor to product manufacturer/finisher (at market price Ps).
And, secondly, the sale of scrap or residuals (as raw materials) from
merchants and traders, or by local authorities via materials recovery
facilities, to smelters or re-processors (at market price Psr). Both Ps and
Psr are ultimately related to the price of the underlying primary product.
Although secondary materials (especially metals) can be indistingui-
shable in terms of quality from their primary counterparts, consumer
preferences will favour the latter unless these are significantly more
expensive. Indeed, ‘unless environmental or strategic reasons transcend
economics, the ruling price of primary . . . places a de facto ceiling on the
price of secondary’.20 In the medium-term, secondary materials will
trade at a discount to primary materials, although the differential will
vary by region, and from time to time may disappear completely.
The Chapters that follow explain the scrap pricing arrangements,
and market determinants, for each individual material. There is a wide
variation in the amount and quality of information available to buyers
and sellers in each market, and this has a major impact on market
operation. The markets for many residual materials (scrap metals, used
metal products and wastepaper, for instance) are well-established, with
published data on reference prices widely available. These are represen-
tative prices, with variable premiums or discounts depending on the
purity of the scrap or residual. These materials have been traded for

Introduction
some time, are of recognisable quality, purity or grade,21 and are related
to an underlying commodity market. Other residual materials (like
redundant plastics and glass) face markets that are thinner, more highly
segmented and therefore less standardised, or (in the case of rubber)
no real market at all. Negotiated prices predominate, severely limiting
transparency and market efficiency. Often there are small numbers of
re-processors or buyers of recyclate relative to the number of sellers
which exaggerate price movements; when demand for a material is high,
prices tend to rise sharply, but even a marginal fall in demand can often
result in a collapse in prices. The result has been greater price volatility
and uncertainty, both of which have arguably had an adverse impact on
recycling activity.
The volatility of scrap prices is apparent from Fig. 922 and from
the data provided in later Chapters. Scrap prices (as do those of other
commodities) respond to underlying economic conditions and trends
in industrial activity, both domestically and internationally, and are
affected by speculation. However, they have also become increasingly
influenced by the widespread efforts made by governments in recent
years to raise recycling rates through targeted legislation. These mea-
sures effectively amount to ‘enforced recycling’, and if their implemen-
tation is not managed properly can result in severe marked distortion.
They can have a devastating effect on prices, often exacerbating the
problem of volatility,23 and accentuating an already declining trend in
real prices. This would suggest either that governments also actively
promote the development of new uses for recycled materials and new
markets for recycled products, or that government intervention on the
supply-side is reduced, leaving levels of recycling to be determined
purely by market forces.
Scrap prices do certainly appear to fluctuate more dramatically
than the prices of the finished or semi-finished products of which they
form a part. However, apart from the case of wastepaper (see Fig. 10) (of
the materials shown here), scrap prices may be fundamentally no more
volatile than those of comparable virgin raw materials (like metal ore and
concentrates or virgin pulp, for instance). However, there is a general
absence of forward and futures markets for secondary raw materials,
which would otherwise permit suppliers and users of these materials to
protect themselves against the risk of price fluctuations by hedging.
The aluminium alloy contract on the London Metal Exchange (LME) is
probably the most high-profile example, but it remains very much in the

Index (Jan 1982=100)
100
150
200
250
50
Jan-90
May-90
Sep-90
Jan-91
May-91
Sep-91
Jan-92
May-92
Sep-92
Jan-93
UBevCan scrap May-93
Sep-93
Jan-94
May-94
Sep-94
Jan-95
May-95
Crude materials
Sep-95
Jan-96
May-96
Sep-96
9 Selected US producer prices, 1990–2000. Source: US Bureau of labour statistics.

Jan-97
May-97
Sep-97
Iron & steel scrap

Jan-98
May-98
Sep-98
Jan-99
SHG zinc
May-99
Sep-99
Jan-00
May-00
Sep-00
Introduction
600
Introduction
500
400
300
Index (Jan 1982=100)

200
100
0
0 t t t t t t t t t t t
-9 ay p 91 ay p 92 ay p 93 ay p 94 ay p 95 ay p 96 ay p 97 ay p 98 ay p 99 ay p 00 ay p
n M Se n - M Se n - M Se n - M Se n - M Se n - M Se n - M Se n - M Se n - M Se n - M Se n - M Se
a a a a a a a a a a
Ja J J J J J J J J J J
Wastepaper Paper Rcy paperboard
10 US producer prices for wastepaper and paper products, 1990–2000. Source: US Bureau of labour statistics.

Introduction
shadow of the primary aluminium contract, and does not yet dominate
the pricing of secondary metal. Other exchanges have developed con-
tracts based on scrap or waste materials (like the recyclables exchange
run by the Chicago Board of Trade between 1995 and 1999 for instance),
but these have often suffered from liquidity problems, and have fallen
short of providing mechanisms for full forward or futures trading.
notes
1. From D Woodward (1985), quoted by Ackerman (1997).
2. According to a recent report from the Worldwatch Institute (2000), the global
recycling industry now processes more than 600 million tons of material each year,
has an annual turnover of $160 billion, and employs more than 1.5 million people
worldwide.
3. Beukering and Duraiappah (1996).
4. See Turner, Pearce and Bateman (1994), Chapter 1 and Henstock (1996), Chapter 3,
for further discussion. For a detailed formulation of the materials balance
approach see Kneese, Ayres and D’Arge (1970).
5. Solow (1974).
6. From the EU Framework Directive on Waste. Sixteen categories of waste are
currently specified.
7. See the research study produced by consultants Enviros Aspinall for the Resource
Recovery Forum. Reported in Warmer Bulletin 72, May 2000.
8. Under the proximity principle countries are encouraged to work towards self-
sufficiency in waste disposal. However, as Brisson (1993) points out this principle
should only apply to those materials which have a limited secondary market, or
none at all, and therefore no or a very low market price.
9. ECOTEC (2000) provides an excellent review of a number of recent UK studies
(which use a combination of life-cycle assessment and economic evaluation).
10. An earlier analysis of new scrap generation rates suggested average scrap ratios
(the percentage of metal purchased that ends up as non-product) for aluminium-
based, copper-based, and iron and steel products of about 20%, but with a wide
variation between individual products. Bever (1976), quoted by Henstock (op. cit)
p53.
11. Turner, Pearce and Bateman (1994). Very different figures can emerge. For instance,
according to Pulp and Paper International, the UK recovery rate for wastepaper in
1994 was 35%, while the utilisation rate was 66%; comparable figures for the USA
were 41% and 34%, respectively.
12. This categorisation is derived from Fenton and Hanley (1995), who use it as a
conceptual framework for examining the effectiveness of particular waste
management policy instruments.
13. Newspaper can be produced almost entirely from recycled newsprint, but requires
some virgin newsprint for quality purposes; this is sometimes the case with metals
recycling, although it is normally technological or economic factors that
determine.
14. See DETR (1999) for a discussion of specific measures that have been proposed for
the UK.
15. Externalities can be defined as unintentional spillover effects associated with
either production or consumption of a good or service that have positive or

Introduction
negative effects on third parties (i.e. those not directly involved in the production
or consumption activity itself ).
16. See Da Vita (1998) and Rich et al. (1999). The macroeconomic benefits will arguably
be even larger in developing countries because of substantial employment
generation, often in the informal sector, and because of savings in scarce foreign
currency.
17. See ECOTEC (2000) for a detailed discussion of difficulties involved in
estimation.
18. See Collins (1996) for an eloquent discussion of these issues.
19. Interestingly, the study concludes that the particular scheme under consideration
while desirable when social costs and benefits are included, is unprofitable from a
private (cost/benefit) viewpoint.
20. Henstock, op. cit, page 34.
21. Standard specifications are published by individual trade associations and
industry bodies, like the Institute for Scrap Recycling Industries (ISRI), for instance.
22. The US Bureau of Labour Statistics (BLS) provides comprehensive and comparable
US time series data on a vast range of commodity prices, but not for rubber, plastics
or glass (cullet) scrap.
23. The most notorious example of this was the German Packaging Ordinance (1991)
and the Duales Systems Deutschland (DSD) scheme.
references
Ackerman F, Why do we recycle? Markets, values and public policy, Island Press,
1997.
American Metal Market, http://www.amm.com
Ayres R U, Metals Recycling: Economic and Environmental Implications, INSEAD
Working Paper 97/59/EPS/TM, 1997.
Collins L, ‘Recycling and the Environmental Debate: A Question of Social
Conscience or Scientific Reason?’, Journal of Environmental Planning and
Management, 39 (3), 1996.
Edwards J and Ma C, Futures and Options, McGraw-Hill, Singapore, 1992.
Fenton R and Hanley N, ‘Economic instruments and waste minimization: the need
for discard-relevant and purchase-relevant instruments’, Environment and
Planning, (27), 1995.
Hanley N and Slark R, ‘Cost-benefit analysis of paper recycling: a case study and
some general principles’, Journal of Environmental Planning and Management,
37 (2), 1994.
Henstock M E, The Recycling of Non-Ferrous Metals, ICME, Ottawa, 1996.
Kneese A V, Ayres R U and D’Arge R C, Economics and the Environment: A Materials
Balance Approach, Resources for the Future, Washington, 1970.
McQuaid R W and Murdoch A R, ‘Recycling policy in areas of low income and
multi-storey housing’, Journal of Environmental Planning and Management, 39
(4), 1996.
Pearce D W and Turner R K, ‘Market-based approaches to solid waste
management’, Resources, Conservation and Recycling, 8, 1993.
Powell J C, Craighill A L, Parfitt J P and Turner R K, ‘A lifecycle assessment and
economic valuation of recycling’, Journal of Environmental Planning and
Management, 39 (1), 1996.
Solow R M, ‘The Economics of Resources or the Resources of Economics’, American
Economic Review, 64 (2), 1974.

Introduction
Tilton J E, ‘The future of recycling’, Resources Policy, 25 (197–204), 1999.

Turner R K, Pearce D and Bateman J, Environmental Economics, Harvester
Wheatsheaf, 1994.
van Beukering P and Duraiappah A, The Economic and Environmental Impacts of
the Waste Paper Trade and Recycling in India: A Material Balance Approach,
CREED Working Paper Series No. 10, 1996.

1 Aluminium
James F King

1.1.1 Characteristics and properties
Light weight
Strength
Moderate melting point
Ductility
Conductivity
Corrosion resistance
Barrier properties
1.1.2 Products and end-uses

1.2.1 Aluminium production processes
Primary smelters
Independent cast houses
Secondary billet plants
UBC recycling plants
Secondary smelters
Semi-finishing plants
1.2.2 Primary and secondary aluminium
1.2.3 Aluminium recycling processes
Internal scrap collection and processing
External scrap collection and processing
New industrial scrap
Old scrap
Dross

Part 1

1.4.1 Relative importance of secondary production
1.4.2 Forms and availability of scrap
1.4.3 Scrap recycling arrangements
1.4.4 Trade in scrap
1.4.5 Scrap pricing arrangements

1.1 Physical characteristics, properties, products
and end-uses
Aluminium is a light metal of silver appearance with unique prop-

erties of strength, resistance to corrosion, ductility and surface finish.
Like all industrial materials, aluminium products are useful because of
a combination of characteristics. Aluminium in semi-finished form
appears as rolled products (plate, sheet and foil), extrusions, forgings
and castings. It competes with a wide range of alternative materials in
various applications, including cast iron, rolled steel, tinplate (rolled
steel coated with tin), galvanised steel (rolled steel coated with zinc
compounds), cast zinc, copper wire, copper tube, forged titanium, cast
magnesium, timber, plastics such as PVC and PET, glass, cardboard and
metallised paper.
Aluminium is the third most important industrial metal after steel
and cast iron. Cement is believed to be the only industrial material with
consumption greater than steel.
Even on an equivalent surface area basis (recognising that alumin-
ium is only one-third the weight of steel for a piece of the same dimen-
sions), the consumption of aluminium would be the equivalent of 86
million tonnes of steel, only 14% of the consumption of steel. The world
consumption of metals is shown in Table 1.1.
In any application aluminium is selected against competing
materials on the basis of a balance of cost and functional characteristics.
The characteristics include:
Light weight
Aluminium has a density of 2.7 grams per cubic centimetre, com-
pared to the competing metals shown in Table 1.2.
Relatively light weight means that the price of aluminium per
tonne can be much higher than, for example, coated steel but can be
competitive when measured on the basis of square area of a sheet prod-
uct. Hence, if steel sheet is priced at $700 per tonne for a particular qual-
ity, aluminium sheet can be priced at $2048 per tonne and have the
same price per square metre. Similarly, aluminium can be higher priced
per tonne than iron or zinc but still be competitive on a volume basis in
castings.
© Woodhead Publishing Ltd Chapter 1 / page 1

Part 1: Ferrous and non-ferrous metals
Table 1.1 World consumption of major metals, 1996

m tonnes Annual % growth
1975–1996
Cement 1234 2.1

Steel 632 0.8
Cast iron 50 -1.8
Aluminium 29 2.6
Copper 13 2.6
Zinc 8 1.6
Lead 6 1.0
Nickel <1 1.8
Magnesium <1 2.6
Titanium <1 na
Tin <1 0.4
Note: The information in all tables and figures has been

compiled by the author from a wide variety of sources.
Table 1.2 Properties of industrial metals

Density Melting point
(g/cc = t/m3) °C
Magnesium 1.7 650

Aluminium 2.7 660
Titanium 4.5 1670
Zinc 7.1 419
Tin 7.3 232
Steel 7.9 1540
Copper 8.9 1084
Lead 11.3 327
Note: g/cc = grams per cubic centimetre.

t/m3 = tonnes per cubic metre.
Light weight in relation to strength permits aluminium to compete

in applications where the weight of components is important, e.g. in
road vehicles or aircraft.
Strength
Although lower in structural strength than steel or titanium for an
equivalent thickness, aluminium in common alloys (alloys with silicon
and magnesium) has substantial structural strength. This permits it to
compete in applications where structural strength is important, in com-
bination with other characteristics, such as in building products. In spe-
cial alloys (‘strong’ or ‘hard’ alloys with manganese, copper and other
Chapter 1 / page 2 © Woodhead Publishing Ltd

Aluminium
additions and specially heat treated) the structural strength is greatly

improved, making aluminium suitable for major load bearing, as in air-
craft structures.
Moderate melting point

The melting point of aluminium is 660°C. This is low in comparison
with structural metals such as steel or titanium, which makes alumin-
ium less suitable for very high temperature applications, but is adequate
for most normal applications. A moderate melting point permits
aluminium to be used to make castings with considerable structural
strength. In this respect aluminium is not as easily cast as zinc and has a
similar melting point to magnesium, but is much less reactive and there-
fore easier to work than the latter. The relatively low melting point also
allows molten aluminium to be cast directly into semi-fabricated prod-
ucts in the form of continuous-cast sheet and rod.
Ductility
When heated to moderate temperatures aluminium is a highly
ductile material, allowing it to be worked with conventional rolling mills
using steel rolls and to be extruded through steel dies into complex
shapes, a process which is not possible for steel on a large scale. The
rolling capability allows aluminium to compete with flat-rolled steel and
other rolled metals. The extrusion capability allows extruded alumin-
ium to compete with steel rolled into simple shapes and with steel fabri-
cated by forming and/or welding into complex shapes. It also permits
aluminium to compete with timber and extruded plastics in complex
constructions such as window and door frames. High ductility allows
aluminium to be rolled to very fine gauges, making possible the produc-
tion of aluminium foil down to a thickness of around 6 microns, and
thereby allowing competition with plastic film, cardboard, etc, in pack-
aging applications.
Conductivity
Aluminium is a good conductor of heat and electricity, better than
steel but less good than copper in both respects. Aluminium therefore
competes with copper (and now with optic fibres) in the market for elec-
trical and telecommunications cables. It also competes with copper
in heat transfer applications such as car radiators and with steel for
domestic radiators and in cooking utensils.

On contact with the atmosphere a thin coating of impenetrable
aluminium oxide is formed, which prevents further corrosion. This gives
untreated aluminium a dull appearance but, when subject to surface
treatment in the form of anodising, this corrosion resistance is com-
bined with an attractive finish. Anodised aluminium products therefore
require minimum maintenance, allowing them a potential cost advan-
tage over materials such as timber and uncoated steel, which must be
repainted, and also permitting competition with stainless steels.
Barrier properties
Aluminium is impervious to liquids and gases and non-reactive,
making thin aluminium foil a suitable material for food wrapping
and other types of packaging, in competition with other materials such
as plastic film or cardboard, where these characteristics are not so
evident.
As we have seen, aluminium in semi-finished form appears

as rolled products (plate, sheet and foil), extrusions, forgings and
castings.
The extraction of aluminium metal from aluminium oxide became
a commercial possibility in 1888 and the development of the market
began from that time. Initially this took the form of sales of aluminium
for electric cables (rod and wire products) and domestic cooking uten-
sils (sheet products). Subsequently applications expanded into building
products (sheet and extruded products) and builders’ hardware (cast
products). Aluminium always had a strong position in the aircraft
industry from its beginning and benefited enormously from the surge in
demand for wartime aircraft manufacture (hard alloy sheet, extruded
and forged products). In the 1960s aluminium gained ground in certain
building applications in various markets (soft alloy sheet and extruded
products), and through the 1970s and 1980s the development of the
packaging market gave a further boost, particularly in the form of the
aluminium beverage can in North America (alloy sheet products).
Packaging developments also permitted the steady growth of demand
for aluminium foil.
The rising cost of energy after 1973 and again after 1979 changed

Aluminium
Table 1.3 Semi-finished aluminium consumption by

end-use, Western countries, 1995
m tonnes %
Transport 6.3 25
Construction 5.5 22
Packaging 4.5 18
Electrical 3.1 12
Consumer durables 1.8 7
Engineering 1.7 7
Other 2.6 10
Total Western 25.5 100
the focus of the automotive industry away from size and performance to
comfort and economy. This required lighter weight without too much
reduction in body size. Aluminium has benefited strongly from this,
gaining against cast iron in engine blocks and other components (cast
products), against copper in radiators (sheet products) and, most
recently, against steel in wheels (cast and forged products). Initial
progress was made against steel in automotive frame and body parts
(sheet and extruded products) in the early 1990s. This is now accelerat-
ing into a wider range of high-performance and luxury cars.
The development of new applications continues across a wide
front in the industrial countries. At the same time the old applications,
such as electrical conductors, household utensils, basic foils and simple
building products, still have growth potential in the developing world,
where aluminium consumption remains very low. Semi-finished alu-
minium consumption by end-use in the Western countries can be seen
in Table 1.3.
Further discussion of the particular aluminium products relevant
to the aluminium scrap and recycling industries follows below. Typical
specifications of the main aluminium products are shown in Appendix
Table 1.
Aluminium scrap and recycling are involved at various stages of

the aluminium industry and their role can be appreciated only within
the total structure of the industry.

1.2.1 Aluminium production processes
Production units within the industry can be classified into the

following types.
Primary smelters
Primary smelters use the Hall–Heroult electrolysis process to pro-
duce aluminium from the primary raw material of aluminium oxide
(alumina). The product is primary aluminium, normally containing
over 99.5% pure aluminium. The quality of primary aluminium traded
on the London Metal Exchange (LME) is 99.7% pure aluminium, known
also by the US Aluminum Association alloy designation of P1020A. This
metal contains a maximum of 0.1% silicon and 0.2% iron. Current world
capacity for primary aluminium is 25 million tpy (tonnes per year) in
some 230 smelters.
Primary aluminium is shipped in the form of ingot products.
Molten metal from the reduction section of the smelter (pot-lines) is
taken to a separate part of the plant (the cast house). There the metal
is subject to processes which can include:
• holding in oil- or gas-fired furnaces to stabilise temperature;

• alloying if necessary by the addition of prepared alloying elements
in the form of proprietary master alloys, silicon metal, magnesium
metal or manganese metal;
• treating by filtration or proprietary gas purging techniques to
remove minor impurities, gases and solid inclusions;
• pouring into ingot machines to produce solid cast ingot products.
These machines produce different shapes, metallurgical
properties and surface finishes on the ingot products, which
comprise billet (cylindrical extrusion ingot for extrusion), slab
(rectangular rolling or sheet ingot for rolling), foundry alloys
(small ingots for use in aluminium foundries to make castings)
and remelt ingot (sows, T-ingot/T-bar or ‘standard ingot’ [pigs of
2–30kg] for remelting at other locations);
• delivering molten metal in liquid form after treatment to other
locations for casting into ingot products or further processed
within the plant by direct casting to semi-finished items such as
continuous-cast strip or wire rod.

Aluminium
In some cases cast houses at primary smelters add some

cold remelt ingot and/or scrap from outside the plant (external scrap)
to produce additional quantities of ingot products beyond their capacity
for molten primary aluminium. About 1.2 million tonnes of such
remelting occurs in Western primary smelters, producing ingot
products which are not directly reported in the industry’s primary
aluminium statistics.
Independent cast houses

Independent cast houses are often former primary aluminium
smelters where the electrolysis sections (pot-lines) have been closed.
They receive and melt cold metal (mainly remelt primary ingot with
some external scrap) and produce a range of primary ingot products.
Such plants are particularly important in Japan.
Secondary billet plants

Secondary billet plants are independent cast houses which receive
and melt cold external scrap of particular qualities (mainly extrusion
scrap), with additions of remelt ingot to control quality, and which pro-
duce mainly billets.
UBC recycling plants

UBC (used beverage can) recycling plants receive and melt
cold external scrap of particular qualities (mainly used beverage cans),
with additions of remelt ingot to control quality, and produce mainly
slabs.
Secondary smelters
Secondary smelters receive and melt external scrap of a wide
variety of qualities and produce mainly secondary foundry alloys for
use in aluminium castings.
Semi-finishing plants
Semi-finishing plants (plants making rolled extruded and cast
products) melt internal scrap generated by their own manufacturing
operations, plus additions of external scrap from other locations and/or
remelt ingot.

1.2.2 Primary and secondary aluminium
For statistical purposes production of primary aluminium is mea-

sured at primary smelters. All plants of Type 2–5 and many plants of Type
6 remelt or handle molten aluminium. Plants of each of these types use
both remelt primary ingot and scrap.
In the aluminium industry, therefore, scrap metal and recycling
are an integral part of the complex structure of the industry. In many
cases plants are designed with remelting furnaces and casting equip-
ment sufficient to process remelt primary ingot and the scrap which
they generate in their own downstream operations (internal scrap,
also known as ‘runaround’ or ‘home’ scrap). Some semi-fabricating and
billet plants, all UBC recycling plants and most plants producing
foundry alloys are designed to process scrap from other locations (exter-
nal scrap).
Where plants process external scrap they are considered to pro-
duce ‘secondary aluminium’. For example, a plant which remelts used
aluminium beverage cans (UBCs) and processes them into slabs for fur-
ther rolling is considered to be a producer of secondary aluminium.
A rolling mill which remelts primary ingot and blends this with its
own internal scrap has remelting and casting capacity, but is not con-
sidered as producing secondary aluminium.
1.2.3 Aluminium recycling processes
Our information on capacity for secondary and recycled alumin-

ium indicates that at the end of 1995 secondary aluminium capacity in
the Western countries was 11.8 million tonnes at over 600 plants. In
addition, information on semi-fabricating capacity and on primary
smelter cast houses indicates that there is capability to remelt internal
scrap at a further 400 extrusion plants and 300 rolling mills, to add exter-
nal scrap in the cast houses of many primary smelters. Hence, there are
at least 1300 plants in the Western world with the capacity to melt alu-
minium scrap in some form, i.e. to recycle aluminium. Their production
is probably understated by the industry’s statistics which we must use in
this analysis.
Using information for capacity and an assessment of the typical
operating rates of plants, we estimate that the normal quantities of alu-
minium scrap which are produced and consumed at various stages of

Aluminium
Table 1.4 Aluminium scrap production and consumption

(Western countries, ‘000 tonnes metal content, 1998)
Production Consumption
At primary smelters 0 700

At secondary smelters, etc. 0 8600
At semi-finishing plants 5600 5600
Total 5600 14 900
the aluminium industry in the Western countries are as shown in

Table 1.4.
This indicates that aluminium plants consume about 15 million
tonnes of scrap, but generate nearly 6 million tonnes in their own opera-
tions (internal scrap). They therefore require to source about 9 million
tonnes of scrap (aluminium content) from outside the industry (exter-
nal scrap) in order to meet their requirement to produce semi-finished
products. This 9 million tonnes is a measure of the quantity of recycled
or secondary aluminium.
The main processes which are involved in the recycling of alumin-
ium scrap within the various stages of the industry described above
include the following.
Internal scrap collection and processing

Aluminium scrap is generated within plants at all stages of the
aluminium products industry. At primary or secondary smelters scrap
is generated in the form of such items as off-specification ingots and
butts sawn from billets or slabs in the cast house. This scrap is all recy-
cled within the smelter, by being added to the molten metal in the cast
house.
At semi-fabricating plants scrap is generated in the form of offcuts,
damaged or off-specification extrusions, rolled products, wire rod, etc.
This scrap can amount to 20% of the throughput of the equipment,
depending on the product mix and the efficiency of the operators. This
scrap can be easily collected within the plant and segregated by type of
alloy. Almost all rolling mills and most larger extrusion plants (plants
with capacity over perhaps 10000tpy) and many smaller extrusion
plants have oil- or gas-fired remelting furnaces and casting equipment
similar to primary smelters. These casting units are fed with scrap (and

usually also remelt primary ingot and alloy metals for alloy control pur-
poses) to produce slabs or billets for their own use.
This internal scrap is essentially material circulating within the alu-
minium industry which is generally not recorded in industry statistics
and is not recycling in the normal sense of the term. It is, however, a large
quantity of metal and its reprocessing is essential to the economics of
the industry.

External scrap which is available for recycling is of two types:
1 ‘New industrial scrap’ (scrap generated by the users of semi-

fabricated products, such as scrap from the processing of sheet
into cans or extrusions into windows).
2 ‘Old scrap’ (scrap recovered from aluminium products which
have completed their life in service, such as the return of a used
beverage can or the dismantling of a scrapped car).

Much new industrial scrap is similar in principle to internal scrap
from the semi-fabricating stage. It may be offcuts of sheet and extru-
sions, damaged products, etc., which are easily identifiable by type of
alloy and are uncontaminated by processing. This type of scrap,
together with the scrap from semi-fabricators such as small extruders
who do not have their own remelting facilities, is suitable for returning
to the semi-fabricators or to specialist remelting operations such as
secondary billet producers.
These companies will convert the scrap back into billets and the
material may move in a closed loop by means of toll conversion. Under
this arrangement the semi-fabricator (rolling mill or extruder) toll-
converts scrap from his customer back into billets or slabs and then into
new extrusions or rolled products for payment of a conversion fee.
This is the practice, for example, in the recycling of scrap sheet from
the manufacture of aluminium cans. The can maker punches the can
blanks from the sheet, leaving a significant quantity of unused material.
The purchasing arrangements for the sheet include provision for this
scrap to be returned to the rolling mill for reprocessing into new can
sheet.
Secondary billet producers operate in a similar manner. This type

Aluminium
of plant operates by purchasing or toll-converting scrap from extruders

who do not have their own remelting facilities, processing the scrap into
billet for a conversion fee. This type of toll-conversion arrangement
has developed quite strongly in the past decade, with the emergence
of many secondary billet plants whose business is toll-conversion of
extrusion scrap.
Other forms of new industrial scrap are machine turnings, swarf
and other material from the milling, boring or cutting of metal. This
material may be of mixed alloy composition and will almost certainly be
contaminated with oil, other metals, paint, dirt, etc. It is not suitable
for feeding to the normal remelting equipment of semi-fabricators or
secondary billet plants. This scrap would normally be collected by
merchants or supplied direct to secondary smelters for processing, as
described below.
Old scrap
Old scrap is the scrap which we generally associate with the scrap
metal trade – material collected from products which have finished their
useful lives. Old scrap aluminium is recovered from several major types
of product and is accordingly processed by different types of operation.
As in the processing of internal scrap and new industrial scrap described
above, the key factor is the segregation of clean scrap into identifiable
qualities and reasonable quantities. If this is possible, special processing
arrangements can be made.
One example is the decommissioning of overhead electric cables.
In most countries high-tension conductors are pure aluminium or alu-
minium alloy cables with a steel core. Replacement of old cables
involves the collection of tonnes of material, which can be processed to
yield a large quantity of aluminium of known composition. This can be
remelted by semi-fabricators, secondary billet plants or primary smelter
cast houses and commands a price close to that of primary metal.
The most important product area at present for the organised
segregation of aluminium scrap is the processing of used beverage
cans (UBC) and the USA has led the way in developing recycling
systems. The average aluminium beverage can produced in the USA in
1996 contained 14.2 grams of aluminium (compared to 20 grams in
1975), and in 1996 63 billion cans, containing 893000 tonnes of metal,
were collected for recycling. The collection rate was over 63% of the cans
used in the USA. Figure 1.1 shows that most of the growth of US scrap

3
million tonnes
2 Other old scrap

UBC scrap
2 New scrap
0
1975 1980 1985 1990 1995
Years
1.1 Recycled aluminium: sources – USA.
1.2 100
1.0 80
percent collected
million tonnes
0.8
60 Aluminium collected
0.6
40 Collection rate (%)
0.4
20
0.2
0.0 0
1975 1980 1985 1990 1995
Years
1.2 Recycled aluminium: beverage can scrap recovery – USA.
supply up to 1991 came from UBC scrap, with new industrial scrap and
other old scrap remaining broadly constant in volume over much of the
period. Figure 1.2 shows the development of UBC recycling over the past
20 years in terms of the tonnage of metal collected and the collection
rate.
The European Aluminium Association estimates that in 1996 total
beverage can consumption in Western Europe was 29.7 billion units, of
which 50% were aluminium; 37% of aluminium beverage cans were
collected for recycling (i.e. 5.5 billion units). The potential in Europe
for increases in the number of beverage cans consumed, the share of
aluminium and the rate of collection are all substantial.

Aluminium
In the US recycling system UBCs are collected by individuals or vol-

untary groups and returned to locations such as supermarkets where
they are redeemed for a payment per can. The cans are then moved to
central depots where they undergo preliminary sorting to eliminate
steel cans or waste and are then baled for shipment to a recycling plant.
Special can recycling plants have been developed, either by the inte-
grated producers who have can sheet rolling mills or by specialist
processors serving the mills. These plants process the baled cans in one
or more furnaces with special environmental control equipment to han-
dle the emissions from the burn-off of lacquers and decorative coatings
on the cans.
Most aluminium cans are manufactured in two pieces – a one-
piece can body in alloy 3004 and a separate can end (top) with pull tab in
alloy 5082. As indicated in Appendix Table 1.1, showing the specifica-
tions of aluminium products, the body has high manganese content for
ductility and strength at very low thicknesses in the can-making process.
The end has high magnesium content for rigidity. The whole can is
remelted, so the resulting alloy is a blend of these two and must be
adjusted by adding remelt primary ingot and alloying elements. The
resulting metal is cast into new rolling slabs at the plant, or in some cases
moved in molten form to the cast house of a rolling mill.
A further use of scrap in the rolling sector is in the ‘mini-mill’, a
concept which was developed particularly in the USA. In these plants
selected scrap is remelted and blended with primary aluminium and the
molten metal is processed in continuous roll (strip) casters into alumin-
ium strip without hot rolling. This strip is then cold rolled and can be
used for certain foil applications and for building sheet products which
will be subsequently painted or do not require exceptional surface qual-
ity. These mini-mills are normally operated by small companies which
are independent of the major integrated groups and which thrive on
their low raw materials and overhead costs.
In principle all aluminium sheet or extrusion scrap which can be
segregated into economic quantities will be separated by scrap mer-
chants so that it can be supplied to the relevant specialist sector of the
industry – rolling mill’s cast house, extruder’s cast house, secondary
billet producer, etc. – because such consumers will pay higher prices for
a scrap product which is closer to their own end products and which
therefore requires less sorting, handling and alloying. Whether in prac-
tice this type of segregation is commercially attractive for the scrap

merchant depends largely on geography – the transport cost of moving

the segregated scrap to a specialist consumer who will pay a higher price
compared to a closer, non-specialist consumer who will pay a lower
price.
Old sheet or extrusion scrap which cannot be technically or eco-
nomically segregated, together with old aluminium castings from motor
vehicles, machinery, etc., and new industrial scrap which is in inconve-
nient form (swarf, turnings, etc.) are collected by merchants or moved
direct to the final type of recycling plant – the secondary aluminium
smelter. These plants are more numerous than primary aluminium
smelters and on a much smaller scale. A large secondary smelter would
have capacity of 30000tpy, while a large primary smelter would be over
200000tpy. Many secondary smelters have capacity under 10000tpy
and most are run by small companies independent of the primary
aluminium smelting or semi-fabricating industry.
Secondary smelters are designed to handle a wide range of alu-
minium scrap. The incoming material is inspected and may be hand
sorted or classified by methods such as heavy-media flotation to remove
waste material. It will then be melted in oil, gas or, in some cases,
electric induction furnaces. Various types of furnace (rotary hearth,
reverberatory, etc.) are used within the industry according to the type of
scrap being handled. In order to remove impurities and avoid oxidation,
a salt flux is added to form a cover on the surface of the melt. Salt fluxes
are a proprietary mix which might be, for example, 48.5% sodium chlo-
ride (common salt), 48.5% potassium chloride, 4% a complex fluoride
salt.
Molten metal is tapped from the furnace and alloys are added. The
product of most secondary smelters is foundry alloy – alloys such as
Aluminum Association 380.1 (similar to UK alloy LM24), which contains
9.5% silicon and 4% copper. A wide range of such alloys, with varying
contents of silicon from 5% to 20% and copper from 1% to 5%, with some
magnesium, are produced for use in the manufacture of aluminium
castings, including engine blocks, cylinder heads and a wide range of
automotive and engineering components. The automotive sector in
total is generally considered to take about 85% of the production of the
secondary smelting industry.
Almost all alloys produced in secondary smelters from scrap have
iron content in the range of 0.6% to 1%, which is brought into the process
by the scrap as a result of contamination during the product’s life and

Aluminium
subsequent handling. Such an iron content is satisfactory for casting

applications and for certain sheet applications (alloys 3103 and 3105
which are typically produced in the mini-mills described above), but is
well beyond the level tolerable for producing wrought aluminium prod-
ucts with particular performance or surface finish qualities, where iron
is typically below 0.5%. Primary aluminium to LME specifications has
only 0.2% iron.
Although most castings are produced from secondary aluminium
and have iron content above 0.5%, where metal requires guaranteed
high strength characteristics and structural integrity, as in car and truck
wheels, the specified iron content may be below 0.5%. In this case there
is a borderline between secondary alloys (e.g. alloy 356.1) and alloys
which can only be produced from primary metal (e.g. alloy 356.2).
Since October 1992 the LME has traded secondary aluminium
ingot (termed ‘aluminium alloy’ by the LME). Of the many possible
alloys which could be traded, the LME selected as the deliverable
qualities US alloy 380.1 and the similar German alloys DIN 226 and
Japanese alloy ADC12.
Secondary smelting processes can also produce certain other
products. These include powders or granules for use in the metallurgical
sector, for the deoxidisation of steel or other metals.
A final form of old aluminium scrap is aluminium foil. Large-scale
recycling of consumer foil has not been possible to date because of the
difficulty of separating foil from household refuse. Efforts are being
made by the industry, in response to government pressures to reduce the
volume of waste, to develop aluminium foil collection and recycling.
Unless collected in large quantities and densified, foil cannot be eco-
nomically remelted because losses in the furnace are very high. Foil
scrap, mainly from foil manufacturers or industrial consumers, can be
processed without melting into powders or flakes, which are used to
make pigments for the printing industry.
Dross
Whenever aluminium is melted or molten aluminium is held in a
furnace, dross is generated. It is the result of oxidation of the surface of
the metal in contact with the air or the separation of impurities from the
pure metal or alloy in the furnace. The dross floating on the surface of the
melt is a mixture of aluminium oxide, impurities and aluminium metal.
It is periodically skimmed from the surface of the metal in the furnace

and removed in pots for treatment, cooling and storage prior to removal
from the plant.
Dross which results from processing internal scrap has low
impurities and is ‘white’ dross. Dross which results from processing new
industrial scrap that has not been contaminated is also white dross,
similar to that from processing internal scrap. Dross which results from
processing old scrap generally has high impurities and contains salt.
This is referred to as ‘black’ dross. Black dross has a lower aluminium
content and is not a reactive substance (will not further oxidise). It is
normally contaminated with magnesium from the alloy in the scrap and
chlorides from the salt flux.
Dross is processed by specialist recyclers to extract the aluminium
content as remelt ingot. The salt slag and other waste products from sec-
ondary smelting and dross processing operations present a problem of
disposal. In some areas it is classified as a hazardous waste product and
must be dumped under controlled conditions. The disposal cost of slag
in Europe is commonly $50 per tonne or more, and this cost and the
regulation of disposal has raised interest in the recycling of salt slag.
Several proprietary processes have been developed since the early
1990s which aim to recover some aluminium from the slag and convert
the remainder into harmless products.
As described above, the market for recycled aluminium is in vari-

ous parts and the products of recycling serve distinct markets – princi-
pally foundry alloys, rolling slabs from UBCs and secondary billets.
Figure 1.3 provides some indication of the relative importance of the
sources of remelted metal in the USA by showing the quantities of metal
recycled from external scrap by secondary smelters, integrated compa-
nies (mainly processing UBCs into slab) and others (mainly indepen-
dent semi-fabricators remelting scrap into billets). Production by
secondary smelters was broadly flat from the late 1970s until the late
1980s, but accelerated in recent years because of the growth of demand
for aluminium castings in the automotive industry. Recycling by the
integrated producers has risen strongly and production by others also
grew in the 1990s.

Aluminium
3
million tonnes
Others
2
Integrated producers
2
Secondary smelters
1
0
1975 1980 1985 1990 1995
Years
1.3 Recycled aluminium: producers – USA.
The structure in Europe and Japan is different, with recycling by

integrated producers much less significant and the role of secondary
smelters larger. The expected growth of can recycling will move the
European and Japanese recycling industry structure closer to that of
the USA. A further significant development in the structure of the
aluminium recycling industry will be the establishment of organised
car recycling. With the car manufacturers becoming responsible for
programmes to recycle their end-of-life vehicles (ELVs), they will estab-
lish links with the larger scrap merchants, secondary smelters and per-
haps larger foundries producing car components. This development is
likely to favour the growth of the larger companies in the industry rather
than the smaller, more fragmented structure which characterises much
of the recycling sector today.
These various segments of the recycling industry do not compete
significantly with each other in the markets for end products because
each is serving a separate market. The prices of their products are, how-
ever, interlinked.
Integrated producers making rolling slabs from UBCs supply these
slabs to their affiliated rolling mills. To the extent that there is a market
in such slabs, which are identical to the products from primary smelter
cast houses, the prices are determined by the prices of slabs from the
primary aluminium producers. Those prices are in turn determined
essentially by the price of primary aluminium ingot, plus a premium

for alloys and shape. The price of primary aluminium today is essentially
determined by the London Metal Exchange price for primary alu-
minium. These price relationships are illustrated in Appendix Table 1.2.
Secondary billet is in a similar situation. The products are in princi-
ple identical to the billets from primary smelter cast houses and the
pricing is therefore the same, being determined by a premium over
LME primary aluminium.
As noted earlier, secondary ingot is now traded on the LME. There is
intense dispute in the secondary aluminium smelting sector about the
value of the LME contract and the meaning of its prices in the market. Up
to now the contract cannot be said to dominate the pricing of secondary
ingot, with producers and consumers still able to negotiate prices for
individual alloys at levels different from the LME. Because so much
secondary ingot is used in the automotive market, either directly at car
makers’ foundries or by foundries closely tied to the car industry, indi-
vidually negotiated prices continue and can vary between the important
geographical areas, particularly between the USA, the main countries of
Europe and Japan.
Over time the volume of trade on the LME can be expected
to increase, as it did steadily for primary aluminium, which started
trading in 1978, and as a result the pricing of secondary ingot should
become more uniform and may eventually be dominated by LME
pricing.
On average over the past ten years secondary ingot (alloy
380/LM24) has traded at a discount to primary ingot of around
$50/tonne but, when primary metal prices are low, secondary ingot
prices may be at a premium to primary metal. There is also a fairly
stable pricing structure for other major secondary alloys, as shown in
Appendix Table 1.2.
Appendix Table 1.3 presents key statistics for the world aluminium
industry from 1975 to 1996, with a long-term forecast. This shows that
total semi-finished aluminium consumption (aluminium in all forms)
increased from a cyclically low value of 14.3 million tonnes in 1975 to

Aluminium
35
30
25
million tonnes
20 Secondary
Primary
15
10
0
1975 1980 1985 1990 1995
Years
1.4 Aluminium: world production, 1975–97.
29.4 million tonnes in 1996, a compound growth of 3.6% per annum. In

1996 the largest consuming sector for aluminium products in the
Western world was the transport sector, accounting for 25%, followed
by packaging and construction. 1993 was the first year in which the
transport sector was the largest end-use, and reflects the increasing
use of aluminium in vehicles, particularly in the form of castings.
As already described, recycled aluminium has its major role in alu-
minium castings, which are mainly used in the transport sector, and in
aluminium can sheet, which is part of the packaging sector. These have
been the two most rapidly growing sectors of the aluminium market for
the past decade.
Appendix Table 1.3 shows that in 1996 the total metal supply for the
production of semi-finished products was some 29.7 million tonnes. Of
this, secondary aluminium (aluminium produced from external scrap,
as discussed earlier) was 8.7 million tonnes, equal to 29.3% of metal
supply. In 1975 secondary aluminium contributed 3.1 million tonnes,
equal to 19% of metal supply. Figure 1.4 shows the trend of metal supply
over the years. The quantity of aluminium recycled has therefore risen
at 5.3% per annum over the period from 1975, compared to the growth of
the total aluminium market of 3.6%.
Of the 8.7 million tonnes of secondary metal produced, at least 5
million tonnes went into aluminium castings. The largest producers of
secondary aluminium in 1996 are shown in Table 1.5. The USA, Japan,
Germany and Italy are estimated to account for 72% of the world pro-
duction of secondary aluminium between them.

Table 1.5 Major producers of secondary aluminium,

1996
m tonnes
USA 3.35
Japan 1.19
Germany 0.78
Italy 0.55
China 0.45
France 0.35
United Kingdom 0.30
Former USSR 0.20
World total 8.69
The forms in which aluminium becomes available as scrap and the

methods of collection were described in a previous section. We estimate
that some 10 million tonnes of external aluminium scrap were con-
sumed in 1996. As noted, over 5 million tonnes of scrap were consumed
in the form of internal scrap circulating within the aluminium industry.
Of the 10 million tonnes of external scrap consumed, we estimate that
4 million tonnes was new industrial scrap and 6 million tonnes was old
scrap.
The availability of scrap to meet the demand for recycled metal is
a constant issue for debate. Certain countries feel themselves perman-
ently short of aluminium scrap and this leads their commentators to
suppose that there is a general worldwide shortage.
New industrial scrap can only be recovered from products which
are being manufactured, i.e. which are going into current consumption.
In industrial countries a very high proportion of new industrial scrap is
recovered and provides a feed of material to replace part of the require-
ment for primary aluminium at semi-fabricators and to provide inputs
for secondary smelters. This will continue and the scope for increases in
this type of recycling is limited. It depends essentially on the volume of
production of semi-fabricated products and the trend to reduced scrap
losses in the fabrication process. The numerical estimates are based
on the assumption that new industrial scrap amounts to 15% of the
quantity of material taken into the fabricating industry and that all of
this is in principle available for recycling.

Aluminium
Old scrap can only be recovered from aluminium products which

have been sold into the economy, i.e. from past consumption. The cost
of remelting aluminium scrap is far less than the cost of producing pri-
mary aluminium. The cost of remelting and casting aluminium scrap is
of the order of $400 per tonne, including some profit for the smelter. The
cost of producing primary aluminium from alumina is of the order of
$1500 per tonne, including profit, for the lowest-cost primary smelters.
Allowing for melting losses, a secondary smelter can therefore normally
afford to pay at least $950 per tonne for aluminium scrap and be com-
petitive on the end product with a primary smelter.
Aluminium scrap costs far less than $950 per tonne to collect, sort
and transport to a smelter. For any level of market demand for the prod-
ucts which can be made from scrap, it will therefore almost always be
commercially attractive for merchants and consumers to recycle the
maximum quantities of scrap technically possible before primary alu-
minium products are used to make those products.
Consequently, aluminium scrap is a relatively valuable material
and is capable of long-distance, international transport. For these rea-
sons there is an incentive to collect it, and large quantities of easily recy-
clable metal will not be allowed to remain uncollected anywhere in the
world. Judging by the quantities of aluminium which have entered the
economy during this century, and particularly in the past 20 years, it
appears that there is a large stock of material which will become avail-
able for recycling and there will be a financial incentive to recycle it. As
aluminium beverage can consumption develops in Europe and other
parts of the world, the future supply of recyclable scrap will increase still
further. On this basis, therefore, we believe that the aluminium recycling
industry will have the raw material available to sustain some quite rapid
growth, at over 3% per annum into the long term.
The magnitudes involved are illustrated in Appendix Table 1.3. We
estimate that the world stock of old scrap available for collection in 1996
was over 86 million tonnes. Actual old scrap collection was 6 million
tonnes, figures suggesting that 7% of the available stock was collected in
that year. The stock of scrap available for collection will increase steadily
in the future and the quantity of old scrap which will have to be collected
each year will double to over 12 million tonnes by 2016. At that time
annual collection will be equal to less than 10% of the available stock.
Although this proportion is small, it is higher than has been required in
previous years.

An alternative benchmark indicator of the availability of scrap is

the quantities of scrap which will have to be collected each year in
relation to the quantity of aluminium entering the economy in that
year. On this measure the scrap collected in 1996 was equivalent to 35%
of the aluminium entering the economy (semi-finished aluminium
consumption). This proportion had increased from 26% in 1975. Our
forecast implies that it will continue to increase only modestly, to 38% by
2016.
We do not believe that in general the quantities of scrap which will
have to be collected will make it impossible for the forecasts of sec-
ondary aluminium consumption which we have used to be achieved.
As described earlier, the development of the aluminium recycling

industry has led to commercial arrangements between scrap generators
and scrap consumers. This includes arrangements for the buy-back of
scrap and the toll-conversion of scrap back into aluminium slabs, billets
and semi-fabricated products.
In the long term the relatively high value of aluminium will mean
that arrangements for recycling will be commercially driven and finan-
cially self-supporting. This has been the experience with the can recy-
cling industry in the USA. Part of the marketing of aluminium cans and
the sheet for them is, however, to promote both the environmental and
financial aspects of recycling. In order to do this, the aluminium and can
industries have found it necessary to engage in promotional pricing.
This is achieved by offering in the early years prices for aluminium cans
which are above market levels for other types of scrap. This induces the
establishment of collection networks by individuals, voluntary groups,
etc., which then become self-sustaining at market prices for scrap cans.
The European can market is at the stage where this type of promotional
pricing is still necessary.
Government assistance or incentives for the recycling of alumin-
ium should otherwise be a low priority, because the inherent commer-
cial value of aluminium scrap should be sufficient to ensure maximum
collection. The aluminium recycling industry is, however, concerned
about two aspects of legislation.
The first is the general problem of regulations which define non-
ferrous metal scrap in ways which make its collection, transport and

Aluminium
processing difficult. This general issue is covered elsewhere (see Part

Four, Chapter 1).
The second is the tendency for regulations concerning recycling to
include measures which discriminate between materials. Such actions
include the prohibition of aluminium beverage packaging in some
countries as a device to reduce consumer waste, and the imposition of
mandatory deposits on beverage containers as a device to encourage
the general recycling of containers. The aluminium industry believes
that these measures discriminate against the inherent recycling advan-
tage of aluminium packaging, which is its relatively low cost of recycling
and high value. The industry believes that, if left to market forces,
aluminium packaging would be preferred by manufacturers and
consumers because of its technical advantages and recycling value.
Measures which increase the apparent attractiveness of products which
are inherently less economic to recycle reduce the growth potential of
aluminium and subsidise the market position of these other products,
such as glass or plastic containers. The aluminium industry has not been
able to prove the validity of this position, but in the future it could
become an issue, for example, within the European Union, where the
interests of a single market and free competition between materials may
be in conflict with some of the environmental regulations imposed by
member states.
As noted earlier, the organised recycling of cars by their manu-
facturers will bring new arrangements for scrap recycling.
Our estimates of the trade in aluminium scrap and in relation to

consumption for some of the major countries are shown in Appendix
Table 1.4.
The United States is largely self-sufficient, but has significant trade.
Scrap imports come to the midwest and the east coast mainly from
Canada, while exports go from the west coast to the large importing
markets in Asia, Japan, Taiwan and Korea and from the southern states
to Mexico. Those Asian markets are also served with scrap and remelted
scrap ingot (RSI) from Russia and other countries of Eastern Europe. The
latter product, although an ingot, is used as scrap by the Japanese
industry.
In Europe the flow of material is essentially from southern

Germany and Eastern Europe into Italy and from the UK and Belgium
into northern Germany and France.
Apart from the Asian market, which is fundamentally short of scrap
for its growing secondary smelting and remelting industries and must
be supplied by ocean movements of scrap, most international scrap
trade is relatively short distance and results from local geographical
imbalances.
A scheme of price relationships for aluminium products at all

stages of the primary and secondary metal markets is shown in
Appendix Table 1.2. This shows our assessment of typical relationships
between all the products, starting from a given level of LME prices for
primary aluminium. We believe that in essence all the product prices
can be related back to LME prices for primary aluminium. This includes
the prices for aluminium scrap.
In the medium term the price of secondary aluminium alloys is
determined by the price of primary aluminium because primary metal
can always be substituted for secondary metal in the production of
castings or wrought products if secondary prices are too high. In the
medium term the maximum price of the common scrap grades
used in secondary smelters is determined by the price for the sec-
ondary smelter’s foundry alloy. If scrap prices are too high, secondary
smelters cannot earn a sufficient return on investment and will close.
In the short term these relationships can be broken for periods of
time. If demand for scrap is high, prices can rise above their long-term
level for a while. If prices of secondary foundry alloy, following primary
metal prices, are driven down to exceptionally low levels, forcing scrap
prices down, there comes a point where scrap supply is reduced because
the costs of collection, transport and processing make scrap supply
uneconomic. This appears to be reached when scrap prices fall into the
range of $700 per tonne. At this point scrap supplies are reduced and the
price of secondary ingot can fall no further.
The pricing scheme in Appendix Table 1.2 indicates, for example,
that if the LME price of primary ingot is $1650/tonne, secondary
alloy 380 for the foundry industry will be $1600 and aluminium
scrap from old cast material will be $1164/tonne and from used bever-

Aluminium
3000 3000
2500 2500
Prices ($/tonne)
Primary
2000 2000
Secondary
1500 1500 Scrap
1000 1000
500 500
1984 1986 1988 1990 1992 1994 1996 1998
Years
1.5 Aluminium ingot and scrap: prices, 1984–98.
age cans $1034/tonne in densified form and less in other, less processed
forms.
If the LME price of primary aluminium falls to $1250/tonne, as in
early 1999, the price of secondary alloy would normally fall to $1300 and
old cast aluminium scrap would drop to $900/tonne.
Price relationships between primary aluminium, secondary ingot
and scrap are shown in Appendix Table 1.5 and Figure 1.5.

Appendixes
Appendix Table 1.1 Specifications of aluminium products – chemical
Product % by weight
Chapter 1 / page 26
Al-T Cu Fe Mg Si Ti Zn Cr Mn B V Other Other
each total
Remelt ingot
AA 1050 99.5% 99.5 0.05 0.40 0.05 0.25 0.030 0.03 — — — — 0.03 0.15
99.6% 99.6 0.05 0.35 0.03 0.25 0.030 0.03 — — — — 0.03 0.15
AA P1020A LME 99.7% 99.7 0.03 0.20 0.03 0.10 0.030 0.03 — — — — 0.03 0.10
99.7% 99.7 0.03 0.20 0.03 0.20 0.030 0.03 — — — — 0.03 0.10
AA 1080 99.8% 99.8 0.03 0.20 0.02 0.15 0.020 0.02 — — — — 0.03 0.10
AA 1350 99.5 0.05 0.40 — 0.10 0.015 0.05 0.01 0.01 0.050 0.005 0.03 0.10
Electrical conductor 99.6% 99.6 0.01 0.35 0.01 0.10 0.010 0.02 — 0.005 0.015 0.005 0.03 0.15
Electrical conductor 99.7% 99.7 0.01 0.20 0.01 0.10 0.005 0.02 — 0.005 0.015 0.005 0.03 0.15
Slab/rolled products
AA 1050 99.5% 99.5 0.05 0.40 0.05 0.25 0.050 0.07 — — — — 0.03 0.15
AA 1080 99.8% 99.8 0.03 0.15 0.02 0.15 0.020 0.06 — — — — 0.02 0.15
AA 1100 99.0 0.20 0.40 — 0.25 0.015 0.05 — — — — 0.05 0.15
AA 1200 99.0 0.05 0.40 — 0.25 0.015 0.10 — 0.05 — — 0.05 0.15
AA 3004 rem. 0.05 0.40 1.00 0.25 0.015 0.10 0.10 1.20 — — 0.05 0.15
AA 3103 rem. 0.10 0.70 0.30 0.50 — 0.20 0.10 1.50 — — 0.05 0.15
AA 3105 rem. 0.30 0.70 0.80 0.50 0.100 0.40 0.20 1.50 — — 0.05 0.15
AA 5082 rem. 0.05 0.40 4.50 0.25 0.015 0.10 0.10 0.05 — — 0.05 0.15
AA 5182 rem. 0.05 0.40 4.50 0.25 0.015 0.10 0.10 0.35 — — 0.05 0.15

Billet/extruded products
AA 2014 heat-treat rem. 5.00 0.50 0.80 0.90 0.15 0.25 0.10 1.20 — — 0.05 0.15
AA 2024 heat-treat rem. 4.40 0.50 1.50 0.90 0.15 0.25 0.10 0.60 — — 0.05 0.15
AA 6061 heat-treat rem. 0.40 0.70 1.20 0.80 0.15 0.25 0.35 0.15 — — 0.05 0.15
AA 6063 heat-treat rem. 0.10 0.35 0.90 0.60 0.10 0.10 0.10 0.10 — — 0.05 0.15
AA 7075 heat-treat rem. 1.60 0.40 2.50 0.35 — 5.60 0.23 0.50 — — 0.05 0.15
Foundry alloys
LM0 99.5 0.03 0.40 0.03 0.30 — 0.50 — 0.03 — —

AA 384.2 LM2 rem. 2.50 1.00 0.30 11.50 0.20 0.20 — 0.50 — —
AA 319.2 LM4 rem. 4.00 0.80 0.15 6.00 0.20 0.20 — 0.60 — —
AA 514.1 LM5 rem. 0.10 0.60 6.00 0.30 0.20 0.20 — 0.70 — —
AA 413.2 LM6 rem. 0.10 0.60 0.10 13.00 0.20 0.20 — 0.50 — —
AA 360.2 LM9 rem. 0.10 0.60 0.60 13.00 0.20 0.20 — 0.70 — —
AA 520 LM10 rem. 0.10 0.35 11.00 0.25 0.20 0.20 — 0.10 — —
AA 222.1 LM12 rem. 11.00 1.00 0.40 2.50 0.20 0.20 — 0.60 — —
AA 332.1 LM13 rem. 1.50 1.00 1.50 12.00 0.20 0.20 — 0.50 — —
AA 355.1 LM16 rem. 1.50 0.60 0.60 5.50 0.20 0.20 — 0.50 — —
AA 443.1 LM18 rem. 0.10 0.60 0.10 6.00 0.20 0.20 — 0.50 — —
AA 413.1 LM20 rem. 0.40 1.00 0.20 13.00 0.20 0.20 — 0.50 — —
LM21 rem. 5.00 1.00 0.30 7.00 0.20 0.20 — 0.60 — —
LM22 rem. 3.80 0.60 0.05 6.00 0.20 0.20 — 0.60 — —
AA 380.1 LM24 rem. 4.00 1.30 0.30 9.50 0.20 0.20 — 0.50 — —
AA 356.1 LM25 rem. 0.10 0.50 0.60 7.50 0.20 0.20 — 0.30 — —
LM26 rem. 4.00 1.20 1.50 10.50 0.20 0.20 — 0.50 — —
LM27 rem. 2.50 0.80 0.30 8.00 0.20 0.20 — 0.60 — —
LM28 rem. 1.80 0.70 1.50 20.00 0.20 0.20 — 0.60 — —
LM29 rem. 1.30 0.70 1.30 25.00 0.20 0.20 — 0.60 — —
AA 390 LM30 rem. 5.00 1.10 0.70 18.00 0.20 0.20 — 0.30 — —
AA 356.2 rem. 0.10 0.20 0.45 7.50 0.20 0.10 — 0.10 — — 0.05
Aluminium
Chapter 1 / page 27
Appendix Table 1.2 Price relationships for aluminium products ($ per tonne)
Product Alloy Margin above Product
LME primary price
Primary aluminium remelt ingot

(FOB LME warehouse)
Chapter 1 / page 28
LME 3-month price alloy 1020 1650
LME grade remelt standard ingot on truck, EU duty paid alloy 1020 94 1744
LME grade sow or T-ingot on truck, EU duty paid alloy 1020 87 1737
Remelt standard ingot, 99.5%, in warehouse, EU duty unpaid alloy 1050/AO -100 1550
Remelt standard ingot, 99.5%, on truck, EU duty paid alloy 1050/AO -2 1648
Remelt standard ingot, 99.80%, on truck, EU duty paid alloy 1080 150 1894
Slab/rolled products
(FOB producing mill)
Rolling slab alloy 1050 164 1814
Rolling slab alloy 3004 237 1887
Standard sheet, 0.9mm alloy 1050 764 2414
Can body stock, 0.30mm alloy 3004 887 2537
Can end stock alloy 5082 1637 3287
Plate, 25mm alloy 5083 2214 3864
Auto body or lithographic sheet various 2364 4014
Billet/extruded products
(FOB producing mill in main consuming areas)
Extrusion billet alloy 6063 254 1904
Standard extrusion alloy 6063 1104 2754

Aluminium scrap
(delivered to secondary smelter in main consuming areas)
New cuttings -315 1335
Old cast -486 1164
Extrusion scrap -99 1551
Used beverage cans
baled/densified -616 1034

loose, flattened -691 959
loose, whole -766 884
Foundry alloys
Secondary foundry ingot – LME grade alloy 380 (LM24) -50 1600
Secondary foundry ingot – other grades alloy 319 (LM4/27) 18 1668
alloy 356.1 (LM25) 109 1759
Primary foundry ingot alloy 356.2 489 2139
Aluminium castings
(FOB foundry)
Cylinder block casting alloy 380 per tonne 4100
per casting 68
Car wheel alloy 356.2 per tonne 4639
per casting 39
Competitive prices of other materials
Equivalent price of CR steel sheet, 0.9mm, by area 825
Equivalent price of foundry iron, by volume 547
Equivalent price of foundry zinc, by volume 608
Equivalent price of foundry magnesium, by volume 2541
Aluminium
Chapter 1 / page 29
Appendix Table 1.3 Summary of world aluminium metallics (million tonnes)
Item Forecasts Annual % change
1975 1980 1985 1990 1993 1994 1995 1996 1997 1998 1999 2000 2001 2006 2011 2016 1975– 1995–
1995 2016
Semi-finished consumption 14.3 19.7 22.0 26.5 25.5 27.7 29.0 29.4 31.0 31.6 31.8 32.5 33.9 39.2 44.6 50.3 3.6 2.7
Semi-finished production 14.5 20.0 22.2 26.6 26.0 28.2 29.4 29.9 31.3 31.9 32.1 32.8 34.2 39.7 45.2 51.1 3.7 2.7
Castings 2.5 3.6 4.2 5.4 5.6 6.1 6.4 6.7 7.1 7.2 7.2 7.3 7.6 9.1 10.5 12.0 5.0 3.0
Semi-fabricated 12.0 16.4 18.0 21.2 20.4 22.1 23.0 23.2 24.2 24.7 24.9 25.5 26.6 30.6 34.7 39.1 3.4 2.6
rolled products 10.3 11.6 11.9 13.8 16.0 18.2 20.5 2.6
extruded products 6.2 6.7 7.0 8.2 9.5 10.9 12.4 2.7
wire rod/wire 2.3 2.2 2.5 2.6 2.8 3.1 3.4 1.5
other/errors 1.7 1.6 1.6 2.1 2.3 2.5 2.8 2.8
Losses, stock change etc 1.4 1.0 -0.4 -0.0 1.4 -0.9 -1.2 -0.2 -0.0 0.4 1.2 1.5 1.0 -1.5 -1.0 -0.5
Metal supply for semi-finished 15.9 21.0 21.8 26.6 27.3 27.3 28.2 29.7 31.2 32.3 33.3 34.3 35.2 38.2 44.2 50.6 3.2 2.8
Secondary aluminium production 3.1 4.6 5.3 7.2 7.6 8.2 8.5 8.7 9.4 9.7 9.8 10.0 10.4 12.3 14.3 16.6 5.3 3.3
secondary share (%) 19.4 22.0 24.1 27.1 27.8 29.9 30.0 29.3 30.2 29.9 29.3 29.1 29.4 32.1 32.4 32.8
Primary aluminium production 12.8 16.4 16.6 19.4 19.7 19.1 19.7 21.0 21.8 22.6 23.5 24.3 24.9 25.9 29.9 34.0 2.5 2.6
stock change etc. -1.4 -0.8 0.4 -0.1 -1.6 0.7 0.8 -0.2 -0.1 -0.6 -1.4 -1.7 -1.2 1.1 0.5 -0.3
Primary aluminium consumption 11.5 15.6 16.9 19.3 18.2 19.8 20.5 20.8 21.7 22.0 22.1 22.6 23.6 27.0 30.3 33.7 3.0 2.4
Scrap supply for secondary 3.7 5.4 6.0 8.8 9.0 9.6 9.9 10.2 10.9 10.9 11.0 11.2 11.4 14.2 16.6 19.3 5.2 3.2
new/prompt scrap 1.9 2.7 3.0 3.6 3.4 3.7 3.9 4.0 4.2 4.3 4.3 4.4 4.6 5.3 6.0 6.8 3.7 2.7
old scrap 1.8 2.7 3.1 5.2 5.5 5.8 6.0 6.2 6.7 6.7 6.8 6.8 6.8 8.9 10.6 12.5 6.6 3.6
Scrap ratio to semi-finished 0.257 0.274 0.274 0.332 0.351 0.345 0.341 0.347 0.351 0.347 0.347 0.344 0.337 0.363 0.372 0.383
Scrap stock available for recovery 24.4 40.0 57.4 71.6 78.3 80.8 83.7 86.5 89.0 91.1 93.1 94.7 97.2 109.1 120.2 133.2 6.5 2.2
recovery rate 0.072 0.069 0.053 0.073 0.071 0.072 0.071 0.072 0.075 0.073 0.073 0.072 0.070 0.082 0.088 0.094
Western countries only

Semi-finished production 17.5 21.6 22.9 25.3 25.9 29.6 33.7 38.0 42.6 2.4
Castings 3.6 4.4 4.9 5.3 5.6 6.5 7.6 8.6 9.6 2.6
Semi-fabricated 13.8 17.1 18.0 19.9 20.3 23.1 26.1 29.3 33.0 2.3
rolled products 7.5 9.0 9.4 10.8 11.0 12.6 14.3 16.1 18.1 2.4
extruded products 4.2 5.2 5.5 6.0 6.3 7.2 8.1 9.3 10.5 2.5
wire rod/wire 1.6 1.5 1.6 1.6 1.9 1.9 2.0 2.1 2.3 1.1
other/errors 0.5 1.3 1.5 1.4 1.1 1.5 1.6 1.8 2.0
Aluminium
Appendix Table 1.4 Aluminium scrap consumption and trade, 1995

(000 tonnes scrap)
Region/Country Consumption Exports Imports Net trade
United States 3690 434 433 2

Japan 1389 10 176 -166
Germany FR 838 479 294 185
Italy 642 11 244 -233
China PR 500 .. .. ..
France 408 103 160 -57
United Kingdom 314 105 75 31
Netherlands 225 157 204 -47
Spain 166 7 38 -31
Mexico 151 .. .. ..
Russia 147 .. .. ..
Taiwan 147 24 138 -114
Canada 114 237 56 182
Others 1134 310 282 28
Identified world total 9865 1878 2100 -221

Appendix Table 1.5 Prices of secondary aluminium
Period USA Germany UK Japan LME 3-month Alloy Scrap USA Margin
premium
Alloy 380 Alloy 226 Alloy LM 24 Alloy ADC 12 Alloy Primary New Old cast Blend $/t
$/t
c/lb. $/t DM/kg $/t £/t $/t yen/kg $/t $/t $/t cuttings c/lb. $/t 35:65
c/lb. $/t
Quarters
1988 Q1 84.3 1859 3.37 2011 1073 1905 276 2146 2064 -205 80.5 1775 59.5 1312 1474 385
Chapter 1 / page 32
Q2 97.5 2149 4.21 2491 1187 2195 300 2396 2503 -354 94.2 2076 67.2 1481 1689 460
Q3 95.2 2098 4.52 2432 1313 2226 307 2344 2568 -470 95.5 2105 67.5 1488 1704 394
Q4 91.0 2006 4.41 2572 1262 2218 317 2499 2332 -326 90.3 1991 64.5 1422 1621 385
1989 Q1 93.8 2069 4.48 2432 1215 2134 320 2011 2192 -123 91.5 2017 67.8 1495 1678 391
Q2 90.5 1995 4.34 2256 1194 1966 322 1842 2014 -19 87.5 1929 66.5 1466 1628 367
Q3 75.5 1664 4.13 2146 1208 1926 328 1948 1750 -86 72.0 1587 53.7 1183 1325 340
Q4 70.7 1558 3.60 1959 1125 1779 310 2278 1707 -149 66.3 1462 51.8 1143 1255 303
1990 Q1 65.3 1440 3.03 1785 990 1636 292 2011 1525 -85 60.8 1341 45.3 999 1119 321
Q2 73.8 1628 3.28 1961 1064 1761 285 1842 1555 72 63.2 1393 52.8 1165 1244 383
Q3 72.7 1602 3.00 1868 934 1635 292 1948 1799 -197 67.8 1495 52.2 1150 1271 331
Q4 69.8 1540 2.99 1977 917 1773 298 2278 1661 -122 64.7 1426 49.3 1088 1206 334
1991 Q1 64.7 1426 2.74 1822 853 1649 283 2132 1537 -112 59.3 1308 48.0 1058 1146 280
Q2 60.8 1341 2.58 1498 885 1526 265 1911 1352 -11 55.3 1220 44.3 977 1062 279
Q3 59.8 1319 2.41 1365 808 1339 230 1664 1286 33 51.7 1139 41.0 904 986 333
Q4 54.2 1194 2.15 1310 738 1317 205 1560 1155 40 44.2 974 38.8 856 897 297
1992 Q1 57.5 1268 2.27 1432 764 1302 197 1559 1266 1 51.8 1143 39.8 878 971 297
Q2 63.3 1396 2.56 1561 888 1579 213 1586 1325 71 53.7 1183 46.0 1014 1073 323
Q3 59.5 1312 2.27 1553 782 1499 207 1583 1320 -8 48.7 1073 40.3 889 953 358
Q4 54.7 1205 2.23 1474 852 1357 197 1583 1204 2 47.3 1044 35.0 772 867 338
1993 Q1 58.0 1279 2.17 1328 925 1355 190 1559 1068 1209 70 50.0 1102 40.3 889 964 315
Q2 55.5 1224 2.13 1329 928 1426 177 1571 1018 1155 68 46.0 1014 37.3 821 889 335
Q3 56.2 1238 2.17 1277 915 1371 160 1483 1039 1185 53 42.5 937 38.5 849 880 359
Q4 54.7 1205 2.15 1285 892 1329 143 1344 976 1088 117 38.0 838 33.8 746 778 427
1994 Q1 61.3 1352 2.35 1360 935 1395 147 1350 1146 1265 87 45.2 996 41.2 908 938 414

Q2 69.0 1521 2.89 1721 1142 1707 175 1674 1358 1361 160 49.7 1095 47.7 1051 1066 455
Q3 74.7 1646 3.03 1919 1203 1851 183 1833 1556 1531 115 55.5 1224 52.0 1146 1173 473
Q4 86.7 1911 3.19 2078 1187 1891 197 2002 1824 1843 67 66.2 1459 61.3 1352 1389 521
1995 Q1 95.3 2102 3.58 2373 1318 2081 228 2313 1916 1963 138 71.8 1584 65.5 1444 1493 609
Q2 80.8 1782 3.42 2439 1243 1988 213 2483 1700 1809 -27 63.2 1393 56.7 1249 1299 483
Q3 79.5 1753 2.97 2086 1113 1755 190 2124 1676 1861 -108 59.8 1319 56.2 1238 1267 486
Q4 71.8 1584 2.69 1887 983 1535 185 1805 1457 1696 -112 53.2 1172 48.5 1069 1105 478
1996 Q1 69.0 1521 2.57 1756 949 1455 177 1723 1409 1623 -101 54.5 1202 46.7 1029 1089 432
Q2 67.7 1492 2.57 1688 932 1412 190 1776 1346 1587 -95 52.7 1161 48.2 1062 1097 395
Q3 65.3 1440 2.54 1699 893 1387 190 1761 1275 1479 -38 49 1077 43.3 955 998 443
Q4 63.6 1402 2.52 1659 854 1388 188 1693 1310 1457 -55 49 1084 43.8 966 1008 394
1997 Q1 72.0 1587 2.94 1807 957 1576 203 1714 1522 1625 -38 56 1231 52.2 1150 1178 409
Q2 75.2 1657 3.31 1946 973 1589 225 1857 1487 1610 47 58 1279 53.7 1183 1217 441
Q3 74.3 1639 3.36 1871 948 1567 217 1890 1477 1616 27 58 1271 53.3 1176 1209 433
Q4 75.0 1653 3.37 1919 958 1583 215 1741 1453 1602 52 58 1268 50.7 1117 1170 484

1998 Q1 70.8 1562 3.31 1828 918 1502 215 1672 1365 1484 77 56 1224 48.8 1077 1128 434
Q2 66.8 1472 3.14 1742 858 1422 208 1581 1277 1409 63 53 1171 45.1 995 1057 415
Q3 58.3 1286 2.96 1674 790 1310 200 1439 1184 1344 -58 43 944 37.0 816 861 425
Q4 57.5 1268 2.67 1601 723 1212 1112 1300 -33 43 944 36.0 794 846 421
Years
1984 66.8 1472 4.19 1495 957 1299 376 1593 1373 99 52.4 1155 42.3 932 1010 462
1985 51.3 1132 3.74 1264 895 1162 329 1349 1123 9 40.9 902 32.4 715 780 351
1986 53.4 1178 3.01 1371 805 1179 240 1406 1290 -113 47.2 1040 35.1 773 867 311
1987 66.5 1467 2.91 1613 923 1513 246 1679 1561 -94 61.0 1346 45.3 999 1120 347
1988 92.0 2028 4.13 2377 1209 2136 300 2346 2367 -338 90.1 1987 64.7 1426 1622 406
1989 82.6 1822 4.14 2198 1185 1952 320 2020 1916 -94 79.3 1749 60.0 1322 1471 350
1990 70.4 1552 3.07 1898 976 1701 292 2020 1635 -83 64.1 1414 49.9 1100 1210 342
1991 59.9 1320 2.47 1499 821 1458 246 1817 1333 -13 52.6 1160 43.0 949 1023 297
1992 58.8 1295 2.33 1505 821 1434 203 1578 1279 17 50.4 1111 40.3 888 966 329
1993 56.1 1236 2.15 1305 915 1370 168 1489 1025 1159 77 44.1 973 37.5 826 878 359
1994 72.9 1608 2.86 1770 1117 1711 175 1715 1471 1500 108 54.1 1193 50.5 1114 1142 466
1995 81.9 1805 3.16 2196 1165 1840 204 2181 1687 1832 -27 62.0 1367 56.7 1250 1291 514
1996 66.4 1464 2.55 1701 907 1410 186 1738 1335 1536 -73 51.3 1131 45.5 1003 1048 416
1997 74.1 1634 3.24 1886 959 1575 215 1794 1483 1619 15 57.5 1268 52.2 1150 1191 443
1998 63.2 1393 3.01 1705 820 1359 1233 1380 12 48.5 1068 41.5 914 968 425
Aluminium
Chapter 1 / page 33
Average 70.7 1560 3.01 1822 990 1631 231 1870 1596 -36 59.5 1311 49.2 1086 1165 395
1988–98
2 Copper
Martin Thompson


2.2.1 Pyrometallurgical process
2.2.2 Hydrometallurgical process

2.3.1 Production, exports, imports and consumption
2.3.2 Market pricing


Copper has been produced and used for longer than any other
industrial metal, since copper and gold were the first metals to be dis-
covered, probably during the seventh millennium  in the Near East. Of
the two original metals, copper, which could be beaten into all manner
of weapons and tools, was by far the more important for the develop-
ment of mankind. It was therefore logical that the many centuries which
witnessed the gradual ending of the Stone Age should have been named
the ‘Chalcolithic’ or Copper Period, and that after the discovery that the
admixture of a small quantity of tin would result in a much harder metal,
the period from then until the spread of the use of iron in the first millen-
nium  should come to be known as the Bronze Age, after the modern
name for this most ancient of alloys.
Although the advent of iron brought to an end the supremacy
of copper and its alloys among the known metals, they continued to
be prized for their many qualities. In spite of the discovery of other
metals, and also of the comparative rarity of its occurrence, today
copper’s consumption is still only exceeded among the metals by that
of iron and aluminium.

and end-uses
Apart from gold, copper is the only metal to be coloured, being a

brownish red when clean. Its density is 8.9g/cm3, making it lighter than
lead (11.3g/cm3) but heavier than iron (7.9g/cm3) and of course much
heavier than aluminium (2.7g/cm3); at 1083°C copper’s melting point
is well below that of iron (1536°C) but higher than that of aluminium
(660°C). Its atomic number is 29 and its atomic weight is 63.54. It is
non-magnetic. Its chemical symbol is Cu, derived from its Latin name,
cuprum.
Copper’s most important property as regards its present-day appli-
cations is undoubtedly its electrical conductivity. As can be seen from
Table 2.1, when related to mass it is well above iron and the other metals
that are available in quantity, and is only marginally exceeded by silver;
however, it should be noted that aluminium has better conductivity
related to weight, being only 30% of copper’s weight but having 62% of its

Table 2.1 Electric and thermal conductivity of copper

relative to other metals
Electric conductivity Thermal conductivity
Silver 106 108

Copper 100 100
Gold 72 76
Aluminium 62 56
Zinc 29 29
Iron 18 17
Lead 8 9
Source: Base Metals Handbook.
conductivity. Copper is equally successful as a conductor of heat, again

far exceeding other common metals.
These outstanding qualities as a conductor of electricity and heat
are complemented by copper’s other attributes. It has excellent me-
chanical properties and can be easily worked, joined, forged, extended,
rolled and drawn into very fine wire. It can be made harder or softer,
more flexible or ductile or easier to cast or work either by treatment or by
alloying with other metals. Alloying gives copper even greater adaptabil-
ity, with a great range of mixtures and qualities available; the common-
est alloy groups are bronzes with typically 3–6% tin and brasses which
may contain more than 40% zinc. The colours of copper and its alloys,
ranging from dark red to light yellow, make them uniquely suitable for
many decorative and artistic uses.
Finally, all copper’s attributes are enhanced by its durability. Its oxi-
dation when exposed to the atmosphere is limited to the formation of a
green patina on its surface; it can resist organic acids and alkalis apart
from ammonia, and can normally be buried or immersed in water with-
out risk of corrosion. This durability, to which many perfectly preserved
ancient artefacts bear witness, is of particular importance to a metal
which in many of its functions, particularly electric, is concealed from
view and so cannot be visually checked for corrosion.
Primary and secondary refined copper is usually produced by an

electrolytic refinery in the form of cathodes or sheets, or in a few cases,
wirebars (described below). These are cast into wire rod, billets, cakes

Copper
Table 2.2 End-use distribution of semi-fabricated copper

products, 1995
%
Construction 35
Electrical 26
Machinery 15
Transport 11
Consumer and other 13
Source: CRU.
or other shapes according to the product for which the metal is to be

used.
The most important product by a considerable margin is wire,
which is drawn from wire rod. Electrical wire, in a great range of gauges,
is used for a wide variety of applications including generators, trans-
formers, mains power lines, building, automobile and appliance wiring,
electric motors and telecommunications. Although aluminium cable is
used for overhead power lines, and fibre optics for telecommunication
trunk lines, the shorter distance and domestic lines are generally still
copper, which also, often as brass, provides other electrical equipment
such as plugs, sockets and switches.
The next most important application is non-electric use in con-
struction, including plumbing tubes and tanks, air conditioning, and
roofing, flashing and other architectural applications. There are many
other smaller outlets for the metal, including valves and other fittings
in machines, automobile radiators, condensers and heat exchangers,
chemicals, coins, ordnance and consumer goods.
Lack of statistics and commercial reticence on the part of manu-
facturers make an accurate division of refined copper consumption
between the various applications impossible. However, estimated end-
use distribution of semi-fabricated products (wire, tube, etc) in the
Western World by market sector is as shown in Table 2.2.
In fact, all the market sectors include copper in electrical applica-
tions, particularly building wiring which is included in construction,
and which is probably the biggest single outlet for copper, both electric
and non-electric. In Copper Development Association (CDA) Inc.’s
analysis of the United States’ copper consumption in 1995 building
wiring accounted for 15% of the total, and other overtly electrical appli-
cations, including power utilities (9%), automotive electrical and

telecommunication (both 7%), totalled 35%, giving electrical outlets

50% of the total. Plumbing and heating accounted for 14%. The distribu-
tion in different countries varies considerably, but world-wide electrical
application of all sorts accounts for more than half of total refined cop-
per consumption.
Copper accounts for perhaps 0.005% or less of the earth’s crust,

which is rare in comparison with aluminium (8%) or iron (5%). It can
therefore only be extracted where it is heavily concentrated. Copper
normally occurs in chemical combination with other elements in min-
eral forms, the most common being chalcopyrite, a sulphide of copper
and iron, which accounts for perhaps 50% of total copper deposits.
Bornite and chalcocite are also common copper sulphides. On the
surface, copper sulphides oxidise, but copper may also occasionally be
found in metal form.
Nearly all the large deposits which are worked today are relatively
low grade, often containing under 1% copper, since those with signifi-
cantly higher concentrations tend to be too small to be economical.
About two-thirds of total Western World copper mine production is con-
centrated in the western states of the Americas, where deposits follow
the line of geological faults which stretch from Chile to British Columbia;
other major mining countries include Indonesia and Papua New
Guinea, Australia, Russia, Kazakhstan, China, Poland and Zambia
(political turmoil has all but totally destroyed the Congo’s once substan-
tial production). The low grade of most deposits requires open pit min-
ing on a huge scale in order to obtain sufficient metal.
2.2.1 Pyrometallurgical process
Two separate types of process are used to extract the copper from
the ore; the first, which can treat sulphide ores and which accounts for
around 80% of Western World production, is pyrometallurgy, by which
copper is separated from the other elements with which it has been
combined in the ore by heat (smelting). This process, which in its essen-
tials has been used since copper was first extracted from rock, involves
crushing the ore in mills until it has been reduced to the consistency

Copper
of very fine sand, and then separating the particles of copper from
the waste by flotation, thus concentrating the ore to contain usually
between 20 and 40% copper.
The concentrates, sometimes after drying, are then fed into a
smelting furnace in which, after heating, copper matte is formed, con-
sisting of 50–75% copper together with sulphur, iron and any precious
metals. This is drawn off separately from the slag, which has been parted
by gravity. In most modern smelters the primary source of heat in the
furnace is the sulphur in the ore itself, which represents a major saving in
energy. The molten matte is transferred to a converter, into which air is
blown, removing the iron and sulphur by oxidisation. The resulting ‘blis-
ter’ copper, containing around 99% copper, is remelted and cast into
sheets called anodes. Environmental regulations now usually require
the sulphur dioxide generated by the smelting and converting processes
to be recovered and converted into sulphuric acid; the production of one
tonne of anode will usually result in the production of three tonnes of
sulphuric acid. The acid is usually sold, and often used in neighbouring
leaching operations.
As explained below, some scrap may also be introduced at either
the smelting or conversion stage.
The final stage in the production of high-grade copper by this
process is refining; for centuries this was done by further heating, but
today the normal process is by electro-refining. This is effected by the
transferring of copper from the anodes to thin sheets of pure copper
lying between the anodes in a bath of electrolyte. Electric current is
passed through the electrolyte, electro-chemically dissolving the cop-
per in the anode, which is attracted onto the sheets of pure copper. The
result is refined electrolytic cathode copper, of over 99.99% purity, in
sheets weighing 110–125kg each, and ready to be drawn into wire rod or
cast into shapes for fabrication.
2.2.2 Hydrometallurgical process
The second process for extracting copper is hydrometallurgy,

which accounts for a rapidly increasing proportion of production. This
is used mainly on oxide ores which may be difficult to concentrate by
flotation. The most widely used process today involves the ore being
leached with sulphuric acid and the copper being extracted from the
resulting solution by electrowinning. Occasionally, the material to be

leached may be treated in situ, but usually previously mined low-grade

ore or waste is treated where it lies, or it may be crushed and treated in a
heap or in a vat, or stirred with the acid in a tank. A sulphuric acid solu-
tion is pumped onto or into the material to be leached and the copper-
bearing liquor is collected; the cycle time varies from a matter of days to
years. The copper is usually recovered from the liquor by solvent extrac-
tion by selective organic reagents which extract only the copper from the
leach liquor. The copper-bearing solution separates from the leachate
by gravity (the leachate having lost its copper content), and is then
mixed with sulphuric acid to produce a concentrated copper sulphate
solution from which copper metal is extracted by electrolysis in a tank.
Since the copper is already in the electrolyte, non-dissolving anodes,
usually of lead alloy, are used. Cathodes of refined copper, similar to
those from the pyrometallurgical process, are produced.
Occasionally sub-standard cathodes are remelted and cast into
wirebars (oblong ingots) for rolling into wire rod, but the continuous
casting process for wire rod production has made the wirebar stage
unnecessary in nearly all plants.
2.3.1 Production, exports, imports and consumption
Mine production of copper in the Western World in 1997 totalled

9.43 million tonnes, according to the data at present available. Most of
this came from countries in the Americas as is shown in Table 2.3.
Table 2.3 Copper mine production, 1997 (’000s tonnes)
Chile 3392
United States 1940
Canada 660
Australia 558
Indonesia 548
Peru 503
Mexico 393
Zambia 331
Other countries 1102
Total 9427
Source: World metal statistics (WMS).

Copper
Table 2.4 Refined copper production, 1997

(’000s tonnes)
United States 2450

Chile 2117
Japan 1279
Germany 674
Canada 561
Belgium 386
Peru 384
Mexico 297
Other countries 2658
Total 10805
Source: WMS.
Refined production (i.e. metal which has been produced in a refin-

ery by one of the processes described in the previous section) totalled
10.81 million tonnes, and it will be seen in Table 2.4 that its geographical
distribution differs markedly from mine production.
Many copper mines do not have their own integrated smelters and
refineries, for a variety of reasons; many are too small (a smelter is
unlikely to be financially attractive if of less than 100000 tonnes capa-
city); there is often a natural desire to avoid the large additional capital
cost of a smelter; some may produce complex concentrates which are
best blended with other feed; and, most importantly, a large market for
‘custom’ concentrates, that is to say concentrates which are not smelted
at the mine, has grown up over the years. Some smelters have been built
near the consumers of metal rather than the mines, as in South Korea
and Germany; in other cases mines with integrated smelters have
reduced their output or closed completely, thus leaving unused capacity
in their smelters which must be filled with purchased concentrates if
production is to be maintained at an acceptable level. In consequence, a
substantial proportion of copper mine production, estimated in 1997 at
30%, is exported from its country of origin to be smelted and refined in
another country. Table 2.5 shows the estimated concentrate imports
and exports during 1997.
It will be seen that Chile is by far the largest exporter of con-
centrates while Japan, with virtually no mine production of its own,
relies heavily on concentrate imports to supply its large smelting and
refinery capacity. Canada and the United States both import and export
concentrates, largely for geographical reasons. Among the Eastern

Table 2.5 Copper concentrate exports and imports, 1997

(’000s tonnes contained copper)
Exports Imports
Chile 1107 Japan 1159

Indonesia 429 Spain 222
Canada 498 Germany 189
Australia 245 Philippines 173
United States 128 S Korea 155
Portugal 113 Canada 139
Papua New Guinea 95 Brazil 132
Others 191 Finland 116
Eastern countries (net) 229
Others/in transit 292
Total 2806 Total 2806
Source: WMS, ICSG.
Table 2.6 Blister and anode exports and imports, 1997

(’000s tonnes)
Exports Imports
Chile 158 United States 157

Mexico 121 S Korea 109
Peru 57 Belgium 101
Finland 39 Germany 63
Spain 34 Canada 27
Others 89 Others/in transit 41
Total 498 Total 498
Source: WMS.
countries, China is becoming a major importer of concentrates owing to

increasing smelting capacity which its domestic mine production can-
not satisfy. In addition to concentrates and secondary material (which
will be considered in section 2.4) blister and anode are also exported
from countries with insufficient refining capacity; as with concentrates,
this is a trade which has been encouraged by overseas demand.
Estimated exports and imports of blister and anode copper in 1997 are
shown in Table 2.6.
Consumption of refined copper in 1997 totalled 11.25 million
tonnes, as detailed in Table 2.7.
Both the United States and Japan are major producers of refined
copper as well as consumers, although both have to rely on imports to a

Copper
Table 2.7 Refined copper consumption, 1997

(’000s tonnes)
United States 2790

Japan 1441
Germany 1040
S. Korea 618
Taiwan 588
France 558
Italy 521
United Kingdom 409
Others 3281
Total 11246
Source: WMS.
significant degree. The greatest concentration of demand is in western

Europe, which is heavily dependent on imports; total consumption was
3.56 million tonnes compared with production of 2.03 million tonnes.
The rate of growth in consumption varies considerably, but the slowest
tends to be in countries with mature industrialised economies, particu-
larly western Europe, while those with the fastest rates of growth in the
Western World are to be found among the Asian countries apart from
Japan. It is estimated that globally the consumption of copper is growing
at an average of around 3% per year although inevitably the annual rate
varies considerably, reflecting fluctuations in industrial output.
For some years past the Western World’s copper consumption has
tended to exceed its production, sometimes by a substantial margin; in
1997 it was 0.3 million tonnes. The market has been balanced by sub-
stantial net imports from Eastern countries. China, with fast-growing
demand and limited domestic production, is a regular importer and
sometimes a substantial one, probably receiving net over 0.2 million
tonnes in 1996. However, the West receives very large tonnages from the
CIS (well over 0.5 million tonnes in 1997) where consumption has fallen
further than production since the break-up of the USSR, and nearly 0.2
million tonnes from Poland, although here domestic consumption is
increasing, and in the longer term exports are expected to decline.
2.3.2 Market pricing
With the exception of the United States, where the Comex quota-
tion is used, copper in all its forms is usually bought and sold on the basis

of the daily quotations of the London Metal Exchange (LME) settlement

price, quoted in US $ per metric ton. Some countries have their own
domestic prices, but these are also based on the LME level, and outside
the United States imports and exports are almost invariably priced on
the LME quotations, averaged over an agreed period. Much exported
metal is sold on annual contracts providing for a premium over the LME
price to be paid; this will vary from year to year but, as an example, in
1997 the usual premium was $30/tonne. Blister is sold at a discount
to the LME to cover the cost of refining, and concentrates are sold at a
larger discount since they have to be both smelted and refined by the
receiver.
Throughout its history, copper and its alloys have been remelted
and the metal reused. Some major instances of this, such as the recovery
of the massive remains of the Colossus of Rhodes (possibly the biggest
single copper alloy object ever to be recycled) and the stripping of the
bronze roof from the Pantheon in Rome in the seventh century , have
gone down in history. No material lends itself to recycling better than
copper. Only a tiny amount – mainly oxide powder for fungicides – is
manufactured into a form which cannot be recovered after use; very
little metal is lost in the remelting or resmelting and refining process and
there is no loss of quality; and the energy required to produce secondary
copper is much less than that required to produce the same amount
from a mine.
Scrap has always played an important part in the copper industry,

although its level of usage varies with market circumstances and also the
type and provenance of the secondary material.
Scrap can be divided into two categories based on the process by
which it will be reconverted into raw materials for manufactured copper
products. Very pure scrap, usually from off-cuts, spoilt products, etc.,
arising from the actual manufacturing process, requires no further
refining and so can be used directly in the semi-fabricating process; it
can therefore be fed into the melting furnace of, for example, a continu-

Copper
Table 2.8 Copper raw materials, 1997 (tonnes)
Mine production 9440200

Loss in smelting process 236000
Net exports of ores, concentrates, and 165700
blister to Eastern countries
Production from secondary materials 1601000
Refinery output 10793300
Implied change in stocks of ores, 153800
concentrates and blister
ous casting rod mill, along with cathode. Less pure scrap, on the other
hand, needs to be treated in a smelter (or by a hydrometallurgical
process) and then electrolytically refined. Scrap may also consist of
copper ashes and residues, and copper alloys, of which brass is the most
common. Less pure scrap which goes through a refinery contributes to
the ‘refined’ production described in sections 2.2 and 2.3 above. Table
2.8 provides, as an example, an estimate of the raw materials making up
the 1997 Western World refined copper production.
In that year, scrap accounted for nearly 15% of Western World
refined copper production, although the level of scrap for refining fluc-
tuates, for reasons explained in 2.4.2 below. The importance of sec-
ondary refined production varies considerably from country to country
(as does the usage of direct scrap). Western world scrap usage is shown
in Table 2.9.
It will be seen that the distribution of refined production from
scrap, i.e. secondary refined production, is very different from the
distribution of primary production. Although individual countries’
circumstances vary widely, as a general rule the highest level of
secondary production will be found in those countries where there is
a high generation of old scrap, resulting from a high consumption of
refined copper over a long period, and where primary production falls
well short of demand for refined metal. Most of the scrap that is refined
comes from old scrap which represents the recycling of copper in manu-
factured articles which were often made decades previously. It is no
surprise, therefore, that the bulk of such scrap is generated in countries
which have been fully industrialised for a long time. The obvious exam-
ple is Western Europe, with over half total Western World secondary
refined production. The distribution of production will also be affected
by countries such as Belgium and Germany which have substantial

Table 2.9 Western World scrap usage, 1997 (’000s tonnes)

Refined production Scrap as % of total Direct-use scrap
from scrap refined production
Austria 72 100 20
Belgium 183 49 32
France 30 84 57
Germany 378 56 302
Italy 80 93 413
Scandinavia 38 14 57
Spain 63 22 30
United Kingdom 51 85 69
Ex-Yugoslavia 17 15 36
Other Europe — — 41
Total Europe 912 47 1057
Japan 121 9 639
Other Asia 26 4 360
Total Asia 147 8 999
Canada 99 18 39
United States 380 16 1059
Brazil — — 66
Mexico 15 5 117
Other Americas 20 1 —
Total Americas 514 9 1281
South Africa — — 24
Other Africa 4 1 9
Total Africa 4 1 33
Australia 24 9 22
Total Oceania 24 9 22
Western World
total 1601 15 3392
China 379
Russia 65
Other Eastern countries 55
Total 499
World 2100
Source: ICSG, WMS.
capacity for treating scrap, and which draw in material from other
countries.
The distribution of consumption of direct-use scrap is in some
respects similar to that of refined production from scrap, but there
are differences, since direct-use scrap reflects current consumption of

Copper
copper by manufacturers, which generate new scrap, rather than past

consumption. Much of this is material which, having been discarded, is
either remelted and reused in the same plant, or returned to the supplier
for remelting.
On the available figures (which are by no means wholly reliable),
scrap in all forms used in the Western World in 1997 totalled 4.91 million
tonnes and represented one-third of total copper consumption (refined
consumption plus use of direct-melt scrap) of 14.54 million tonnes.
Statistics for scrap in former Eastern bloc countries are highly uncer-
tain, but the International Copper Study Group (ICSG) shows scrap as
ranging between 30% and 38% of global consumption between
1965 and 1995, fluctuating according to availability and the level of
consumption.
As mentioned above, copper scrap can be categorised according to

its method of recovery, i.e. whether it requires treating in a smelter and
refinery, or whether it can simply be remelted in the semi-fabricating
plant. It is also divided between ‘new scrap’, which consists of pieces of
waste metal generated in the semi-fabricating and manufacturing
processes, and ‘old scrap’, which is recovered from manufactured arti-
cles that have come to the end of their useful life. While new scrap is like-
ly to be recycled within at most a matter of months, old scrap will not be
recycled until the product of which it forms a part becomes redundant.
This will vary considerably; copper in automobiles is unlikely to be
recovered in much less than ten years, and quite possibly more; house-
hold appliances have a similar life span, although the cables which feed
them may last for 30 years or more and the plumbing even longer.
Copper in roofing and other architectural applications can last for
centuries.
The availability of new scrap is largely a function of the level of
semi-fabricating and manufacturing activity; the greater the activity, the
more new scrap will be generated, although this may be modified by
improved technology restricting the amount of scrap generated by the
processes. Since new scrap is generally much easier and cheaper to
recover than old scrap, its generation is much less likely to be affected by
the copper price.
Old scrap, on the other hand, is ultimately more affected by the

copper price than by any other single factor (although the price of scrap
is a function not only of the copper price level itself but also the level of
discount below the copper price). It has to be recovered from a great
variety of products – wires and cables in appliances, buildings, automo-
biles, machinery, or buried in the ground or, like plumbing tubes, fitted
into buildings – and often in very small quantities. In spite of some
technological advances, copper scrap recovery and collection is still
labour intensive and low prices will reduce the rate of scrap recovery.
Accordingly, owners of scrap may choose to hold onto it during periods
of low prices and wait for the market to recover. Also, scrap for refining
must compete with blister as feed (and in some cases with concentrates
also), and if one is in oversupply, the price of the other raw material will
suffer, while demand for scrap will decline if the differential between its
price and that of refined metal gets too small.
In the longer term, changes in the forms in which copper is used are
likely to affect the cost of recovery of old scrap and therefore its usage.
The downsizing, wherever possible, of copper products (such as tubes
with thinner walls and wire of smaller gauge) which has been a feature of
the past 20 years or more, is likely to have some adverse effect on costs,
as is the dissipation of much copper in minute quantities in electrical
appliances such as computers and screens. Increasingly strict environ-
mental regulations are also having an effect on recovery costs. Finally,
during the past 30 years the cost of primary copper production, with
which scrap for refining must ultimately compete, has declined
markedly in real terms owing to technological advances, more econom-
ical operations and increasing low-cost electro-won production, while
there is no evidence of a comparable decline in secondary recovery
costs. There are indications that in the West the rate of increase of sec-
ondary refined production is lagging behind that of primary production,
and this could be indicative of future problems.
The marked (and perhaps increasing) sensitivity of scrap supply
to the copper price can act as a valuable moderating influence on
the fluctuations of the copper market. As the price falls, supplies of
old scrap shrink, and with lower secondary production, total refined
copper production is also restricted. For example, in 1998, when the
LME copper price fell 27%, although primary production rose by 4.7%,
secondary production fell by 13.4%, restricting the increase in total
refined production to 1.9% (according to the ICSG). In addition, low
metal prices tend to reduce supplies of direct-use scrap to fabricators

Copper
who are then forced to use additional cathode instead, thus bolstering
refined consumption.
Scrap recycling starts at a relatively early stage in the process, the

first, ‘home scrap’, being damaged anode or cathode returned from
the electrolytic refinery to the anode furnace for recasting into anode.
Likewise, in the semi-fabricating stage, off-cuts or spoilt products are
returned as scrap from wire, tube and brass mills and foundries to the
relevant casting plants. Scrap from the manufacturing stage (new
scrap), such as discarded lengths of wire and cable, is collected by scrap
dealers. This scrap may require preparation: for example, wire must be
separated from its insulation. Unalloyed copper scrap, if pure enough
for direct use, will be sent to a casting plant to be remelted and cast into
wire rod or some other shape, while the rest will be sent to either a fire-
refining plant, an anode furnace, a secondary leaching plant or a smelt-
ing furnace, according to its level of purity. Alloyed scrap, if pure, may be
sent direct for remelting in a brass mill or foundry, or for fire refining in
an ingot-casting plant, or to a smelter.
Old scrap recovered from manufactured products follows similar
routes, except that, being much more widely distributed, its collection is
more complicated, and it may pass through the hands of more than one
dealer before it is recycled.
In most countries environmental regulations restrict the methods
by which scrap can be prepared, and some practices, such as burning
electric wire to separate the insulation from the metal, may not be
allowed. The regulations resulting from the Basel Convention (see Part
Four, Chapter 1) also seriously restrict the transport of some grades of
scrap between certain countries, classifying them as waste rather than
recyclable material. In general, while legislation tends to act as a dis-
couragement to the recycling of copper products, profit is likely to be
the only incentive.
Although statistics for imports and exports of copper and copper

alloy scrap are far from complete, Table 2.10 provides estimates for 1996.
As can be seen from Table 2.10, China is the biggest net importer of

Table 2.10 World copper and copper alloy scrap, 1996 (’000s tonnes)
Imports Exports Net imports/(exports)
Austria 91 23 68
Belgium 200 96 104
France 88 133 (45)
Germany 571 342 229
Italy 260 58 202
Netherlands 101 106 (5)
Scandinavia 81 101 (20)
Spain 68 44 8
United Kingdom 58 132 (74)
Other Europe 29 85 (56)
Total Western Europe 1547 1120 427
Canada 174 126 48
United States 212 380 (168)
Mexico 3 41 (38)
Other Americas 3 20 (17)
Total Americas 392 567 (175)
South Africa 5 12 5
Other Africa — 17 (17)
Total Africa 5 29 (12)
India 145 — 145
Japan 194 80 144
South Korea 120 28 92
Other Asia 109 246 (137)
Total Asia 568 354 214
Australia 4 33 (29)
Other Oceania 2 2 1
Total Oceania 6 35 (29)
Total Western countries 2518 2093 425
China 797 12 785
Russia — 350 (350)
Other CIS — 24 (24)
Other Eastern countries 27 79 (52)
Total Eastern countries 842 465 359
TOTAL WORLD 3342 2558 784
Source: ICSG.
copper scrap; inadequate supplies of domestic copper and plentiful

treatment capacity are the reasons. Recently tighter environmental
requirements have contributed to the reduction of China’s net scrap
imports to 710000 tonnes. Germany and Italy are the next biggest net
importers, supplies coming not only from other European countries but
also from the CIS countries, which have become major exporters since
the break-up of the USSR. The largest single net exporter in 1996 was the
United States and, in spite of its own substantial consumption of scrap,

Copper
large exports were made to China. Otherwise scrap is usually drawn

from developing regions to the more industrialised ones.
The price of copper-based scrap and residues varies according

to its purity, cleanliness, contents, how it has been prepared and how
costly it will be to process. There are a number of widely used specifica-
tions of copper scrap, the most basic being ‘No. 1’ scrap, which may be
used directly in place of refined copper, and ‘No. 2’ scrap, which requires
processing. These grades are subdivided, and in the internationally
recognised Institute of Scrap Recycling Industries Inc. (ISRI) specifica-
tions code names such as ‘Berry’, ‘Birch’ and ‘Barley’ are used. The
detailed scrap specifications may be obtained from the ISRI at 1325 G
Street NW, Washington DC, DC 20005, USA.
The basis on which scrap is usually sold is the domestic copper
price of the relevant country with a discount determined by grade
and market conditions. In the United States this is ultimately based on
Comex; in most other countries and for international trade it is, directly
or indirectly, the London Metal Exchange. For example, in the United
States, the average Metals Week quotation for No. 1 ‘Bare Bright’ scrap
during 1998 was 74.6 c//lb, and for No. 2 scrap was 61.4 c//lb compared
with a Metals Week US Producer Refined price of 77.2 c//lb. The discount
of scrap below the copper price will fluctuate according to supply and
demand: the differential between the Producer Refined and No. 2 scrap
prices during the last 10 years has fluctuated from about 15 c//lb to over
30 c//lb. The more impure or difficult to treat the material is, the greater
will be the discount below the refined copper price. There is no univer-
sally used standard form of contract for scrap sales, but certain provi-
sions will be found in most, if not all contracts.
Appendix 2.1
Description of material: high grade scrap will conform to an ISRI

specification.
Price basis: a specified discount above or below one of the
published prices, e.g. LME, Comex, Metal Bulletin quotation,
etc.
Delivery basis: Normally in warehouse, FOB or CIF.
Delivery dates:

Price fixing : the valuation may be based on the specified

quotation averaged over a period, e.g. the month of shipment,
or on a predetermined date.
Procedure in event of a dispute: usually LME or Comex arbitration
services are used.
Governing law :
Penalties: if material is not up to specification.
Procedure for determining assays is sometimes included.

3 Lead
Vincent Rich

3.1.3 Lead batteries
Battery weight
Battery lifetimes

3.3.1 Industry structure
3.3.2 Market institutions and operation

3.4.1 The relative importance of secondary production
The scrap collection chain
Battery collection and recycling schemes
3.4.4 International trade in scrap
Notes
References

and end-uses
When freshly cast, lead has a shiny silver lustre, but on exposure to
air rapidly acquires a dull, dark grey appearance due to the film of lead
carbonate that forms on the surface. It possesses a number of unique
properties that distinguish it from other common metals and which
make it useful in a broad range of applications. Lead has a relatively low
melting point (327°C), high density, low electrical conductivity and is
the most corrosion-resistant of all the major metals. In addition, it is soft
and malleable (in its pure, unalloyed state), and can be readily formed
into almost any shape. Lead can be rolled to most thicknesses and
extruded as pipe, rod or wire, while a low melting point means that it is
also easily cast. It can be alloyed with antimony, arsenic or tin, which
raises dramatically its strength or hardness. When added to steel, alu-
minium and copper alloys (in quantities up to 0.3%) lead improves their
machinability.
While the softness of lead provides certain advantages, such as ease
of use and formability, its lack of strength (and tendency to deform,
creep and fracture under stress) means that it is rarely used in engineer-
ing applications in pure metallic form. However, this problem can be
overcome by alloying lead with other materials or through the use of
composite materials.
Lead is an extremely reactive metal, which provides effective
and long-lasting corrosion resistance in the face of most environmental
elements. In air, metallic lead reacts first with oxygen, and then carbon
dioxide, to form a strong and cohesive lead carbonate film; this film
then protects the lead from further corrosion. Lead is very resistant to
attack from sulphuric and phosphoric acids because both similarly form
a protective film which adheres closely to the metal and is itself insolu-
ble, preventing further corrosion. Metallic lead is insoluble in pure
water, unless air is present. The combination of dissolved oxygen and
carbonic acid cause the formation of lead hydroxide, which is fairly solu-
ble, but only with soft water or rain water. Hard water contains calcium
or magnesium salts which form a protective film on the surface of the
lead.
Despite a number of unique and valuable properties, lead is also a

highly toxic metal which can be severely damaging to human health.

The incidence and symptoms of lead poisoning are well known and
stretch back to at least the time of the Roman Empire. More recently,
heightened concern over the well-being of workers in the lead industry,
and about the possible impact of lead in its various forms on the health
of the population in general, has given rise to a growing body of govern-
ment legislation which is now being more systematically implemented.
Measures extend to controls on the introduction of new lead-using
products, reductions in (or elimination of) the lead content of existing
products and restrictions on the movement of lead raw materials (scrap
and residues) destined for recycling.
The smelting and fabrication of lead dates back some 8000 years,
to before the time of the Egyptians, but it was the Romans who discov-
ered and identified most of its useful properties. Lead ore would have
been relatively simple for ancient man to smelt, requiring significantly
lower temperatures than other metallic ores, and a straightforward
extraction process. Lead’s corrosion resistance, malleability and imper-
viousness were recognised by the Romans, and they used this knowl-
edge to manufacture sheet, piping and storage vessels that have
survived to this day.
The emergence of lead as an important industrial metal dates back
to the latter part of the nineteenth century. Increasing urbanisation in
Europe and North America, and the expansion of the chemical industry,
brought with them growing requirements for lead piping systems and
fittings. However, the invention of the lead storage battery in the 1850s,
and its commercial introduction in the 1880s and 1890s (first in telegra-
phy and later in trolley cars and locomotives), was of much greater sig-
nificance for the subsequent development of the industry. From about
1900, lead-acid batteries began to be used for automobile lighting and
ignition, while in 1911, battery-started automobiles appeared for the
first time.
Lead is now used in a wide range of industrial sectors (transport,
construction and electrical goods, in particular), as Table 3.1 indicates. It
is used as unalloyed metal in applications such as cable sheathing, pipes
and sheet. After melting and casting, lead metal can be rolled, extruded,
shaped, pressed or stamped, depending on product requirements. Lead

Lead
Table 3.1 Lead use by major consuming industries
Transportation Grid alloys and oxide pastes in SLI batteries and some
traction batteries
Solders in vehicle manufacture
Lead alkyl ‘anti-knock’ compounds
Construction Building materials (sheet, pipes, tubes for roofs, surfaces
and waste piping)
Composites for sound insulation and radiation shielding
Lead chemicals for paints/stabilisers
Solders
Capital goods Grid alloys and oxide pastes in industrial batteries
(for standby power)
Industrial equipment (pipes and linings) for chemical
manufacture and processing
Lead coatings (e.g. terne metal)
Bearings and solders for machinery
Electrical/communications Grid alloys and oxide pastes in stationary batteries (e.g.
for peak load supply)
Cable sheathing (for power/telephone cables)
Printing types
Others Lead chemicals for glass, enamels, pigments, dyes and
plastic stabilisers
Ammunition and weights
Source: Rich (1994).
is also used in alloyed form, most importantly for battery grids, and in
smaller (declining) uses like solders (most commonly alloyed with tin),
bearings and type metal. It is also used in various chemical compounds,
including lead oxide paste in batteries, anti-knock additives in petrol,
and as pigments and stabilisers.
Over the past 40 years, the demand for lead has been affected
by a number of, often conflicting, influences. While, on the one hand,
general economic expansion and the growth of vehicle ownership have
stimulated lead usage, competition from other materials, tighter
environmental controls on some products and pressure for economisa-
tion in use have served to limit the rise in demand.
The main consequence has been that lead consumption has
become increasingly concentrated in a single application, the lead-acid
battery, even as overall lead demand growth has slowed. The underlying
growth in the automotive battery market has been more rapid (and is
likely to remain so), because of the importance of replacement battery
demand from the growing worldwide vehicle population.1 As Figure 3.1
illustrates, lead use in batteries rose from under 30% of total consump-

3500
3000
2500
’000s tonnes
2000
1500
1000
500
0
1960 1970 1980 1990 1998
Batteries Cable sheathing Pipe/sheet/shot Chemicals Alloys Gas additives Others
3.1 Trends in lead use, 1960–98. Source: ILZSG.
tion in 1960 to almost 70% in the late 1990s. However, wide regional dif-
ferences are apparent, with the proportion varying from as low as 40% or
so in the UK (and some other European countries), to over 80% in the
USA. In some newly-industrialising countries (e.g. Brazil and South
Korea) as much as 75% of lead consumption may now be accounted
for by the battery sector.
The vast majority of lead-acid storage batteries (some 90% or
more) are used in SLI (starting-lighting-ignition) applications for
cars and commercial vehicles, and for a range of other vehicles (motor
cycles, tractors, and various leisure and utility uses). The remainder are
used as stationary batteries, which provide standby power for computer
systems, for essential services at hospitals and airports, and in load-
levelling (where the batteries are used by electricity companies to supply
peak power demand). There are, at present, no technically or commer-
cially feasible alternatives to the automotive SLI battery, and none
seems likely to be developed in the near future. The production of indus-
trial batteries is also expanding rapidly, prompted by the growing
requirements of the telecommunications industry, and expanding
demand for non-interruptible power supplies.

Lead
Lead use in cable sheathing, pipe and sheet has, in contrast,

dropped dramatically. In 1960, these end-uses were more important
than batteries in Japan and some European countries; since then, sub-
stitution by other materials (mainly aluminium and plastics) and
economisation have undermined consumption. Pigments and chemi-
cal compounds are now a rather more important end-use in a number of
countries, despite the erosion of markets for tetraethyl lead (as an anti-
knock additive) and lead-based paints. Principal uses of lead by country
are shown in Table 3.2.
In common with other basic materials which constitute a small
part (in value terms) of the finished product of which they are a con-
stituent, the short-term price elasticity of demand for lead is low. It will
be higher in the medium to long term because of the possibilities of
economisation and substitution, as we have seen, but here technical
and environmental factors are also important. Various uses of lead
(petrol additives and household paint, for instance) have suffered
because of their perceived health risks, and this will remain an impor-
tant influence. Nevertheless, the use of lead compounds and pigments
in television and computer screens, where they reduce electrical con-
ductivity, will continue to expand. There are also several potential new
(non-battery) markets for the metal, particularly in nuclear waste dis-
posal or environmental protection. However, the problem is that all of
these uses are essentially dissipative, and so will not add to future scrap
supplies.
Table 3.2 Principal uses of lead by country, 1998 (% of total consumption)

France1 Germany Italy1 UK USA Japan2 Total ‘6’
Batteries 72 57 64 38 86 73 74
Cable sheathing 5 1 3 2 0 1 1
Pipe/sheet/shot 9 17 13 37 5 4 10
Chemicals 7 22 14 6 4 10 8
Alloys 2 2 1 4 4 3 3
Gasoline additives 0 0 0 8 0 0 1
Others 5 2 4 3 1 9 3
Total 100 100 100 100 100 100 100
Notes: 1. Based on 1997 data.

2. Includes primary and secondary metal only; others include remelt.
Source: ILZSG.

3.1.3 Lead batteries
Given the overwhelming importance of the SLI battery for lead

consumption, and for lead recycling, some further consideration of
the structure and dynamics of this end-use seems essential. The
technology of the lead-acid battery has remained basically unchanged
for over 80 years. Despite wide variations in size, weight and complexity,
all lead-acid batteries utilise the same basic technology, operate on sim-
ilar principles, and use lead in both chemical and metallic lead (alloy)
forms, in roughly equal amounts. Nevertheless, changes in SLI battery
design over the last 25 years have had a major impact on the quantity
and types of materials used in manufacture. The first major imperative
was to reduce battery maintenance requirements; the second was to
reduce battery weight and volume, while at the same time improving
battery performance and lifetimes. SLI battery technology is shown in
Table 3.3.
Battery weight
Technical changes have resulted in a large reduction in lead
content per battery over the past 25 years. In the USA, for example,
average lead usage per SLI battery fell by over 40% between the mid-
1970s and late 1990s (from about 12–13kg/battery to 7kg/battery at pre-
sent). Although most SLI battery production is now based around these
lighter weight units, increasing car electrical needs may soon prompt a
reversal of this trend (with a possible move to 24 volt or even 36 volt
units).
The lead content of SLI batteries represents, on average, about
60–70% of total battery weight, while accounting for only about 10% of
their volume. Battery lead content increases with vehicle size; while
small commercial vehicles (vans and trucks) use batteries containing
about 10–15kg of lead, the largest trucks could typically require over
70kg of lead in batteries.2
Battery lifetimes
Battery longevity, and therefore battery failure, is related both to
product technology and operating conditions (most importantly, tem-
perature extremes, driving patterns, road conditions, maintenance
practices and variations in vehicle electrical demands).
Modifications to battery design have extended operating lifetimes

Lead
Table 3.3 SLI battery technology

Component Materials
Grids or plates Lead-antimony alloy (now with 1% or less

Connectors (linking grids of same antimony)1
polarity) Lead-tin-calcium alloys (0.5–1.2% tin and
Production from strips of lead sheet or by 0.04–0.08% calcium) (increasingly)
continuous casting Lead-strontium alloy (rarely)
Move to thinner grids (now <1mm)
Separators (for insulation) Plastic
Increasingly low resistance, envelope
structure
Lead oxide paste (high density coating Litharge (PbO) and fine lead particles
on grids for electrochemical properties) (addition of small amounts of expanders
Essentially the same for both positive and and inhibitors)
negative plates
Electrolyte Dilute sulphuric acid (H2SO4) (Battery
operation based on reversible reaction
between electrolyte and active material,
the lead and lead oxide, in the plates)
Battery case Moulded polypropylene (or other plastic)
case2
Notes: 1. Use of antimony in grids was associated with battery water loss, shorter life
and battery failure. Thus from the 1940s to 1970s the average antimony content of grids
fell from 12% to 5%. New ‘low maintenance’ batteries in the 1970s used 2–3% antimony.
Introduction of lead-calcium grids allowed development of ‘maintenance-free’ batteries
and commercial introduction in the USA from the mid-1970s.
2. Replaced heavier hard rubber cases in common use until the 1970s.
Source: Various (see Rich, 1994).
in recent years. Average SLI battery life in western Europe and Japan is
now 4–5 years, but is much shorter than this in the USA, and with
marked regional variation (ranging from just over 2 years in some
Southern states to over 3 years in the North East). Battery life in most
developing and emerging economies is currently relatively poor (typi-
cally, 1–2 years), but this is likely to lengthen with the worldwide diffu-
sion of new battery technologies and production techniques.
Lead is one of the scarcer non-ferrous metals in the earth’s crust;

copper, for instance, is 5–6 times more abundant, and zinc 7–8 times.

Purchased
drosses and Scrap batteries
Old scrap residues
Slag and
new scrap Battery breaker
Battery grids H2SO4

Plastic
Rubber/PVC
Battery paste
Smelting furnaces
Slag (blast, rotary, Smelting reagents
reverberatory, (Limesone, coke,
Bergsoe, Isasmelt) scrap iron, natural
gas, rubber/PVC)
Lead bullion
(90–99% purity)
Refining kettles
Refining reagents (Harris Process) Dross
Hydrometallurgical/
Electrowinning processes*
Speciality alloys Soft lead (99.99%+) Antimonial lead
Oxide plant
Calcium-lead alloys
Market Market Market Market Market

By-product sales
(plastic, PVC,
rubber and sodium
sulphate after acid
neutralisation)
or waste dump
3.2 Simplified secondary lead production flowchart

* See Rich (1994) for an explanation of these, including a comparison with
pyrometallurgical processes.
The majority of lead ores occur in unoxidised primary sulphides (gale-

na), but cerussite (lead carbonate) and anglesite (lead sulphate) are also
significant lead ore minerals. Lead ores are often accompanied by zinc
ores, and normally both metals will be recovered.3
There are some similarities in processing technologies employed
by primary and secondary producers,4 but also a number of significant
differences. Secondary lead production (see Fig. 3.2), like primary pro-

Lead
Table 3.4 Energy requirements for primary and

secondary production (GJ/ton of product)
Primary 39
Hard lead by blast furnace process 11.22
Soft lead by reverberatory/blast furnace process 9.36
Hard lead by reverberatory/blast furnace process 11.17
Cast lead by pot melting process 0.71
Source: Henstock (1996), p. 172.
cessing, has traditionally involved (in most cases) three main stages. The
first stage is scrap or residue preparation, which includes battery break-
ing and dismantling. The next stage involves smelting, using a blast fur-
nace or reverberatory furnace (of stationary or rotary design), or both, to
produce lead bullion. Newer technologies (the Bergsoe, Isasmelt, QSL or
Kivcet processes) achieve the first two stages in one step.
The third stage is pyrometallurgical refining; as in the primary sec-
tor, the process involves a series of refining kettles to which reagents are
selectively added to upgrade the lead bullion (which varies between 90%
and 99% purity) to soft (pure) lead or alloys. Producers are now begin-
ning to turn to hydrometallurgical or electrowinning techniques5 (in
place of conventional smelting and refining) to achieve metal separa-
tion directly.
The differences between secondary and primary production6 are
greatest at the feed preparation and smelting stages, although the refin-
ing process can also vary widely in complexity. Recycled raw materials
are, on average, of a higher lead content, secondary feed preparation is
more complicated, and the volume and types of by-products are very
different. Finally, the scale of operation is relatively much smaller at sec-
ondary plants. These technical factors have important implications for
the economics of lead recycling, and for the organisation and operation
of the lead market, as we discuss later.
The costs imposed by increasingly stringent environmental con-
trols have been offset by technical innovation and higher efficiency at
secondary lead plants, keeping processing costs for batteries fairly con-
stant over the past 15 years.7 Lead recycling offers the potential for major
energy savings when compared to primary extraction of lead metal from
ore (see Table 3.4), providing cost savings for producers and wider envi-
ronmental benefits for society through a reduction in (fossil) fuel usage
and pollution.

The production side of the lead industry is oligopolistic in struc-

ture, with half a dozen large transnational firms having a combined
share of about a half of Western capacity.8 However, there is in addition
a competitive fringe of about 10–15 medium-sized companies (each
accounting for 1–2% of industry capacity). The degree of concentration
in mining is comparable to that of zinc, but lower than that of copper;
however, concentration is much less pronounced in lead refining
because of the relatively larger role of secondary producers in the indus-
try. The past few years have seen a further consolidation in lead produc-
tion, including the scrap collection ‘chain’ itself, and the degree of
integration between smelters/refineries and their raw material sup-
pliers (mines and/or scrap generators) has increased markedly. Most
refineries have a range of products in addition to refined metal, includ-
ing various lead alloys, chemicals, composite materials and semi-fabri-
cated (rolled, cast or extruded) goods. Although some refiners may also
make intermediate or end-use products (like cable sheathing, propri-
etary chemicals, lead roofing sheet), most are not integrated forward as
far as this. However, a growing number of battery companies have them-
selves integrated backwards into secondary lead production.
The secondary lead sector (including both scrap collection and
smelting/refining stages) is characterised by a larger number of partici-
pating companies, which are both of a smaller average size and more
geographically dispersed than those in the primary sector. The plants
they operate tend to service local markets and are located closer to end-
users, which also constitute the main source of scrap. However, this
requires some qualification. Firstly, a number of secondary plants in
Europe and the USA are comparable in size to those in the primary
sector. Secondly, the traditional distinction between primary and sec-
ondary plants (based on feed intake) is now much less clear cut; indeed,
several important companies operate in both sectors. According to the
ILZSG, a little over two-thirds of Western secondary refining capacity is
in plants with an annual capacity of less than 15000t/y. Environmental
pressures have tended to push companies to raise plant capacities
because of the need to hold down unit costs and rationalise production.
However, the spread of secondary production to emerging economies

Lead
(in Asia and Latin America, in particular), itself reflecting changing con-
sumption patterns, tends to limit the economic scale of operation (to
30–40000t/y capacity, at most), because these plants must increasingly
rely on locally generated battery scrap for feed.
Although systematic information on market shares of individual
companies producing lead intermediate or finished products is not as
easily available, it is clear that the extent of concentration among lead-
consuming companies is less marked than that of producers. However,
several of these consuming sectors have recently undergone major
organisational changes which have invariably left them more con-
centrated than before. In structural terms a distinction may need to be
drawn between the battery manufacturing companies that, in the
industrialised countries at least, tend to be large commercial concerns
and those firms involved in other product markets that tend to be much
smaller. Indeed, the rising share of lead consumption taken by the bat-
tery sector, together with recent organisational changes in this sector,
suggests that the overall market power of lead buyers has grown, and will
grow further.
The process of consolidation in the automotive battery industry,
which has been underway since the early 1970s (first in the USA and
Japan, and later in Europe) has intensified recently, driven both by
increasing global competition and environmental pressures. Large
transnational companies have replaced many of the small and medium-
sized enterprises that traditionally characterised the industry; these
changes in market structure have occurred, as we have seen, at a time of
rapid market growth. Technological innovation, in both manufacturing
processes and battery design, and increased price competition have
forced battery manufacturers to increase scale to cut costs. This has
been achieved partly by internal expansion and partly through
takeovers or mergers. On a worldwide basis, the degree of market con-
centration exhibited by battery manufacturers is now much greater than
that in lead refining (compared to a rough equivalence in the early
1990s), suggesting a growth in market power of the former.
While, in 1988, the four largest battery companies (Exide, Yuasa,
Matsushita and Varta) accounted for 25% of the total worldwide market,
by 1998 their combined share exceeded 60% (with Exide alone account-
ing for 25%). The extent of market dominance is even greater at the
regional level; in Europe for instance, two companies (Exide and Varta)
held two-thirds of the market in 1998 (up from about 45% in 1991).

Many battery manufacturers have also directly acquired secondary

lead production facilities. This process of backward vertical integration
has gone furthest in the USA, where up to three-quarters of secondary
lead production is now controlled directly or indirectly by the battery
industry. In Europe, the equivalent figure is about 15–20%.
3.3.2 Market institutions and operation
The London Metal Exchange (LME) constitutes the only terminal

market for lead, and therefore provides a reference price for sales of
refined lead, and a pricing basis for lead raw materials (both scrap and
concentrates) throughout most of the Western World. Futures trading is
possible up to 15 months forward, and traded options are available.
There are LME warehouses for lead throughout Europe, in Singapore
and in the USA (Baltimore, Detroit, Long Beach, Los Angeles, New
Orleans and St Louis). Other important trading centres include New
York, Toronto, Melbourne and Tokyo.
The LME contract specifies refined pig lead of minimum 99.97%
purity for good delivery, but this has become increasingly out-of-line
with industry requirements. Battery makers, in particular, require metal
of 99.985% purity or better for the manufacture of high-quality alloy
grids. In practice, therefore, producer list prices (and therefore physical
market prices) will build in a premium to reflect this quality differential,
as well as other standard elements. A North American producer price
(NAPP, as published by Metals Week) is quoted for (99.97% purity) com-
mon grade lead, with premiums for better quality metal. The NAPP
(which is normally at a substantial premium to the LME) is based on the
average list prices of a number of US and Canadian producers, weighted
by their production levels for the previous year. The two markets often
move in parallel, largely because of the influence of US secondary pro-
ducers, many of whom base their quotations on the LME price.
There is a well-recognised link between refined lead prices and the
stock/consumption ratio, but the relationship is an unpredictable one,
partly because industry stock holdings are by no means fully reported.
Stocks held directly by users (as opposed to smelters/refineries, mer-
chants or those in LME warehouses) are relatively more important for
lead than for other major metals mainly because battery manufacturers’
stocks and work in progress consist largely of metal.
The short-term responsiveness (or elasticity) of refined lead supply

Lead
to price changes has traditionally been very high, largely because of the
relative importance of secondary production in total output; with the
secondary refineries acting as ‘swing producers’ during price rallies or
downturns. The effect has been to reduce the volatility of lead prices, at
least when compared to other non-ferrous metals. However, the grow-
ing importance of secondary production, an increasing amount of
which is now taking place at (nominally) primary plants, and the
‘enforced recycling’ that results from legislative pressures (rather than
in response to market signals) suggests that the traditional price sensi-
tivity of secondary output may no longer hold.
The recycling of lead is relatively well developed when compared to

most other non-ferrous metals. This is partly due to the efficiency of
scrap collection systems in many countries and the impact of environ-
mental legislation, but it is also because of lead’s particular technical
characteristics and demand patterns. Secondary production now
accounts for about 60% of total Western refined output, up from 50–55%
in the early 1990s (and compared to 30–35% in the early 1970s). In addi-
tion, large quantities of lead scrap (about 400000t/y in recent years, see
Appendix Table 3.1) are remelted directly to produce secondary ingots of
metal or alloy (the particular features of this sector are dealt with sepa-
rately, later). Although from the consumer’s viewpoint it makes very
little difference whether the metal they receive has been rerefined or
simply remelted, most industry statistics (covering production, con-
sumption, trade and stocks) exclude remelted material, as does the data
presented here, unless otherwise indicated. Figure 3.3 shows the growth
of Western World secondary production.
The rising share of batteries in total consumption and intensifying
environmental pressures will ensure that the secondary sector increases
further in importance. Most scrap recovery is still carried out at special-
ist secondary lead plants, a few of which can use a small volume of lead
concentrates. However, more importantly, new smelting techniques are
allowing primary smelters (particularly custom plants in Europe and
Japan) to take more of their feed in the form of secondary materials, and

6000
5000
4000
’000s tons
3000
2000
1000
0
1960 1965 1970 1972 1975 1978 1981 1984 1987 1990 1993 1996 1998
Mine Secondary Total refined Total refined

production production production consumption
3.3 The growth of Western World secondary lead production, 1960–98.

Source: ILZSG.
indeed encouraging them to switch entirely to scrap feed. While in 1980,

primary smelters accounted for an estimated 3% of Western ‘secondary’
production, by the late 1990s this share had risen to 10% or more and is
likely to rise further. There is both a commercial and an environmental
logic to this strategy. On the one hand, it recognises the inherent
economic advantages of using locally-generated scrap, compared to
imported concentrates. The use of scrap feed (like battery paste, for
instance) also helps to reduce potential SO2 emissions and slag disposal
problems. The future emergence of integrated (or combined) primary
and secondary plants has also been proposed; this would achieve
cost savings through greater economies of scale and benefit from close
synergies between the two parts of the operation. These developments
will mean, however, that the statistical distinction between the ‘primary’
and ‘secondary’ sectors, already rather imprecise, will become even
more unclear. The ratio of mine to secondary lead raw materials is
shown in Fig. 3.4.
On a regional basis, secondary production (perhaps not surpris-
ingly) is concentrated in those countries that are also the largest
consumers of lead, namely the developed, industrialised economies.
However, Asia has seen the most rapid growth in secondary capacity and

Lead
2.50
Ratio of mine to secondary production
2.00
1.50
1.00
0.50
0.00
1960 1965 1970 1972 1975 1978 1981 1984 1987 1990 1993 1996 1998
3.4 Lead raw materials. Source: ILZSG.
Table 3.5 Pattern of Western World secondary lead pro-

duction (% of total refined production)
1992 1995 1998
North America 68 66 72
Europe 50 58 59
Japan 34 49 52
Other Asia 58 59 62
Africa 28 38 53
Latin America 34 37 43
Oceania 9 13 18
Overall average 50 56 60
Source: EIU; ILZSG.
output in recent years. The secondary sector has generally grown in

importance, but there remains a wide variation in the share of lead recy-
cling (relative to refined production and consumption) between par-
ticular countries or regions (as Table 3.5). Compared with the Western
World, the former communist bloc countries have low lead recycling
rates. The ILZSG estimates that secondary lead accounts for under 25%,
on average, of total refined supply in these countries.9 Several have size-
able, if neglected, primary lead industries, but the main factors are low
levels of car ownership (and scrap battery availability) combined with
poorly developed recycling systems.

For lead, as with all materials, we can distinguish between two

broad categories of scrap, ‘new’ scrap and ‘old’ scrap.10 The main com-
ponents of these two scrap streams, together with their normal process-
ing options, are presented in Table 3.6. Within the new scrap category a
further distinction should be made between ‘home scrap’ (which is
remelted and recycled in the plant from which it arises) and ‘prompt’
scrap. Prompt scrap includes material that arises from metal fabricators
and is returned (directly or through dealers) to metal recycling plants, as
well as defective or reject articles returned immediately after purchase
Table 3.6 Forms of lead scrap
New scrap1
Battery manufacturing
– Defective grids Remelted in-house
– Off-cuts from wrought grids
Battery manufacturing Reprocessed by smelter
– Defective pasted grids
– Oxide sludge
– Faulty batteries
Sheet and pipe off-cuts Remelted in-house
Cable sheathing off-cuts Remelted in-house
Solder and other alloys
– Metallic off-cuts Remelted in-house
– Drosses Reprocessed by smelter
Anti-knock compounds – sludge Reprocessed by smelter
Old scrap2
Whole batteries Cases removed with polypropylene recycled
(and sodium sulphate solution from
desulphurised acid), lead materials smelted
and refined
Sheet and pipe Melted and refined (sometimes recast into low-
grade products, e.g. sinkers)
Cable sheathing Tar and organics burnt off with lead melted and
refined
Wheel weights Melted and refined, or recast
Type metal Melted and refined (used as a source of tin and
antimony)
Sinkers Usually lost
Notes: 1. Produced during manufacturing; uncontaminated; metallics usually remelted

in-house; oxides and compounds smelted in secondary lead plant.
2. Consumers’ discards; mixed and contaminated with a range of alloys and other mate-
rials; often require smelting and refining.
Source: Various; modified by author.

Lead
by consumers (to fabricators or smelters) to be reworked. The statistical

treatment of home and prompt scrap flows is very different: while the
former is not usually covered by official metal statistics the latter, which
often represents a market transaction, generally is.
The supply of old lead scrap has traditionally been highly price-
elastic (responding directly and often dramatically to refined metal
price movements), but is arguably now rather less so as suggested above.
The underlying availability of old scrap supply depends upon the type
of products in which the metal has been used, product lifetimes, past
levels of metal consumption and the efficiency of recycling systems.
Comprehensive and accurate data on the relative amounts of old and
new scrap lead is available for very few countries. However, relatively
slowly growing demand for refined lead, greater manufacturing effi-
ciency and the increased emphasis on mandatory battery recycling
schemes will have increased the quantity of old lead scrap relative to
new in most industrialised countries in recent years. In the USA, for
instance, the share of old scrap in total lead scrap supplies rose from 85%
to 93% between 1970 and 1993.11
Batteries, cable sheathing and lead sheet and pipe make the major
contribution as recycled old lead scrap. Other lead uses (like chemicals,
pigments and even ammunition) tend to be dissipative, or like solders
have a small per-unit metal usage. For lead, as we have seen, there has
been a shift of consumption towards the battery sector, and to the auto-
motive (SLI) battery in particular; this is a product with a relatively short
and predictable lifetime (of 2–5 years, on average), and for which scrap
collection and recovery systems are generally well developed. Battery
scrap (mainly from automobiles) now accounts for upwards of 70–80%
of old scrap arisings in many countries, and more than 90% in the USA.
Lead product life cycles and recoveries are shown in Table 3.7.
A significant outlet for lead scrap is for remelting to produce
secondary ingots of metal or alloy. However, while in most industrialised
countries the larger secondary producers tend to be both melters
and smelters, the specialist remelting companies are invariably
small-scale operations. The quality of available data on this sector is in
consequence relatively imprecise, but the ILZSG provides aggregate sta-
tistics on Western World remelt and alloy production. (See Appendix
Table 3.1.)
In general, secondary ingots retain more of the intrinsic value in
the scrap, and cost less to produce, then resmelted and refined metal. In

Table 3.7 Lead product life cycles and recoveries

Product Life cycle (years) Product recovery % Recoverable lead1 %
Batteries:
Automobile (SLI)
Traction
Stationary
Spree:
2–5
5–6
20 } 90+ 95–97
Sheet Up to 100 80–90 98–100

Pipe 50 70–80 98–100
Cable sheathing 40 50 98–100
Alloys:
Solder Varies with product 20–30 98–100
Bearings in which used
Type metal Indefinite – constantly 5% of annual 98–100
recirculating consumption2
Notes: 1. Specific recovery depends on quality of metal received.

2. Returned as skimmings and residues from melting operations.
Source: ILZSG.
consequence, the higher the quality of the scrap, the more likely it is to
be simply remelted and recast to produce secondary ingots. However,
the lead remelters will often be in competition with secondary smelters
for scrap supplies, and efficient operation of these plants requires highly
developed scrap buying and blending skills. To produce pure (soft) lead,
the remelters must process large quantities of high-purity lead scrap,
normally in the form of sheet and pipe. A feed intake of battery scrap, on
the other hand, will produce battery lead alloys and residues from the
battery oxides. Usually, however, battery scrap must be treated in a blast
furnace in order for contained oxides and sulphates to be effectively
removed.
The scrap collection chain

Until recently the lead scrap collection process (as with most met-
als) was organised around a competitive, merchant-based system, with
relatively little government intervention or direct regulation of activ-
ities. Collection, preliminary sorting and storage was based on small-
scale operations, dealing with a range of scrap metals.
The lead scrap collection chain is comparatively well developed
and covers a wide range of scrap types, but is becoming increasingly

Lead
dominated by the recycling of large volumes of used car batteries.

Industrial batteries, because of their higher unit value and limited
numbers, are also easy to recycle, normally directly to battery makers.
The automotive battery recycling chain can involve a large number of
participants and stages (customer, service station, battery retailers,
scrap merchants, battery breakers) before the failed battery reaches
the secondary smelter and is transformed into metal and various
by-products.
However, in response to competitive and environmental pressures
there has been a tendency in recent years for the scrap collection system
to become much more streamlined and truncated, with fewer ‘stages’,
and declining numbers of small operators. The changes happened
earliest in the USA, where the battery recycling system was at its most
developed. From the late 1970s onwards, secondary lead smelters
began to install in-plant battery breakers (which displaced existing
independent operators), battery distributors initiated return arrange-
ments for used batteries with customers/service stations (thereby elimi-
nating some merchant activity) and battery manufacturers began
themselves to integrate backwards into smelting/refining. Low metal
prices and increasingly stringent (and targeted) environmental legisla-
tion, which has raised the administrative, handling and transport
costs of scrap collection, accelerated these trends. During the early
1980s legitimate concerns were expressed over a possible breakdown
of the entire scrap collection system, and the uncontrolled disposal of
spent batteries. According to the Battery Council International (BCI), US
battery recycling rates (recycled batteries/total scrapped batteries in
any year) fell to below 70% in 1983, but by 1990 had risen again to almost
98%,12 a period over which US producer-refined lead prices more than
doubled.
An increasing proportion of batteries are now being sold through
mass retailers and specialist battery outlets, and these companies are
being encouraged to participate in the recycling process itself. As a con-
sequence, battery recycling is now becoming a much more coherent and
well organised industry. The larger secondary smelters often enter into
long-term contracts with battery manufacturers, through which they
supply lead and lead alloys and receive (in turn) used batteries. These
may be processed on a tolling basis (with metal returned to the battery
maker). Many battery manufacturers have agreed collection arrange-
ments with the battery retailers themselves.

Battery collection and recycling schemes

Once scrap batteries enter the collection chain they will eventually
be recycled. The need to encourage consumers to return failed batteries,
and to channel them more effectively into the recycling/recovery sys-
tem, has been widely recognised in legislation passed in a number of
countries since the early 1990s.13 This legislation has tried to address two
issues. First, the need to balance an improvement in environmental
safety throughout the recycling chain (including the operation of sec-
ondary smelters/refineries), with the need to maintain adequate scrap
supplies and processing capacity. Second, to provide adequate incen-
tives to encourage the entry of scrap into the collection chain, at the
point at which it is generated.
Most of the schemes that have been introduced use a mix of central
directives and market-based initiatives. Subsidisation of the battery
recycling process by government can occur directly (through funding
deposit schemes, tax incentives or financing the provision of recycling
infrastructure, like collection points) or indirectly (through landfill
levies, for instance). Underlying all these approaches is the recognition
that an efficient recycling system has intrinsic value in eliminating, or at
least reducing, the environmental costs of improper battery waste
disposal.
3.4.4 International trade in scrap
International trade in lead scrap and wastes (see Table 3.8) has
been a significant supply-side factor in recent years, involving the move-
ment of large tonnages of material in response to (often temporary) local
supply shortfalls or surpluses. International movements of lead scrap
and wastes have traditionally shown wide year-to-year variation, and
have been a much more volatile element than other trade flows. This
largely reflects the tendency for scrap and waste to be sold in smaller
parcels, often on a spot basis rather than under long-term contract.
However, tighter international environmental regulation (embod-
ied in the Basel Convention, and other initiatives14) has increasingly
restricted the operation of the market and has resulted in reduced cross-
border movements of lead scrap since the early 1990s, particularly
between OECD and non-OECD countries. However, the evidence from
Table 3.7 is far from conclusive.
A 1997 study by the ILZSG concluded (on the basis of detailed trade

Lead
Table 3.8 International trade in lead scrap, waste and residues, 1990–95 (tons)
Lead waste and scrap1 Lead ash and residues2
OECD– Intra OECD– Intra
non-OECD non-OECD non-OECD non-OECD
1990 80211 52299

1991 79567 35012
1992 49537 71362
1993 34796 35574 4922 2615
1994 12060 58582 3663 1793
1995 64686 41070 9199 2410
Notes: 1. Lead waste and scrap (including spent lead-acid batteries); HS-
780200/SITC28824.
2. Ash and residues containing mainly lead; HS-262020/SITC-28810.
Source: UNCTAD; ILZSG.
data for 1995 and reports from member countries) that the impact of the
Basel Convention (and subsequent legislation) on the lead industry
would be as follows:
1 Based on statistical evidence, the short-term impact in both OECD

and non-OECD countries was unlikely to be significant.
2 In the longer term the ‘ban’ will result in a decrease in the amount
of secondary raw materials being recycled in the non-OECD, and
an increase in the OECD.
3 There is a danger that higher quantities of secondary raw
materials may be sent to landfills, dumped or not collected for
recycling in both groups of countries.
4 Non-OECD countries may be forced to develop (further) their
primary industries and/or increase their imports of refined metal
or products which contain refined metal.
5 For both OECD and non-OECD countries, the environmental
outcome of the ban may ultimately be in direct conflict with its
desired goals.
The key problem is that all this legislation has tended to define old
lead batteries and other forms of lead scrap as ‘waste’, with associated
stricter controls on its collection, storage, transport and disposal. There
have been continuing attempts to differentiate between those materials
(like battery scrap) which have an intrinsic value and are destined for
recovery, and those that have no further value or use. The ultimate inten-

tion of this and other legislation, it appears, is that recycling should take
place as far as possible within national boundaries.
Lead scrap prices are determined, as in any market, by the actions

of buyers (scrap consumers, generally smelters) and sellers (merchants,
or increasingly, scrap generators themselves). While LME metal prices
(often a combination of cash and three-month) provide a reference
point, each market transaction is likely to be unique. The prevailing
‘price’ for any form of scrap is a function of a range of factors including its
metal content and quality, collection and processing margins and costs,
underlying market conditions, as well as the refined lead price itself.
Representative lead scrap prices are shown in Table 3.9.
Scrap prices (and scrap availability), as might be expected, are
closely related to refined (LME) lead prices, and indeed often follow a
similar cyclical trend, as Figure 3.5 shows. The relationship between
scrap prices and lead concentrate prices, as competing raw material
supplies for an increasing number of smelters, is more complicated. We
would normally expect the two price series to move in parallel, but there
may be instances where instead they move in opposite directions.
Traditionally, the supply of secondary raw materials (or scrap) has been
more price-sensitive (exhibiting a greater price elasticity of supply) than
that of concentrates.
Indicative lead scrap prices are published by a variety of trade pub-
lications. Metal Bulletin, for instance, provides these for both UK and
European markets, on a weekly basis. The prices quoted are intended to
be representative of business between the largest merchants and scrap
Table 3.9 Representative lead scrap prices, October 1999
European free market Representative price (8/10/99)

Soft lead scrap (‘Racks’) $270–278/tonne (54–56% of LME cash)
Drained batteries (‘Rains’) $97–103/tonne (19–21% of LME cash)
LME cash $498/tonne
US free market Delivered Midwest works

Whole used batteries 5.00–5.50c/lb ($110–121/tonne)
Secondary lead (producer range) 22.00–25.00c/lb ($485–550/tonne)
Source: Metal Bulletin (Monday 11 October).

Lead
180
160
140
(Index: Q1/1992=100)
120
LME Average Cash
100 Price Refined Metal
80 UK Price Whole
Batteries
60 US Price Whole
Batteries
40
UK Price Soft Lead
20
0
92 1
93 3
93 1
94 3
94 1
95 3
95 1
96 3
96 1
97 3
97 1
98 3
98 1
99 3
1
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
92
3.5 Lead: refined metal and scrap prices, 1992–99. Source: Metal Bulletin (UK
price); American Metal Market (US price); LME (refined lead prices); author’s
records.
consumers, and are based on a specific LME session. For the UK market,
Metal Bulletin provides quotations for the following types of lead scrap
(all on delivered consumer basis); soft scrap, battery plates and whole
batteries. Additionally, a reference price is quoted for lead ashes and
residues which is based on the LME price, net of a treatment (or process-
ing) charge. For the European market, prices are published for soft lead
scrap and drained batteries (on a cif Rotterdam basis). American Metal
Market and Metals Week provide regular price data for heavy soft lead,
mixed hard lead, undrained whole batteries, wheel weights, type metal
and cable lead. A similar range of lead scrap price information is pro-
vided for other national markets by locally-based publications.
Realised prices for lead scrap will also depend on local supply and
demand conditions. In North America, large transportation distances
can cause wide regional variations in scrap prices. Scrap battery prices
have traditionally been higher in the North East because the close prox-
imity of a number of secondary smelters has meant greater competition
for material, which was exacerbated by high export demand. Prices have
also been at a premium on the West Coast because of substantial scrap
exports to Mexico and South-East Asia. Growing restrictions on interna-
tional waste shipments will have tended to narrow these differentials.

In Europe, there are often variations in scrap prices across national

markets, but this is partially tempered by cross-border movements of
material.
   
1. The Society of Motor Manufacturers and Traders (SMMT) estimates that there were
697 million vehicles (511 million cars and 186 million commercial vehicles) in use,
worldwide, in 1997. The rate of growth from year to year depends on the number of
new vehicle sales or registrations, minus the number of vehicles scrapped (which is
very difficult to estimate accurately). SMMT figures suggest that the world vehicle
population has been growing at 3–4% annually, but with marked regional
variations. The most rapid growth has been in South-East Asia.
2. The lead-acid battery systems used to power prototype electric vehicles (like GM’s
Impact model) have been many times larger and heavier than SLI batteries,
weighing up to 400kg. However, the mass production of electric vehicles is still
some way off, and the technological choices seem now to have moved towards
‘hybrid’ vehicles (with battery and auxiliary power sources) and, in the longer term,
hydrogen fuel-cell-powered vehicles.
3. Over 70% of mined lead is produced at zinc main-product or multi-metal mines,
where it is increasingly considered a by-product of higher-value zinc or silver
output.
4. Secondary production is defined here as the re-refining of scrap, residues and
wastes.
5. See Rich (1994) for an explanation of these, including a comparison with
pyrometallurgical processes.
6. Primary production typically involves: (1) roasting and sintering of lead sulphide
concentrates, to produce lead oxide sinter and sulphur dioxide (SO2) gas; (2)
reduction of the lead oxide to bullion in a blast furnace; and (3) pyrometallurgical
or, less commonly, electrolytic refining of lead bullion to metal of >99.97% purity,
by extracting precious metals, other by-products and impurities.
7. Processing costs for scrap batteries in the USA were put at 15c/lb (or $330/ton) in
the early 1990s. Henstock 1996, p. 168.
8. Four firms (Quexco, Renco Group, Exide and Metaleurop) accounted for almost
40% of Western refined lead capacity in 1999, compared with a share of 25% held by
the four largest companies in 1990.
9. According to the ILZSG, this share varied from less than 15% in Kazakhstan and
about 25% in China to over 60% in Poland in the mid-1990s.
10. See Part 1 and Glossary for a definition and general discussion of terms.
11. Metallstatistik, 1983–93, quoted in Henstock (1996).
12. The recycling rate fell to about 70% in Japan, but declined more modestly in
Europe. The estimation of battery recycling rates is based on data series of variable
quality and is highly sensitive to assumptions on average battery weight.
13. Among the earliest were those in the USA, Sweden (Returbatt), Italy (Cobat) and
France (Protocole).
14. The Basel Convention on the ‘Control of Transboundary Movements of Hazardous
Wastes and their Disposal’, ratified in 1992, subsequent EU legislation and that
banning movement from OECD countries of ‘hazardous wastes’ destined for
recovery operations in non-OECD countries from 31 December 1997.

Lead

Battery Council International (BCI), http://www.batterycouncil.org/

Economist Intelligence Unit (EIU), World Commodity Profiles: industrial raw mate-
rials, 2000/2001, London, 2000.
Henstock, M E, The Recycling of Non-Ferrous Metals, ICME, Ottawa, 1996.
Hoffmann U, A Statistical Review of International Trade in Metal Scrap and
Residues Part II/Part III, UNCTAD/ICME, Ottawa, 1996.
ILZSG, Lead and Zinc Statistics (Monthly Bulletin), London, various issues.
ILZSG, Principal Uses of Lead and Zinc, 1960–1990, London, 1992.
ILZSG, Impact of Basel Convention and Basel ‘Ban’ on Lead and Zinc Industries,
Report of the Economic Committee, London, 1997.
Rich V, The International Lead Trade, Woodhead Publishing, Cambridge, 1994.
SMMT, World Automotive Statistics, London, 1999.

Appendixes
Appendix Table 3.1 Recovery of secondary lead in the Western World, 1995–98
1995 1996 1997 1998
Refined lead and lead alloys1

Europe 913 915 944 940
Austria 23 24 22 23
Belgium 30 31 27 33
France 168 163 159 158
Germany 164 150 198 192
Greece 4 5 6 6
Ireland 11 12 12 13
Italy 135 144 146 142
Macedonia 5 4 4 4
Netherlands 21 22 19 17
Portugal 8 6 6 6
Slovenia 14 13 15 14
Spain 82 91 88 90
Sweden 41 42 43 48
Switzerland 7 7 10 10
UK 200 201 189 184
Africa 54 53 64 69
Morocco 3 4 4 4
South Africa 32 32 43 50
Other 19 17 17 15
America 1253 1344 1405 1409
Argentina 26 28 29 30
Brazil 40 48 53 48
Canada 104 119 133 124
Mexico 67 66 80 87
USA 984 1046 1074 1083
Venezuela 23 25 25 25
Other 9 12 11 12
Asia 396 432 443 424
India 26 25 17 17
Indonesia 30 30 30 22
Japan 140 147 154 158
South Korea 51 52 61 47
Malaysia 33 37 36 29
Saudi Arabia 6 15 17 18
Taiwan 36 40 40 40
Thailand 11 13 15 19
Other 63 73 73 74
Oceania 32 30 31 34
Australia 26 24 25 28
New Zealand 6 6 6 6
Total 2648 2774 2887 2876
Total Westem World primary output 2116 1997 2029 2019

Lead
Appendix Table 3.1 Continued

1995 1996 1997 1998
Remelted lead and lead alloys2

France 16 16 16 16
Germany 44 44 44 44
Italy 4 4 4 4
UK 45 43 39 36
Other Europe 36 36 36 36
USA 136 136 136 136
Japan 40 40 40 40
Other countries 80 80 80 80
Total 401 399 395 392
Total secondary recovery 3049 3173 3282 3268
Notes: 1. Refined lead and lead alloys produced from secondary materials (scraps,
wastes and residues).
2. Recovery of secondary materials by remelting without undergoing further treatment
before reuse.
Source: ILZSG.

4 Iron and steel
James F King

Strength
High melting point
Ductility
Weight

4.2.1 Iron and steel production processes
Steelmaking pig iron
Foundry pig iron
Blast furnace technology
New ironmaking technology
Direct-reduced iron
4.2.2 Iron and steel recycling processes
Internal (home) scrap collection and processing
Old scrap

Part 1

Steel scrap
Pig iron
DRI
Semi-finished steel
Finished steel
Long-term trends
Future prices

and end-uses
Steel is an alloy of iron and carbon in which the carbon content,

lying within the range 0.04 to 1.00%, is critical to the performance quali-
ties of the steel. The product of the steel furnace is crude steel in molten
form. Crude steel can be classified as carbon steel, special steel or alloy
steel.
Carbon steel has a carbon content generally up to 1% and a man-
ganese content up to 0.8%. Within the classification of carbon steel mild
steel has a relatively low carbon content, below 0.2%, with manganese
content below 0.7% and maximum contents for silicon of 0.6%, phos-
phorus 0.05% and sulphur 0.05%. This type of steel offers high ductility
and moderate strength and is the type used in flat rolled steel sheet for
car and appliance bodies, general steel sheet, etc.
Carbon steels with a low carbon content (0.15–0.25%) and an
increased manganese content of up to 1.5% are suitable for high-
strength applications requiring weldability. This type of steel is used to
make steel structures (beams and sections), railway rails and flat rolled
steel for welded tubes.
Higher carbon content increases the strength of the steel, but
reduces its ductility and weldability. Steels with carbon content of
0.2–0.3% are used for concrete reinforcement. Steels with higher carbon
content, up to 1.0%, are used for engineering applications and are often
heat treated to obtain desired properties. Bars from these steels are
referred to as ‘merchant bar’, ‘special bar’ or ‘engineering steel’.
Medium carbon steels with a higher content of silicon (0.6 to 2.3%)
and manganese (0.5 to 1.2%) are used for springs and other engineering
purposes. They may also be described as special steels.
Alloy steel contains substantial quantities of other metals, such as
manganese, chromium or nickel, and combines strength with other
properties such as corrosion- or heat-resistance. Stainless steel, contain-
ing chromium and (in some alloys) nickel, is a form of alloy steel.
Steel is the most widely used industrial metal (with world con-
sumption at over 630 million tonnes in 1996) and is believed to be sec-
ond only to cement among all materials in tonnage of consumption on a
world-wide basis. Like all industrial materials, steel products are useful

because of a combination of characteristics. Steel in the form of finished

steel products (plate, sheet, sections, bars, etc, as described later) com-
petes with a wide range of alternative materials in various applications,
including rolled, cast and forged aluminium, forged titanium, nickel
superalloys, concrete, timber, asbestos sheet, glass and plastics such as
PVC and PET.
In any application steel is selected against competing materials on
the basis of a balance of cost and functional characteristics. The charac-
teristics include strength, high melting point, ductility, corrosion
resistance and weight.
Strength
Steel is by far the most important structural metal. For load-
bearing purposes in construction steel has essentially no competition
from other metals and the main competition in structures is between
steel sections and concrete which is reinforced with steel. Steel remains
the dominant material in engineering applications, for load bearing,
transmission of forces, etc. In applications where lighter loads are
involved, combined with other factors such as light weight or corrosion
resistance, steel comes into competition with aluminium, timber and
plastics (e.g. in windows or aircraft).
High melting point

The melting point of steel is over 1500°C. This is high in comparison
with structural metals such as aluminium (660°C) and makes steel more
suitable for very high temperature applications. The high melting point
also makes it difficult to use processes available to other metals for cast-
ing directly into finished products in the form of continuous-cast sheet
or rod. Technology for this type of product using steel is relatively new,
see Chapter 1, Table 1.2.
Ductility
Steel when heated to high temperatures becomes ductile, allowing
it to be worked with rolling mills using steel rolls, but the high tempera-
tures required to soften the metal do not permit steel to be easily
extruded into complex shapes, unlike aluminium. Steel is therefore
rolled to sheet or structural shapes, which have to be welded together or
formed to make more complex products. The rolling process also
imparts physical qualities to the steel, making it suitable (when com-

Iron and steel
bined with heat treatment through annealing) for a wide range of appli-
cations from the most flexible to the hardest and stiffest. Grades of
flat-rolled steel are suitable for pressing into complex shapes with a
smooth finish, as widely used in the domestic appliance and automotive
industries.
On contact with the atmosphere a coating of iron oxide (rust) is
formed and prolonged exposure to the air or to moisture will result in
damage to the steel surface and eventual degradation of the steel’s
strength. This does not occur in steels with a high content of chromium
or nickel (stainless steels). Steels other than stainless steel must
therefore be coated in almost all applications, either permanently by
galvanising, organic coating or tinplating, or by periodic painting.
Weight
Steel has a density of 7.9 grams per cubic centimetre, lower than
that of copper (8.9g/cc) but almost three times greater than that of alu-
minium (2.7g/cc). Iron and steel are therefore clearly at a disadvantage
where light weight in relation to strength is important. This has always
been a major factor in aircraft, but is now important also in road vehicles
which have been a major market for steel products.
Crude steel from the furnace is cast at the same site into semi-
finished steel (semis) in the form of ingots (large blocks) or by continu-
ous casting machines into slabs, blooms, billets or tube rounds. Steel
cast as large ingots must subsequently be reheated and rolled on one or
more primary rolling mills in order to produce slab, bloom or billet.
Continuous casting therefore avoids the process of primary rolling and
has, as a result, been widely introduced since the early 1970s. Some
special or alloy steels cannot obtain their required properties from
continuous casting and must be cast as ingots and primary rolled.
A conventional slab is a block of steel of rectangular cross-section,
typically over 200mm thick, over 1000mm wide and perhaps 4 metres
long. This is used as the feedstock for conventional hot rolling mills (hot
strip mills) producing flat-rolled steel. Since 1989 processes have been
in commercial operation for the production of thin slab, a block of steel

with rectangular cross-section produced by continuous casting but

with a thickness as low as 50mm. This is used as the feedstock for much
smaller hot rolling mills (compact strip process) than conventional hot
rolling mills.
A bloom is a block of steel of square or near-square cross-section,
typically around 200mm square and perhaps 6 metres long, normally
used for rolling into steel sections or for further rolling into billet.
Blooms of special shapes for rolling into sections are sometimes referred
to as beam blanks. Blooms are sometimes also rolled into narrow flat
products.
A billet is a block of steel of square or near-square cross-section,
typically under 200mm square and perhaps 10 metres long, for rolling
into steel bars and wire rods.
Tube rounds (blanks) are billets of circular cross-section for use in
the production of seamless tubes.
Steel semis are sometimes sold or shipped between plants for pro-
cessing, but are normally further processed at the same site to finished
steel products. These are the forms in which steel is shipped to con-
sumers for further use. Finished steel products are broadly divided into
flat products and long products.
Flat products comprise plate and sheet products. Plate is flat steel
generally over 3mm thickness, usually hot-rolled from reheated slab.
Plate can either be produced on special mills (known as plate mills,
reversing mills or quarto mills) as discrete plates (separate, flat plates) or
in the thinner gauges can be rolled on conventional hot rolling mills as a
continuous strip which is coiled and later decoiled and cut into lengths
(strip mill plate or coil plate).
Steel sheet is produced by hot rolling re-heated slabs into hot-
rolled coil. HR coil is hot-rolled sheet in coil under 3mm thickness for
sale as a finished product or for further rolling. About half of all HR
coil is further processed by cold rolling to produced cold-rolled sheet in
coil (CR coil ). HR coil or CR coil may also be further processed by gal-
vanising (to apply a coating of zinc or zinc alloy by hot-dip immersion in
a bath of liquid metal or by electrolytic processes) or by tinplating (treat-
ing by electrolytic processes to apply a coating of tin or chromium
oxide).
Long products comprise rails, sections, bars, wire rod and seamless
tubes. Rails are used as railway tracks. Sections (profiles) range from
large beams for construction to light sections for the engineering indus-

Iron and steel
try. Rails and heavy sections are rolled on special mills from reheated
blooms. Light sections are rolled from reheated billets on mills often
used also for bars. Bars comprise steel bars for concrete reinforcement
(rebar) and merchant bars, covering a wide range of bars for engineering
and other applications. Depending on their application bars may be
produced in straight lengths (e.g. much engineering bar and larger-
diameter bars) or may be wound into coils (e.g. much reinforcing bar).
Wire rod is small-diameter bar for use in the manufacture of wire by
drawing. Rod is rolled from billets, often on mills also used for bar. Some
concrete reinforcing steel is also made in the same diameters as wire rod,
but this is in principle classified as bar.
Seamless tube, made by piercing and rolling tube rounds in a
hot condition, is considered for statistical purposes as a finished steel
product.
Downstream products beyond the stage of finished steel include
welded tube, made by welding HR or CR strip (known as skelp) or plate,
and wire.
Steel is the most important material for the purposes of recycling,
but cast iron is also significant. Cast iron is produced in foundries by
melting scrap iron or pig iron from blast furnaces. It may be alloyed with
other materials and is then cast into shapes such as engine blocks for
vehicles, components for machinery, water pipes, etc. Cast iron is a
source of recycled material and the production of cast iron also provides
a demand for scrap iron and steel.
The demand for iron and steel has depended on the development
of applications to take advantage of the positive features and minimise
negative features of the product. So wide is the range of steel appli-
cations, however, that competition from other materials must, in total,
be considered a relatively minor aspect of the development of the
market.
Cast iron does not compete greatly with steel and the most sig-
nificant direct competition for steel (and for cast iron) from another
metal can be considered as aluminium. Even on an equivalent surface
area basis, recognising that aluminium is only one-third the weight of
steel for a piece of the same dimensions, the consumption of aluminium
would be the equivalent of 86 million tonnes, only 14% that of steel.
The loss of competitive position to other metals has therefore been
very minor in comparison to other factors. These include the loss of
markets for steel sections to reinforced concrete in some countries and

the growth of many countries where reinforced concrete is the normal

form of construction. But far more important for the development of the
steel industry have been general economic trends which include:
• the growth of the world-wide automotive industry (positive);

• general economic growth and the construction of infrastructure,
industry and commercial buildings in many countries, including
the developing regions of the world (positive);
• the decline in the importance of rail transport and railway
construction (negative);
• the shift in industrial economies away from manufacturing
towards service industries (negative);
• the emphasis in consumer goods on electronic and lightweight
products (negative);
• the emphasis in investment towards labour-saving,
computerisation, etc, and away from heavy investment in
infrastructure and basic industries (negative).
Further discussion of the particular iron and steel products

relevant to the scrap and recycling industries follows below.
Scrap and recycling are critical to the iron and steel industry and
their role can be appreciated only within the total structure of the
industry.
4.2.1 Iron and steel production processes
Current world production capacity for crude steel is estimated at

1052 million tpy (tonnes per year, all data referring to the end of 1997).
Crude steel is produced by three main processes:
1 The melting of steel scrap and/or direct-reduced iron or pig iron in

electric furnaces (world capacity 370 million tpy in 1075 plants).
2 The refining of molten iron to remove carbon in a basic oxygen
furnace (BOF process, world capacity 581 million tpy in 215
plants).
3 The refining of molten iron to remove carbon in an open-hearth

Iron and steel
furnace (Siemens-Martin process, world capacity 101 million tpy

in 89 plants).
The first of these processes requires a supply of scrap, pig iron or

direct-reduced iron. The other two processes require a supply of molten
pig iron, almost always from a blast furnace. The Siemens-Martin
process can also use a widely variable mixture of molten iron and scrap,
but the manpower and energy requirements of this process are great and
it is now obsolete in most Western countries, but still widely used in the
Eastern countries.
World direct-reduced iron (DRI) capacity is 48 million tpy in 68
plants, while pig iron capacity is 704 million tpy, of which 692 million tpy
are from blast furnaces in 341 plants and 7 million tpy are from electric
pig iron furnaces and other processes such as Corex ironmaking in 31
plants. Both DRI and pig iron are primary iron, i.e. produced from iron
ore by the removal of oxygen and waste materials. In the DRI process the
ore is reduced without melting using natural gas or steam coal as a
reductant. In the blast furnace and electric pig iron furnace metallurgi-
cal coke is used as the reductant, the coke being produced in coke ovens
by the partial combustion of coking coal. In the Corex and other new
ironmaking processes which produce molten iron steam coal is used as
the reductant.
Iron ore is a naturally occurring mineral ore, containing 25–70%
iron, and is usually mined by straightforward open pit methods. World
iron ore capacity is around 1.1 billion tpy. Iron is the most commonly
occurring metal in the earth’s crust and iron ore is found in many coun-
tries. In countries such as the USA, former USSR, India and China large-
scale production is for the domestic steel industry, often involving the
processing of relatively low-grade natural ores. In countries without
large-scale iron ore deposits, such as Japan and most countries of
Europe, iron ore is imported from several areas with high-grade ores,
including Brazil, Australia, Canada, Venezuela, parts of North and West
Africa, South Africa and Sweden.
In almost all cases the economics of the process determine that
blast furnaces are located at the same site as steelmaking. In the great
majority of cases the location of steel plants is determined by the avail-
ability of local markets for steel products. This means that iron ore, and
in some cases steel scrap, are transported from their points of origin over
long distances to steel plants, often by ocean going ships.

Each steelmaking process has a requirement for raw materials, in

the form of primary iron (pig iron or DRI) or steel scrap. In the case of
electric steel the main raw material is steel scrap, with direct-reduced
iron or pig iron being a substitute in some cases depending on local con-
ditions of scrap availability and prices. For the manufacture of BOF steel
the overwhelming requirement is for liquid pig iron produced in the
same plant, since the process functions by the thermal reactions caused
by removing the carbon from pig iron. In some countries, however,
substantial quantities of steel scrap are added to the BOF converter
using modifications of the process. For the manufacture of open
hearth/Siemens-Martin steel combinations of pig iron and scrap are
used.
The future requirements for feedstock will be affected by several
technical trends in the industry. Steel is made by various processes
which are designed to take raw materials and then refine them to the
point at which they have the appropriate combinations of iron, carbon
and other elements. Appendix Table 4.1 shows the typical specifications
of steelmaking pig iron, foundry pig iron, DR iron and steel. These are
relevant to the discussion of technology which follows.
Steelmaking pig iron

Pig iron is produced by the reduction of iron ore to molten iron in
the presence of a carbon reductant. This generally takes place in a blast
furnace using coke (or charcoal) as a reductant. Small quantities of pig
iron are produced from prereduced iron ores in electric furnaces. The
product in both cases is molten iron for use in nearby steel furnaces or
iron cast from the furnace into pigs of weights varying from 7 to perhaps
25 kilograms for shipment to other locations.
The great bulk of pig iron is used in BOF furnaces for the pro-
duction of steel. Where they still operate, pig iron is used in Siemens-
Martin (open hearth) furnaces. In some countries, pig iron is also used in
electric steelmaking furnaces. Pig iron offers the electric furnace pro-
ducer precisely known composition, as does DRI, and higher iron con-
tent than DRI. The main difficulty is the carbon content of pig iron, at
around 4%, which seriously limits the quantity of pig iron which can be
introduced into the furnace unless special procedures are in place. The
oxidising of the carbon raises the heat of the furnace, but the quantities
of carbon which remain in the steel are significant. Unless the steel-
maker is seeking a high-carbon steel product, or unless the known car-

Iron and steel
bon content of his scrap feed is compensatingly low, it is difficult to use

more than a small proportion of pig iron in the feed (perhaps up to 15%
maximum).
In practice pig iron is used as a substitute for scrap only where its
price is directly comparable or lower. This has limited its use to certain
locations where imported pig iron is available at low prices in relation to
scrap which must otherwise be brought in at significant transport cost.
Such low-priced pig iron has come into certain Far East markets,
particularly Japan and Korea at marginal prices which the local
integrated steelmakers would not consider economic in relation to their
costs of blast furnace operations.
Foundry pig iron

Pig iron for steel production is the bulk of requirements in
most countries, but in a few cases there is substantial consumption
of primary iron in iron foundries. For certain countries there is also
substantial import or export of pig iron. For a country such as Brazil,
for example, the export of foundry and steelmaking pig iron is a large
business.
In the major industrial countries the raw materials requirements of
the iron foundry industry can be met from scrap with the addition of
some quantities of primary iron. Such demand for primary iron is met
either by one or two local producers using blast furnaces dedicated to
this market or by imports, particularly from Brazil, China, Russia and
Ukraine.
The prospects for the foundry iron market are, we believe, for a
continued downward trend in production volumes, as the same long-
term trend to substitution of other materials against cast iron will con-
tinue in the automotive and other markets. Producers selling into the
industrial countries will therefore have to offer specialised foundry
iron products produced with proprietary inoculants and requiring a
dedicated small-scale production operation. Brazilian producers have
found in recent years that the increased costs which result from environ-
mental restrictions on the wood supply for their charcoal blast furnaces
have raised production costs, and the balance of supply of low-priced
steelmaking pig iron has shifted to China, Russia and Ukraine.
The largest volume of steel in the Western World is made by the
basic oxygen process in which molten pig iron is treated with oxygen to
oxidise the carbon and other impurities. Steelmaking pig iron (so-called

‘basic’ pig iron) is therefore the key input to the basic oxygen process and
steel plants using this process invariably have their own ironmaking
capacity.
The specifications for individual irons depend on the raw materials
and processes used at specific plants, but the overriding feature of the
specifications is the metallurgical necessity for a quantity of carbon in
the pig iron and the need to minimise certain other impurities in order
to permit the production of steel of given qualities. The blast furnace
operator is not able to have any significant control over carbon content
which is inherent in the process. Sulphur and silicon content can be con-
trolled in opposite directions by furnace temperature, coke rate and slag
composition. Phosphorus content cannot be controlled and depends
on raw materials. Manganese content can be modified by additions of
manganese units to raw materials.
Blast furnace technology

In 1997 world pig iron production was 544 million tonnes, of which
under 4 million tonnes was from processes other than blast furnaces.
The blast furnace (BF) therefore accounted for over 99% of total pig iron
production.
Blast furnaces operate by reducing iron ore by blowing hot air
through a charge of iron ore, metallurgical coke and a flux such as lime-
stone and/or dolomite. Other materials which may be used include steel
scrap, sand and pulverised/granulated coal, oil or natural gas through
fuel injection. In the process the carbon in the coke/coal reacts to pro-
duce carbon monoxide which in turn removes the oxygen from the iron
ore. The products of the furnace are: molten iron which is tapped from
the bottom; blast furnace gas which contains some hydrocarbons; and
molten blast furnace slag which contains the impurities in the coke and
iron ore. The molten iron is moved in liquid form to steel furnaces or cast
into pigs, the BF gas is generally used elsewhere in the plant as a source
of energy and the molten slag is allowed to solidify before being crushed
and either dumped or sold as a product for roadstone or cement.
Blast furnaces consume around 500kg of coke per tonne of molten
pig iron (hot metal) produced. Coke is produced by the partial combus-
tion of metallurgical (coking) coal in coke ovens. These are usually part
of steel plants. In general, producers in the Western countries have age-
ing coke ovens and are under pressure to reduce pollution from these. It
is therefore possible that in the longer term the pressure of coke supply

Iron and steel
could induce a major reduction in the quantities of iron which can be

produced by blast furnaces, with major implications for the require-
ments for iron ore and coking coal.
Operators of blast furnaces can overcome the problems of coke
supply by various means:
• They can rebuild the ovens, if environmental permits can be

obtained.
• They can try to produce iron with less coke.
• They can buy coke in the market.
Up to now the option of buying coke in the market has been used
by relatively few producers and there has been a general feeling in
the industry that the environmental difficulties of coke production
would reduce rather than increase the future supply of ‘merchant’ coke
of this kind. In the 1990s some US producers closed steelmaking but
retained coke capacity, and this has permitted other US steel producers
to buy coke rather than operate their own coke ovens. The supply of coke
from China has increased markedly and this has met some coke require-
ments in Europe, India and Latin America. There is also substantial coke
capacity in Eastern Europe which is available to supply third parties.
Japanese steel mills also regularly sell surplus coke on the international
market.
In addition, in certain countries new coke capacity could be devel-
oped to supply the merchant coke market. This could apply to coke pro-
duction in Australia or other countries with large deposits of coking coal
which is now exported. It may therefore be possible to develop substan-
tial trade in coke. Such a development will take the pressure off decisions
about coke supply for Western steel companies. In the medium term,
however, the same environmental pressures will develop in Eastern
Europe and eventually in China. These will set limits on the scale of coke
production. Also, steel companies in major industrial countries will not
wish to become heavily dependent on purchases of an essential raw
material such as coke from a limited number of potentially unstable
sources.
An alternative to buying coke is to install coal injection (commonly
referred to as pulverised coal injection – PCI) on existing and new blast
furnaces. In this process pulverised or granulated coal is injected into
the furnace as a substitute for other fuels (such as oil or gas) and coke. Up
to 150kg of coal per tonne of hot metal is being injected in blast furnaces,

reducing the consumption of coke by a similar amount. The coal used

in this process is not coking coal, but is a quality of steam coal which is
generally lower in price than coking coal.
Our analysis of costs and review of coal injection technology have
concluded that coal injection can offer several advantages to the blast
furnace operator:
• Additional production from a given furnace by permitting higher

operating temperatures and quicker throughput of iron.
• Additional production of iron from a given quantity of coke.
• Constant production of iron while reducing coke production for
environmental reasons.
• Lower operating costs.
From our information about the situation at individual plants, we

estimate that at the end of 1997 there were over 850 blast furnaces ca-
pable of operation in the world with a total capacity of 692 million tpy. Of
these about 140 can be considered large furnaces, with over 2000m3
internal volume. We also estimate that about 135 of the world’s furnaces
(and mainly these larger ones) have installed coal injection equipment,
accounting for 245 million tpy of BF capacity. The largest installed PCI
capacity is in Japan.
Production of iron using coal injection will continue to increase
rapidly, with several installations already planned. Progress is already
under way in Europe and is being followed by adoption in North
America and Brazil, as well as installation on virtually all new blast
furnaces which will be built in future years.
Decisions to invest in coal injection are determined by a combina-
tion of these factors specific to individual companies. They will be
strongly influenced by the situation in the supply of coke for each
company.
It therefore seems likely that steel companies with follow a mixed
policy of reducing their coke requirements by installing coal injection on
all their larger blast furnaces, modernising their own coke capacity
where they are permitted to do so, and purchasing some proportion of
their requirements on the merchant market when prices are low. Cases
where coal injection will not be installed are:
• producers with small blast furnaces where the capital cost of coal
injection equipment would probably not be justified;

Iron and steel
• companies which are financially weak and may not be able to

make any significant investments in their basic steelmaking
facilities;
• plants where coke capacity has been modernised and meets
current environmental restrictions and where coking coal can be
purchased without balance of payments problems.
The trade in coke and the installation of coal injection will permit
the steel industry of many countries to meet the forecast steel require-
ments without a major coke constraint. This means that the potential
limits on the production of pig iron caused by coke supply may be less
severe than expected, and will not force large-scale closure of blast
furnaces.
New ironmaking technology

Pig iron which is produced by processes other than blast furnaces
includes electric pig iron furnaces, pig iron produced as a by-product of
titanium and vanadium processing and new direct-smelting processes
such as Corex and HIsmelt.
These new processes offer the potential advantage of producing
iron without coke by the reduction of iron ore with non-coking coals.
There are savings in capital costs on the coke ovens and potentially sig-
nificant savings in operating costs, if the large quantity of off-gas (avail-
able from the Corex process) can be used. Corex uses lump ore or pellets
with non-coking coal. The first Corex process plant started production
in 1988 in South Africa. The scale of this unit was small, at 300000tpy, but
the next unit built (at Posco in South Korea) started up in 1995 with
capacity of 720000tpy. Large blast furnaces, by comparison, produce
around 4 million tpy. The latest proposals for construction of Corex units
combine them with DRI plants so that the off-gases from Corex can be
used in the DRI plant. This provides a particularly economical source of
iron where there is abundant coal but limited natural gas.
The HIsmelt process, developed by Hamersley Iron/CRA in
Australia uses iron ore fines and non-coking coal. This is still at the stage
of a demonstration commercial plant.
We expect significant growth in the use of these processes, with
individual operators finding them suitable to their particular circum-
stances of scale, coke supply, quality requirements, financial strength,
etc.

Direct-reduced iron
Direct-reduced iron (DRI) is used almost entirely as a substitute or
supplement for steel scrap in the manufacture of steel. Small quantities
are also used in iron foundries, as a minor iron additive (coolant) in oxy-
gen steelmaking or as an almost pure iron charge (an alternative to
scrap) in order to raise productivity in blast furnaces. DRI can compete
with scrap only if it has a high iron content and low levels of impurities.
This depends on a combination of lower cost and/or higher quality than
is available from steel scrap in the particular circumstances of individual
producers.
The great majority of electric steelmakers do not have their
own iron production and produce steel by melting steel scrap in
furnaces in which the heat to melt the steel is generated by passing
electric current through graphite electrodes. Whereas in the BOF
the quantity of carbon remaining in the steel can be closely controlled
by a precise knowledge of the pig iron which is produced and by
adjustment of the quantities of oxygen fed to the furnace, electric
steelmaking cannot easily vary the quantities of carbon which are con-
tained in the raw materials. As a result, electric steelmakers normally
produce either bulk products in which the fine control of steel quality
is not vital, such as concrete reinforcement steel, or special steels
which require low-volume batch processing where the metallurgical
properties can be monitored in the furnace or by treatment outside the
furnace.
Being produced from iron ores of known specifications, DRI can be
manufactured with relatively low levels of carbon and other undesirable
elements, and may therefore be of better quality than some steel scrap.
Because the iron is not fully reduced in the process and impurities are
not removed in slag, as in the blast furnace, DRI has a high level (3–5%) of
oxides (silica, alumina) which must be removed into slag in the steel fur-
nace. Also, not all of the iron content in DRI is fully reduced (perhaps
only 90% being ‘metallised’, the remainder still being combined with
oxygen). This remaining oxidised iron must therefore also be reduced
in the steel furnace. All this adds to cost for the steelmaker, mainly in
the form of additional electric power to achieve the same quantity of
production.
Unless there is a particular problem of scrap quality, such as affects
electric steelmakers seeking to produce low-carbon steels for use in flat-

Iron and steel
rolled products, for most electric steelmakers DRI is regarded as a direct

substitute for common grades of scrap, and would in practice have to
sell at a delivered price discount to scrap in order to compensate for
the steelmaker’s extra processing costs. DRI is therefore an attractive
material only where there is a particular scrap quality problem in rela-
tion to the types of steel being produced, or where the price of DRI is low
in relation to the price of scrap.
This latter condition occurs essentially in two types of market areas
– those where DRI can be produced cheaply from a combination of local
high-quality iron ore and local gas and/or coal; and those where steel
scrap is either not available or highly priced because of government
restrictions, etc. Thus we find that DRI has been strongly developed in
certain countries, such as: Venezuela, where both iron ore and gas are
available, while local scrap supplies are moderate; South Africa, where
iron ore and coal are available and imported scrap sources were poten-
tially restricted by trade embargoes; India, where iron ore and coal are
available and much scrap must be imported over high tariffs; and
Indonesia and Malaysia, where local gas (but not iron ore) is available
and scrap supply limited.
DRI has not been widely used outside those areas, although there
are a few DRI plants which operate on a merchant basis (Trinidad,
Venezuela, Malaysia), selling material in the USA, in parts of Europe
where scrap is short (Spain, Italy, Turkey) and in some countries in the
Far East. In 1997 and 1998 US steelmakers moved to secure supplies of
iron units from DRI production, installing capacity in the US Gulf where
natural gas prices became attractive. A fall in scrap prices in 2000 called
into question the economics of these new plants.
Much DRI will be consumed in steel plants integrated with the
DRI operation, in such areas as the Persian Gulf, India, Mexico and
Venezuela, but there is a growing trade in ‘merchant’ DRI. The basis for
this is a physical shortage of steel scrap in certain countries and, more
importantly, the need for pure iron units to dilute impurities in steel
scrap. This becomes important as the impurity levels which can be
tolerated in finished steel products are reduced, as occurs when electric
steelmakers produce steel for flat-rolled products.
DR iron is produced by the reduction of lumps or pellets of iron
ore without melting, using carbon monoxide from coal or natural gas
as a reductant. The product is in the form of lumps of solid sponge iron.

As these break down in transport and can also entrap moisture, leading
to the danger of explosion, DRI is in some cases further processed
(compressed) into the form of briquettes (HBI – hot briquetted iron) for
shipment.
Since there is no melting process which removes impurities into
a slag, the DRI process is limited in its ability to reduce impurities
which come in the iron ore. Hence iron ores for all DRI processes
need to have low impurities (particularly silica) and high iron content.
The conventional DRI processes (supplied by Midrex, USA and HYL,
Mexico) function only with lump ores or pellets which meet these
requirements.
DRI depends for its economics on low energy costs. In the Midrex
and HYL processes this is provided by natural gas in plants with modules
which were of 600–800000tpy but have now been expanded in the case
of the Midrex Megamod to over 1 million tpy. The world’s largest DRI
plant is at Ispat in Mexico, with around 4 million tpy of capacity from a
number of modules of different gas-based technology.
The alternative reductant for DRI production is non-coking coal,
used in Lurgi’s SL/RN and other rotary kiln processes. The scale of these
is much smaller, at around 150000tpy, and the quality of the product is
generally lower because of impurities entrained from the coal. This
material is consumed generally in small, local steelworks and is not
internationally traded.
Because of the abundant availability of fine iron ores, research has
been devoted to developing a DRI process which can use fines. The Fior
process developed in Venezuela in the 1970s uses fine ores, and variants
of this process, or new processes such as Lurgi’s Circored, were built in
the late 1990s.
An alternative process using fine ore employs iron carbide, a
powder material produced by the reaction of natural gas with fine iron
ore. This product will be fed by special handling equipment into the elec-
tric furnace and will offer the steelmaker known impurities and the
opportunity to save energy by burning the carbon content of the iron car-
bide. Iron carbide technology was developed by the Pact group in
Australia. Iron carbide is viewed as a direct alternative to DRI as a substi-
tute for steel scrap in the production of electric furnace steel for use in
flat-rolled products. The first commercial plant for this process was
opened by Nucor in Trinidad in 1994 with nominal capacity of 320000tpy.
By the end of 2000 this process had not reached stable operation.

Iron and steel
Table 4.1 Steel scrap production and consumption, 1997

(million tonnes, world)
At steelworks 100 350

At foundries 0 40
At steel processors 100 0
Total 200 390
4.2.2 Iron and steel recycling processes
Our information on steel capacity indicates that at the end of 1997

there were over 1200 plants producing crude steel. All of these consume
steel scrap in the process. Over 1000 plants use electric furnaces which
consume mainly steel scrap in the production of steel. Iron and steel
scrap is also consumed in foundries making iron and steel castings.
Although these are generally much smaller than steelmaking plants,
there are several thousand such plants around the world. Hence, there
are thousands of plants with the capacity to melt iron and steel in some
form, i.e. to recycle iron and steel.
Using information on the estimated consumption of steel scrap in
all countries, and an assessment of the balance of scrap sources, we esti-
mate that quantities of steel scrap which were produced and consumed
at various stages of the iron and steel industry in 1997 were as shown in
Table 4.1.
This indicates that steelmaking plants consume about 350 million
tonnes of scrap, but generate 100 million tonnes in their internal opera-
tions (internal or home scrap). Foundries consume about 40 million
tonnes. The processing of steel generates scrap (new external scrap) of
about 100 million tonnes. As a result, about 190 million tonnes of scrap
had to be collected from used items (old external scrap) in 1997.
The main processes which are involved in the recycling of steel
scrap within the various stages of the industry described above include
the following.
Internal (home) scrap collection and processing

Scrap is generated within plants at all stages of the steel industry.
Molten steel from furnaces is cast into semi-finished steel in the form of
ingots, slabs and billets. Ingot casting, followed by primary rolling, yields

significant quantities of scrap in the form of scale (oxidised surfaces

which have to be removed by ‘scarfing’), ends of slabs and billets which
are cut off, etc. Most steel in the Western countries is now continuously
cast into slabs and billets, omitting the stage of primary rolling and pro-
ducing a more uniform product with less wastage. Even continuously
cast slabs and billets must be scarfed, however, with some loss. There are
further significant scrap losses in the processes of rolling, with ends of
slabs and billets, trimmings from rolled products, off-specification or
misshapen material, etc. This scrap can easily be collected within the
plant and segregated by type of alloy.
Taking total world statistics, the ‘yield’ of crude steel into finished
steel (sheet, bars, etc) improved from about 80% in 1976 to over 87%
in 1997. The largest contributor to this was the spread of continuous
casting.
Since most steel rolling is carried out by companies which have
crude steelmaking capacity, virtually all of this type of scrap is recycled
within the steelworks and does not enter the scrap market.
This internal scrap is essentially material circulating within the
steel industry, which is generally not recorded in industry statistics and
is not recycling in the normal sense of the term. It is, however, a large
quantity of metal and its reprocessing is essential to the economics of
the industry.

External scrap which is available for recycling is of two types:
1 ‘New industrial scrap’ (new production or prompt scrap) being

scrap generated by the users of finished steel products, such as
scrap from the processing of sheet into car bodies, bars into tools,
sections into bridges or wire rod into nails. This is scrap of known
quality and commands a premium in the market because of this.
2 ‘Old scrap’ (or post-consumer scrap) recovered from steel
products which have completed their life in service, such as the
return of a used food can or the dismantling of a scrapped car.

Much new industrial scrap is similar in principle to internal scrap
from the rolling stage. It may be off-cuts of sheet and bars, damaged
products, etc, which are easily identifiable by type of alloy and are

Iron and steel
uncontaminated by processing. This type of scrap is regarded as pre-

mium quality material because of its known composition. Among this
type of material are ‘auto bundles’ from car manufacturers which are
among the most sought scrap products. Major generators of this type of
scrap may, as in the USA, hold auctions for the sale of this material to the
market, or may have longstanding arrangements with scrap merchants
or steel mills to purchase it.
Other forms of new industrial Rind are machine turnings, swarf
and other material from the milling, boring or cutting of metal. This
material may be of mixed alloy composition and will almost certainly be
contaminated with oil, other metals, paint, dirt, etc. This scrap would
normally be collected by merchants.
Old scrap
Old scrap is the kind which we generally associate with the scrap
metal trade – material collected from products which have finished their
useful lives. Old scrap iron and steel is recovered from several major
types of product and is accordingly processed by different types of
operation. As in the processing of internal scrap and new industrial
scrap, described above, the key factor is the segregation of clean scrap
into identifiable qualities and reasonable quantities. If this is possible
special processing arrangements can be made.
The major sources of old scrap are: scrap cars (end-of-life vehicles –
ELVs – in a new terminology entering the industry), scrap domestic
appliances (refrigerators, etc), demolished buildings, bridges, etc.
Various types of iron and steel are recovered and they can be processed
in various ways.
Steel sheet can be flattened, compressed and bundled to produce
bales or bundles (e.g. No. 1 and No. 2 bundles which are major items in
the US scrap trade). Heavy steel girders (sections) or bars can be cut into
short lengths (e.g. No. 1 heavy melting scrap, which is the principal scrap
indicator in the US market). Cast iron engine blocks can be segregated.
Car bodies and other scrap can also be fragmentised (shredded into
small pieces) in special equipment (fragmentisers or shredders). This
permits residues of other materials, such as plastics, to be separated by
flotation for disposal through incineration or landfill and yields a prod-
uct which is easily handled for international trade.
The range of iron and steel scrap products identified in the trade
includes:

from processors to steel plants

• old heavy steel
• fragmentised steel
• new steel bales
• heavy steel turnings
• heavy cast iron
• cast iron cylinder blocks
• light cast iron
from collectors to processors
• old light steel
• old light compressed steel
• new production steel
• new loose light steel cuttings
• cast iron borings
Merchants therefore require a range of equipment to process steel
scrap. For those offering a full range of services this will include:
• baler
• press
• fragmentiser/shredder
• guillotine shear
• magnetic handler
• cranes and loaders
• road vehicles
A major advantage of iron and steel is its magnetic properties. This
means that steel can be separated from general household waste more
cheaply and effectively than other metals by passing a powerful electro-
magnet over the waste, which attracts the scrap. Steel is recovered from
household waste, mainly in the form of steel food cans.
In principle all scrap within a steel plant will be recycled internally
and all new industrial scrap which can be segregated into economic
quantities will be separated by scrap merchants so that it can be sup-
plied to the steel industry as a premium product with low levels of impu-
rities (‘low residual scrap’). Whether in practice this type of segregation
is commercially attractive for the scrap merchant depends largely on
geography – the transport cost of moving the segregated scrap to a con-
sumer with a requirement for this grade of scrap who will pay a higher
price compared to a closer, non-specialist consumer who will pay a
lower price.

Iron and steel
In practice the consumers requiring low residual scrap are those

using electric furnaces to produce flat rolled products or bars and sec-
tions with special quality requirements. As noted earlier, the use of elec-
tric furnaces to produce higher quality steels depends on the quality of
feedstock which can be provided. If the quality of scrap deteriorates,
electric furnace operators need alternative sources of iron units which
do not contribute unwanted elements (‘tramp’ elements). To illustrate
this issue Table 4.2 compares some typical values for tramp elements
(the total of copper, chromium, nickel, molybdenum and tin) in various
types of feedstock with the limits which are acceptable for various
grades of steel product. Steel for reinforcement or other lower-grade
purposes can be produced from the lower grades of scrap because they
can tolerate tramp elements which exceed those of the products in the
table, ranging up to 0.7%. Merchant bar (products such as light sections
and bars for some engineering purposes) can be produced from a blend
of scrap which contains mainly the better quality No. 1 heavy melting
scrap (HMS). Special quality bar (bar with closely controlled properties
for engineering and automotive uses) and wire rod (for fasteners,
mechanical wire or tyre cord) require low levels of impurities which
need a careful blend of scrap or which may require some additions of
primary iron with No. 1 HMS.
In flat products sheet for the construction market requires a level of
impurities which can be achieved with a careful blend of high quality
scrap, but the higher qualities of sheet (deep-drawing quality material
with a smooth surface for exterior car bodies or tinplate) require very low
levels of impurities, which can be achieved only by at least a partial feed
with primary iron.
Table 4.2 Tramp elements in feedstocks and steel products (Cu + Cr + Ni + Mo + Sn,
percent by weight)
Feedstock Steel product
DRI 0.02 Auto body sheet 0.08

BF pig iron 0.03 Wire rod 0.18
Scrap: No. 1 bundles 0.13 SBQ bar 0.25
No. 1 HMS 0.36 Building sheet 0.30
shredded 0.40 Merchant bar 0.50
No. 2 bundles 0.61
No. 2 HMS 0.70
Source: Information published by Midrex Corporation.

There is a general view that the trends in the steel market towards
more coated sheet will mean that the scrap of the future will have higher
levels of impurities than the scrap which has been available up to now.
This means that in order to produce even the same products as at pre-
sent the electric steelmaker will need to buy higher grades of scrap, or
the scrap industry will have to engage in further processing and sorting
to ensure that scrap with low residuals is available. This will add to costs.
It may also mean that the residuals in the average quality of scrap will
make it impossible to produce the higher qualities of sheet product
without a greater input of primary iron. These are the considerations
behind the decisions of electric steelmakers to use DRI or other primary
iron units in electric furnaces.
Old scrap which cannot be technically or economically segregated,
together with new industrial scrap which is in inconvenient form (swarf,
turnings, etc.) are collected and processed by merchants and moved
to consumers with less demanding requirements. At the consuming
steelworks or foundry the incoming scrap is unloaded in the plant’s
scrap yard according to its quality, into which it will have been sorted
by the scrap supplier. Various grades of scrap are then loaded by
magnetic cranes or front-end loaders in predetermined propor-
tions into scrap baskets, which are transported by cranes or special
vehicles and emptied into the steel furnace to provide the feed for steel
melting.
As described above, recycled iron and steel is from various sources,

only part of which enter the market outside steel companies. Figure 4.1
shows world production of crude steel by process, with a long-term fore-
cast. This shows that electric steelmaking, a heavy user of steel scrap, has
made steady progress, while open-hearth (Siemens-Martin) steelmak-
ing, also a significant user of steel scrap, has declined sharply. Almost all
the remaining open-hearth capacity is now in Eastern Europe and China
and a further rapid decline in this process is expected in the next few
years.
Figure 4.2 shows the consumption of steel scrap and the produc-
tion of crude steel over the same period. Although electric steelmaking
has expanded substantially, the simultaneous closure of open-hearth

Iron and steel
1200
1000
million tonnes
800
Other
600 Oxygen
Electric
400
200
0
1976 1981 1986 1991 1996 2001 2006 2011 2016
Years
4.1 Crude steel: world production by process, 1976–2016.
1200
1000
million tonnes
800
Crude steel
600
Scrap
400
200
0
1976 1981 1986 1991 1996 2001 2006 2011 2016
Years
4.2 Crude steel: world production and scrap consumption.
steelmaking, the growth of oxygen steelmaking using pig iron and

improvements in performance to recover more usable steel in the
melting process has meant that total scrap consumption has increased
less than total crude steel production. Table 4.3 shows the totals for 1977,
1987 and 1997.
Appendix Table 4.2 shows the relative importance of internal scrap,
external new scrap and external old scrap in the total supply of scrap
over the period. Improved yields from continuous casting have reduced
the supply of internal scrap. General levels of activity in steel-using
industries determine the supply of new external scrap. The balance is

Table 4.3 Crude steel production and scrap consumption

(million tonnes, world)
1977 1987 1997
Crude steel production 675 737 798

Scrap consumption 350 385 389
Scrap per tonne steel (kg) 519 523 488
Table 4.4 Metallics for the world steel industry,

1996–2016 (million tonnes)
1996 2016 Annual growth %
Crude steel 749 1047 1.7

Electric 247 459 3.1
Total primary iron 551 744 1.5
Total pig iron 518 654 1.2
Blast furnace iron 514 634 1.1
Other pig iron 4 21 8.7
DRI 33 90 5.1
Total scrap 364 502 1.6
Internal 97 97 0.0
External new 95 140 2.0
External old 172 266 2.2
provided by the collection of old scrap, which has had to increase sig-
nificantly to meet demand.
The quantities of scrap used to produce steel were shown earlier.

For the future several trends will affect the relative importance of scrap
in the steel industry. Table 4.4, summarising Appendix Table 4.2, shows
our forecasts of the requirements for metallics in the steel industry.
Within a total crude steel production which is forecast to increase
at around 1.7% per annum, electric steelmaking will continue to take an
increasing share.
Primary iron production is forecast to increase by 1.5% per annum.
Within this production the output of new ironmaking technologies from
processes other than blast furnaces will increase substantially but

Iron and steel
remain minor in absolute volumes in comparison with blast furnace pig

iron production, which is forecast at over 630 million tonnes in 2016.
Production of direct-reduced iron (including processes such as
iron carbide) will continue to grow rapidly, at over 5% per annum, to
reach 90 million tonnes by 2016. Growth of consumption of DRI is
expected to continue in the countries which are now major producers
(Mexico, Venezuela, Middle Eastern countries), because the develop-
ment of their electric steelmaking depends on the local production of
DRI. But there will also be a widespread increase in the use of DRI in
countries which are not currently large producers, but where scrap
availability and quality will be significant issues in the production of flat
rolled steel. Consumption is therefore forecast to expand in the USA,
Japan, Korea, Thailand, Turkey and elsewhere. Relatively few countries
have the iron ore supply, the availability of low-cost energy or the right
local market conditions to be in a position to produce large quantities of
DRI. A large increase in production is expected in Venezuela and India,
with significant growth in existing producers such as countries in the
Middle East, a large increase in the USA and the emergence of a number
of new producers, such as Mozambique, Bahrain and Australia.
Growth in the production of electric steel has implications for the
demand for steel scrap. The forecasts take account of this demand and of
demand for scrap from BOF and open-hearth steelmaking.
The quantities of scrap required for domestic consumption, minus
imports, plus exports, are the quantities which must be collected in the
local economy (‘scrap collection’). For each country we also assess the
availability of scrap. This is done by considering the approximate quan-
tities of scrap available from each of the three sources described above:
home scrap, new production scrap and old scrap.
Within each country the total scrap requirement (net of interna-
tional trade) must be consistent with the quantities of new production
and old scrap which are available for collection. Because of steadily
improving yields in steel production, the quantities of scrap generated
within the steel industry itself have become relatively smaller over the
years. The quantity of scrap which must be provided from outside the
steel industry itself is market scrap.
Steel scrap is extensively traded and certain countries are large net
importers (Japan, Korea, Italy, Spain) while other countries are regular
net exporters (UK, Germany). The most important scrap exporter has
for years been the USA. A balance in the international scrap market

Table 4.5 Major consumers of iron and steel scrap, 1996

m tonnes
USA 73.0
Japan 45.1
China 30.4
Russia 21.8
Germany 20.4
S Korea 19.7
Italy 17.1
France 10.1
Spain 9.6
Turkey 9.6
Ukraine 9.4
United Kingdom 8.0
World total 364.0
therefore requires that the USA exports sufficient to supply the quanti-
ties not available from other countries. Forecasts of scrap requirements
must therefore also not lead to implausible demands on the leading
exporting countries (USA, Germany, UK, etc). Table 4.5 shows the major
consumers of iron and steel scrap.
The forms in which iron and steel becomes available as scrap and
the methods of collection were described in a previous section. We esti-
mate that some 267 million tonnes of external scrap were consumed in
1996. As noted, a further 97 million tonnes of scrap or more were con-
sumed in the form of internal scrap circulating within the steel plants. Of
the 275 million tonnes of external scrap consumed, we estimate that 95
million tonnes was new industrial scrap and 172 million tonnes was old
scrap.
The availability of scrap to meet the demand for recycled metal is
a constant issue for debate. Certain countries feel themselves perma-
nently short of scrap and this leads commentators to suppose that there
is a general worldwide shortage.
New industrial scrap can only be recovered from products which
are being manufactured, i.e. which are going into current consumption.
In industrial countries a very high proportion of new industrial scrap is
recovered. This will continue, and the scope for increases in this type of

Iron and steel
recycling is limited. It depends essentially on the volume of production

of steel-using products and the trend to reduced scrap losses in the fab-
rication process. For the numerical estimates we assume that new
industrial scrap amounts to 15% of the quantity of material taken into
the fabricating industry and that all of this is in principle available for
recycling.
Old scrap can only be recovered from iron and steel products which
have been sold into the economy, i.e. from past consumption. The cost
of remelting steel scrap is less than the cost of producing crude steel
from iron ore. The cost of remelting steel scrap and casting a standard
billet or slab is of the order of $100 per tonne, including some profit for
the steelmaker. The cost of producing crude steel and casting a billet or
slab from iron ore is of the order of $180 per tonne, including profit, for
the lowest-cost steel producers. A scrap-based electric furnace producer
can therefore afford to pay at $80 per tonne for steel scrap and be com-
petitive on the end-product with the lowest-cost integrated steelmaker,
FOB at the plant. Since the lowest-cost integrated plants are close to iron
ore sources in countries like Brazil and must therefore transport their
steel to major consuming markets, scrap-based steelmakers in the USA
or Western Europe also have a transport cost advantage of perhaps $20
per tonne. This means that they can pay at least $100 per tonne for steel
scrap and be competitive with the lowest-cost integrated steelmaker on
a delivered basis.
Iron and steel scrap generally costs less than $100 per tonne to col-
lect, sort and transport to a consumer in the same country. For any level
of market demand for the products which can be made from scrap, it will
therefore usually be commercially attractive for merchants and con-
sumers to recycle the maximum quantities of scrap.
Consequently, steel scrap is a material which is capable of long-
distance, international transport. For these reasons there is an incentive
to collect it, and large quantities of easily recyclable metal will not be
allowed to remain uncollected anywhere in the world.
However, when steel markets are depressed the price of scrap
can fall below $100, and there are also areas where the costs of transport
raise the delivered price of scrap to levels which may not be economic
for the collector and processor. We estimate that the minimum cost
for collecting, processing and delivering acceptable scrap to a consumer
or port in the local area is approximately $60 per tonne. When the
price to merchants falls to this level, scrap collection will be uneco-

600
500
million tonnes
400
External old
300 External new
Internal
200
100
0
1976 1981 1986 1991 1996 2001 2006 2011 2016
Years
4.3 Steel scrap: world consumption by type.
nomic and the supply of scrap will fall. At these times scrap will remain
uncollected.
Our forecasts indicate that the demand for external scrap will
grow from 287 million tonnes in 1997 to 406 million tonnes in 2016, an
average growth of 2.1% per annum. This is a large absolute increase in
the quantities of scrap which will need to be recovered and traded in the
market (see fig 4.3).
Of the external scrap required in 2016 266 million tonnes will be old
scrap. Taking account of the quantities which have entered the world
economy over the past 100 years or more, and allowing for various
lengths of life of steel in use, we have an approximate estimate of the
quantity of old scrap which is available for recovery in any year. This
shows that in 1996 349 million tonnes of old scrap were available for
recovery and 172 million tonnes (49.4%) were recovered. Over the period
from 1979 this estimated recovery rate has been in the range of 47% to
61%, and the collection rates in 1994–96 were the lowest in this period.
Our forecasts indicate that the recovery rate will increase gradually
in the future, but that it will not exceed 60% at any time. This leads us to
the conclusion that the balance of metallic feedstocks for steelmaking in
our forecasts, which include the increase in DRI and pig iron consump-
tion in electric steelmaking, are consistent with a the available supply of
steel scrap. As noted earlier, particular qualities of steel scrap may expe-
rience higher growth in demand or lower growth in supply than the total
for all types of scrap.
An alternative benchmark indicator of the availability of scrap is to
consider the quantities of scrap which will have to be collected each year

Iron and steel
in relation to the quantity of steel entering the economy in that year. On

this measure the external scrap collected in 1996 was equivalent to 42%
of the steel entering the economy (finished steel consumption). This
proportion has remained steady since 1970 in the range of 40–44% and
our forecasts imply that this will continue.
The recycling of iron and steel scrap is a huge industry operating in

virtually every country of the world. Iron and steel scrap is by far the
most important form of metal scrap collection and most scrap collectors
and processors base their business on ferrous scrap, with collection and
processing of non-ferrous metals as a secondary activity.
The typical structure of the ferrous scrap industry is for a large
number of small scrap collectors to operate in an area, collecting new
and old scrap from industry, consumers and waste processors. These
small collectors may then deliver their scrap to larger merchants with
varying types of processing equipment. The larger merchants may then
supply processed scrap of known quality to steel plants in their area, or
deliver processed scrap to docks for export.
Large steel companies often have a requirement to purchase mil-
lions of tonnes of scrap each year. In this situation there is sometimes a
tendency for the steel companies to operate their own scrap merchant
business. In France, for example, the national steel company Usinor also
controls the largest scrap merchant, CFF – Compagnie Française des
Ferailles. In general steel companies have found that the scrap trade is
more effectively handled by independent, entrepreneurial companies
with a trading mentality rather than as part of a production-oriented
steel company. One alternative is then to set up commercial arrange-
ments between a large scrap merchant and a steel company, under
which the merchant is the sole or main supplier of scrap to a company or
plant. This type of arrangement is growing in popularity because it is
seen as offering the combination of stability of supply from reputable
merchants with the flexibility of dealing at arm’s length.
From the late 1990s there has also been a further tendency in the
scrap trade, in North America and Europe at least, towards the consoli-
dation of scrap merchants through takeovers and mergers. The aim of
this has been to create larger companies with greater financial stability,
greater technical ability to deal with the increasing environmental

issues, and therefore better prospects to become steel company part-

ners in scrap supply. With steel plants also beginning to use larger quan-
tities or purchased pig iron and DRI, some scrap merchants have also
started to reposition themselves as suppliers of a full range of ferrous
raw materials, trading in pig iron, DRI and other raw materials.
The difficult market conditions of 1998 proved harmful to some of
these consolidations, which had been financed by debt, and there may
be a slowdown in this process in the next few years. It remains to be seen
whether the larger corporate scrap merchants can compete with the
nimble and enterprising small scrap traders in the long term.
The ferrous scrap industry is one of the best examples of the work-
ing of free enterprise in an open market, with fluctuating prices reflect-
ing very rapidly the balance of supply and demand. Government
assistance or incentives for the recycling of iron and steel are not
needed. Government regulation of the international trade in ferrous
scrap exists in many countries, in the form of tariffs or export/import
quotas. Examples are tariffs on scrap imports into India or attempts at
quotas on exports of scrap from Ukraine. These have generally not been
successful in promoting the efficient operation of the domestic steel
industries concerned and have led to smuggling or corruption.
Like other recycling industries the iron and steel scrap industry
is concerned about the general problem of regulations which define
ferrous metal scrap in ways which make its collection, transport and
processing difficult. This general issue is covered elsewhere. (see Part
Four, Chapter 1)
A further significant long-term development in the structure of
the ferrous recycling industry will be the establishment of organised
car recycling. With the car manufacturers becoming responsible for
programmes to recycle their end-of-life vehicles (ELVs), they will estab-
lish links with the larger scrap merchants. This development could be
a further element favouring the growth of larger companies in the
industry.
The major importers and exporters of iron and steel scrap are
shown in Tables 4.6 and 4.7, while estimates of the trade in ferrous scrap
in relation to consumption for some of the major countries are shown in
Appendix Table 4.3, and world consumption by type in Figure 4.3.

Iron and steel
Table 4.6 Major importers of iron and steel scrap, 1996

m tonnes
Turkey 6.9
Italy 6.3
S Korea 5.0
Spain 4.9
Belgium/Luxembourg 3.4
Netherlands 3.1
USA 2.1
France 1.7
Canada 1.6
China 1.4
World total 49.2
Table 4.7 Major exporters of iron and steel scrap, 1996

m tonnes
USA 10.4
Germany 8.0
France 3.7
Netherlands 3.7
UK 3.4
Canada 2.1
Belgium/Luxembourg 1.9
Russia 1.7
Japan 0.9
Czech Republic 0.8
Hungary 0.8
World total 43.8
The United States is largely self-sufficient, but has significant trade.

Scrap imports come to the midwest and the east coast mainly from
Canada, while exports go from the west coast to the large importing
markets in Asia, Taiwan and Korea; from the southern states to Mexico;
and from the east coast to Turkey. The rapid growth in electric steel
capacity in the USA in the late 1990s raised the domestic demand for
scrap and correspondingly reduced the supply for the export market.
This created a realignment of supply sources for the international steel
scrap market which may be permanent.
In Asia Japan is self-sufficient and at times exports to other coun-
tries in Asia. Korea, Taiwan and other countries in the region, except
China, are large importers.

In Europe the flow of material is essentially from Germany, France

and UK into Italy, Spain and Turkey. Russia and Ukraine have recently
become large exporters of scrap.
Most international scrap trade is relatively short distance and
results from local geographical imbalances, but there are also large
ocean movements from North America to Asia and Europe and from
western Europe to Turkey and other smaller markets.
In order to place scrap prices in the wider context of the steel

market, Appendix Table 4.5 shows information for some key prices.
These are steel scrap, pig iron, DRI, semi-finished steel and finished
steel.
Steel scrap
For steel scrap we show a key indicator: the price of steel scrap in
the USA (No. 1 heavy melting scrap, buying prices delivered to
steelworks).
Pig iron
The largest Western exporter of pig iron is Brazil. Much of this is for
foundry purposes, but there is also a trade in steelmaking pig iron. The
past trend of pig iron prices can be illustrated by the estimated market
prices for steelmaking pig iron over the past few years. List prices for pig
iron have been published in the USA, but these bear little relation to
market prices. In the absence of regularly published market prices for
pig iron, we show in the table our assessment of representative average
prices of steelmaking pig iron, FOB* Brazilian port. Since 1992 Brazilian
exports of pig iron have been reduced by restrictions on the use of char-
coal in blast furnaces. Other sources of pig iron have therefore become
relatively more important. The market prices for pig iron in this table
have in later years been established CIF Far East (adjusted for freight)
and then FOB Black Sea, but are comparable with the FOB Brazil figures
for the earlier years.
* FOB (free on board) price means the price including loading on a ship at the port of
origin. CIF (cost, insurance and freight) price means the price on a ship at the port
of destination, including transport cost and insurance but excluding unloading.

Iron and steel
DRI
The largest supplier of DRI to the world market is Venezuela and
the largest buyer of traded DRI is the USA. We show our assessment of
DRI prices FOB Venezuela and CIF US port.
Semi-finished steel
For semi-finished steel we show prices for billet and slab, FOB Latin
American ports.
Finished steel
For finished steel we have information on international prices for
the major steel products. Large tonnages of steel products are traded
internationally and it is possible to speak of international prices for steel
products. In the absence of reliable price indicators for realised prices
in domestic markets, we believe that the trends of steel prices can be
observed from such international prices. These are the prices at which
export sales are made from the major suppliers, FOB at ports in the pro-
ducing area. Such prices would normally be lower than domestic market
prices by at least the amount of the freight cost from the exporting coun-
try to the consuming market, plus any import duty or quality premium
for domestic supplies. The table also shows the ‘King Steel Average’. This
is the average of the prices for individual finished steel products (heavy
plate to wire rod) weighted by the volumes of production of each prod-
uct in the Western World in each year. This therefore provides a single
indicator of ‘the price of steel’. The table also shows that price expressed
in 1998 US dollars, using the US GDP price deflator as the measure of
price inflation.
Long-term trends
Steel prices in historical dollars were at their weakest in 1982–3 and
1985 and peaked in 1989 and again in 1995. Steady prices in 1996 and
1997 were followed by a dramatic decline in steel prices in the second
half of 1998.
Steel scrap prices are extremely sensitive to actual and expected
movements in the steel market and generally move in the same direction
as, and usually ahead of, steel prices. Scrap prices peaked in 1995 and
declined sharply by the end of 1996. Scrap prices recovered in the sec-
ond half of 1997, but fell in early 1998 before an exceptional fall from
August 1998 to levels last seen in the early 1990s.

The pricing of traded pig iron for sale to electric steelmakers, who
constitute the great bulk of the regular market at present, is linked to the
pricing of steel scrap and most particularly to the international price of
scrap, which is set under current conditions by the export prices from
the USA. Pig iron prices respond with a time lag, because high scrap
prices for a few months induce EAF operators to switch to pig iron,
which then works through into the price of pig iron. Pig iron prices also
appear to have a floor, below which prices will not follow the price of
scrap. Under current conditions this appears to be around $100/tonne
FOB major origins.
The price of DRI is also linked to the price of scrap, but has
remained more stable than scrap in the range of $125–130/tonne FOB
Venezuela, yielding a premium over scrap delivered USA of around
$20/tonne.
Price relationships between steel scrap, steel slabs (semi-finished
steel) and finished steel are shown in Appendix Table 4.5 and Figure 4.4.
A scheme of price relationships for iron and steel products at all
stages of the market is shown in Appendix Table 4.4. This shows our
assessment of typical relationships between all the products, starting
from a given level of steel product prices. We believe that product prices
move in a relatively stable relationship, based on the costs of production
and transport at various stages. This includes the prices for steel scrap.
The pricing scheme in Appendix Table 4.4 indicates, for example, that if
the market price of a common product such as reinforcing bar (rebar) is
$275/tonne, billet will be $225 and No. 1 heavy melting scrap will be $115
500 500
400 400
Price ($/tonne FOB)
Price ($/tonne FOB)
Scrap
300 300
Slab
200 200 Steel
100 100
0 0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Years
4.4 Iron and steel prices.

Iron and steel
per tonne, with new production scrap in bales at $125 and fragmentised
scrap at $125. The scrap processor can pay a local collector $75 per tonne
for old steel at that time.
When rebar prices drop to $200, however, No. 1 heavy melting scrap
is potentially in the range of $60 and the processor can pay virtually
nothing for scrap from a local collector. At that point collection of old
scrap and some new scrap stops.
Future prices
Steel scrap is the most important cost factor for the electric steel-
maker, and the integrated steelmakers have for years felt themselves
under competitive pressure in most countries from the electric furnace
sector. Hence, developments in scrap prices are of vital concern for the
future both of the steel industry and the iron ore industry.
As noted above, the steel scrap market is in most countries highly
competitive, with many participants. In the short term the price of scrap
is highly volatile, responding to small changes in demand and supply. In
the longer term, however, the price of scrap steel in the international
market will be determined by the price at which the largest supplying
countries will be prepared to export the material.
Scrap is by definition surplus material which has ended its useful
life in its original form. The minimum price which scrap can command
is that which covers a minimum payment to the owner (which may be
negative if collection saves the owner the cost of disposal), the cost of
collection, transport, processing and handling, plus a reasonable return
to the scrap processor/shipper. The minimum cost at which a scrap
processor can collect and process material ready for sale and remain in
business is probably about $60/tonne, FOB scrapyard. The maximum
price which scrap can command in the longer term is the level which
justifies steelmakers switching from electric furnace processes to inte-
grated processes based on iron ore and coking coal in the lowest-cost
locations.
Unless there is an absolute shortage of scrap of particular qualities
in relation to, demand over a long period scrap prices will tend to reach a
level somewhat below the point at which new integrated steelmaking
capacity is generated in such quantities that electric steelmakers are
driven out of business. Historically, scrap prices have been sufficiently
below this critical level for the growth of electric steelmaking to be
encouraged, steadily increasing its share of world production.

Our earlier conclusion was that our base forecasts do not imply
a serious shortage in the total supply of scrap, although scrap of par-
ticularly high quality may be in short supply in some areas. The inter-
national scrap price therefore seems likely to remain in the longer term
at levels below those which encourage a major switch to integrated
steelmaking. Sales of products which compete with scrap (DRI and pig
iron for electric steelmakers) will therefore depend either on having
costs of production which are significantly lower than those of other
blast furnace operators, or on selling to customers who have particular
quality requirements or who are in geographical markets where the
delivered price of scrap is exceptionally high in relation to international
levels.
Over the period 1988–98 the price of steel scrap (No. 1 HMS as in
our tables) has averaged 30% of the price of finished steel. In 1998 this
ratio was 31%. The position in 1998 was low relative to recent years
because scrap prices fell more quickly than steel prices, but the trend of
this ratio is upwards. We expect a further small upward shift in this ratio
over time, so that the average price of No. 1 HMS would be 34% of the
price of finished steel, equivalent to an average of $123/tonne in 1998
dollars.
DRI and pig iron compete with scrap in the production of higher
quality steels, and these require a blend of scrap which contains higher
quality material. There is a premium for higher quality scrap and this has
been around $10/tonne. We would expect this quality premium to
widen under the pressure of demand for this type of low residual
material. The price of high-quality scrap would therefore average
$137/tonne over the period in 1998 dollars.

Iron and steel
Appendixes
Appendix Table 4.1 Specifications of iron and steel products

Product Element
S P Al Si Mn C
Pig iron – steelmaking minimum 0.020 0.060 0.600 0.300 4.300

maximum 0.080 0.200 1.300 1.500 4.800
Pig iron – foundry minimum 0.050 2.590 0.250 4.000
maximum 0.050 0.080 3.000 0.750 4.500
Direct-reduced iron typical 0.020 0.070 0.900 0.030 0.210
Heavy plate – ordinary maximum 0.040 0.040 0.35 1.10 0.21
Heavy plate – high strength maximum 0.040 0.040 0.35 1.60 0.18
Hot rolled plate in coil maximum 0.035 0.040 0.065 0.50 0.60 0.15
Hot rolled strip CQ maximum 0.035 0.040 0.01 0.60 0.15
Cold rolled strip CQ maximum 0.035 0.035 0.01 0.60 0.15
Cold rolled strip DQ maximum 0.035 0.025 0.01 0.50 0.10
Cold rolled strip DQ killed maximum 0.035 0.025 0.010 0.01 0.50 0.10
Cold rolled strip for tinplate maximum 0.033 0.020 0.02 0.60 0.13
Reinforcing bar maximum 0.050 0.040 — — 0.45
Sections maximum 0.035 0.025 0.01 0.60 0.15
Notes:
S sulphur
P phosphorus
Al aluminium
Si silicon
Mn manganese
C carbon
CQ commercial quality
DQ drawing quality

Appendix Table 4.2 Summary of iron and world steel metallics (million tonnes)
Item 1976 1981 1982 1983 1984 1985 1986
Finished steel consumption % 5.4 -1.0 -7.4 2.4 8.3 1.4 1.3
Finished steel consumption 526.1 552.1 511.1 523.3 566.6 573.9 581.5
Finished steel production – Est 521.6 550.5 508.0 524.7 568.8 577.6 576.9
Unexplained production -3.4 3.9 1.7 -5.1 -1.5 0.7
Hot-rolled steel production –
actual 521.6 547.2 511.9 526.4 563.7 576.1 577.6
flat products 287.7 265.0 274.6 293.3 296.0 295.2
long products 232.8 223.8 230.7 246.3 255.4 260.4
seamless tubes 26.7 23.1 21.0 24.1 24.6 22.0
Steel castings 20.0 18.4 18.2 18.2 18.3 19.0 18.7
Losses/Scrap 133.8 138.3 119.0 120.8 123.2 122.4 118.1
Yield: finished/crude 0.802 0.804 0.816 0.818 0.827 0.830 0.834
Crude steel production 675.4 707.3 645.2 663.7 710.3 719.1 713.7
electric 125.3 161.3 153.2 162.6 180.1 183.0 187.7
BOF 350.6 384.4 344.0 355.8 386.9 395.4 390.0
other 199.6 161.6 148.1 145.3 143.3 140.6 136.0
Primary iron ratio 0.728 0.715 0.714 0.703 0.706 0.712 0.713
Metallics demand 839.4 876.2 805.5 824.7 877.3 897.9 886.4
Primary iron 491.7 506.0 460.6 466.5 501.2 511.9 509.0
Pig iron – blast furnaces 485.5 494.9 450.6 455.9 488.7 497.1 492.9
Pig iron – other processes 3.2 3.2 2.9 3.0 3.5 3.6 3.6
DR iron 3.0 7.8 7.1 7.6 9.0 11.2 12.5
Scrap for steel and other uses 347.7 370.2 344.9 358.2 376.1 386.0 377.4
steelworks/home scrap 133.8 138.3 119.0 120.8 123.2 122.4 118.1
market scrap 213.9 231.9 225.9 237.4 252.9 263.6 259.3
new/prompt scrap
generation 78.9 82.8 76.7 78.5 85.0 86.1 87.2
old scrap collection 134.9 149.1 149.3 158.9 167.9 177.5 172.0
Old scrap available for
recovery 216.2 266.3 276.3 282.4 305.5 297.0 297.0
recovery ratio 0.624 0.560 0.540 0.563 0.550 0.598 0.579

Iron and steel
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
3.0 6.9 1.3 -2.4 -4.2 -2.7 2.8 1.8 3.9 -1.5
598.7 640.0 648.5 633.0 606.2 589.7 606.4 617.4 641.3 631.9
597.2 636.2 649.6 642.1 615.3 606.4 621.7 626.8 648.7 643.8
-0.2 0.1 -2.8 -6.2 -1.5 0.4 0.4 13.3 15.6 20.7
597.0 636.3 646.7 635.9 613.9 606.8 622.1 640.1 664.2 664.4
308.3 330.6 338.0 323.6 316.6 307.1 310.6 326.3 341.0 339.7
265.9 280.9 285.5 290.2 275.9 281.5 294.3 297.9 306.6 308.1
22.9 24.9 23.2 22.0 21.3 18.2 17.2 15.9 16.7 16.5
19.3 24.2 17.4 16.6 16.6 14.5 12.8 10.0 8.5 8.4
120.1 119.9 119.2 112.0 101.8 98.7 93.0 88.5 95.2 97.0
0.837 0.846 0.848 0.855 0.861 0.863 0.872 0.878 0.873 0.870
736.7 780.3 786.2 770.6 733.7 719.7 727.5 725.3 752.3 749.2
197.4 210.0 214.3 218.2 212.6 215.1 227.3 230.9 247.1 247.3
404.0 433.1 444.6 434.8 424.7 421.7 428.7 436.3 449.7 452.1
135.4 137.2 127.3 117.7 96.5 82.9 71.5 58.2 55.5 49.8
0.708 0.707 0.712 0.712 0.715 0.721 0.722 0.739 0.736 0.735
906.5 956.6 959.3 938.7 894.2 879.2 887.6 894.3 924.3 914.8
521.6 551.9 559.5 548.4 524.7 519.0 525.1 536.1 553.6 550.8
504.2 533.6 539.8 526.4 502.1 495.6 498.3 505.6 519.4 514.1
3.6 3.9 3.8 3.4 2.9 3.0 3.1 2.9 3.0 3.9
13.8 14.4 15.9 18.6 19.7 20.4 23.7 27.5 31.2 32.8
384.9 404.7 399.8 390.3 369.5 360.2 362.5 358.2 370.7 364.0
120.1 119.9 119.2 112.0 101.8 98.7 93.0 88.5 95.2 97.0
264.8 284.8 280.6 278.3 267.6 261.4 269.5 269.7 275.5 266.9
89.8 96.0 97.3 94.9 90.9 88.5 91.0 92.6 96.2 94.8
175.0 188.8 183.3 183.4 176.7 173.0 178.5 177.0 179.3 172.1
295.3 303.4 327.3 324.6 325.8 326.7 342.8 358.0 355.1 348.8
0.593 0.622 0.560 0.565 0.542 0.530 0.521 0.495 0.505 0.494


Item Forecasts
1997 1998 1999 2000 2001 2002 2003
Finished steel consumption % 6.8 -0.1 1.1 1.7 3.1 4.0 2.0
Finished steel consumption 674.6 674.1 681.6 693.2 714.3 742.9 757.8
Finished steel production – Est 687.3 687.0 694.4 705.9 727.0 737.9 752.8
Unexplained production
Hot-rolled steel production –
actual 687.3 687.0 694.4 705.9 727.0 737.9 752.8
flat products 352.1 352.6 357.0 363.6 375.1 381.5 389.9
long products 335.2 334.4 337.4 342.3 351.9 356.4 362.8
seamless tubes
Steel castings 8.4 8.6 8.6 8.6 8.6 8.6 8.5
Losses/Scrap 101.9 99.0 98.3 97.9 98.6 88.1 87.7
Yield: finished/crude 0.872 0.875 0.877 0.880 0.882 0.884 0.887
Crude steel production 797.6 794.6 801.3 812.4 834.3 834.6 849.0
electric 269.5 277.7 281.6 288.5 301.2 306.2 316.4
BOF 477.3 469.1 472.0 477.7 489.0 488.6 496.4
other 50.7 47.8 47.7 46.3 44.1 39.8 36.2
Primary iron ratio 0.725 0.728 0.730 0.730 0.728 0.728 0.728
Metallics demand 967.5 968.7 976.4 988.4 1012.5 1012.0 1028.8
Primary Iron 578.4 578.3 584.7 592.9 607.1 607.6 618.5
Pig iron – blast furnaces 540.1 534.4 537.8 543.0 554.1 551.7 558.8
Pig iron – other processes 3.7 4.0 4.1 4.7 4.8 5.9 7.0
DR iron 34.6 40.0 42.7 45.2 48.3 50.0 52.7
Scrap for steel and other uses 389.1 390.4 391.8 395.5 405.3 404.4 410.3
steelworks/home scrap 101.9 99.0 98.3 97.9 98.6 88.1 87.7
market scrap 287.2 291.4 293.5 297.6 306.7 316.3 322.6
new/prompt scrap
generation 101.2 101.1 102.2 104.0 107.2 111.4 113.7
old scrap collection 186.0 190.3 191.2 193.7 199.6 204.9 208.9
Old scrap available for
recovery 347.2 361.8 330.4 371.6 366.1 375.9 383.5
recovery ratio 0.536 0.526 0.579 0.521 0.545 0.545 0.545

Iron and steel
2004 2005 2006 2007 2008 2009 2010 2011 2016
1.3 2.5 -0.3 2.0 0.5 1.0 2.5 3.4 1.4

767.6 786.8 784.1 799.8 803.8 811.9 832.2 860.1 930.5
762.6 771.5 796.6 803.8 807.8 815.9 836.2 872.4 942.5
762.6 771.5 796.6 803.8 807.8 815.9 836.2 872.4 942.5

395.8 401.2 415.1 419.6 422.5 427.5 439.0 458.9 500.5
366.8 370.3 381.6 384.2 385.3 388.3 397.2 413.5 442.0
8.5 8.5 8.4 8.4 8.4 8.4 8.4 8.4 7.8

86.7 85.4 95.6 85.0 83.4 82.2 82.3 93.4 96.7
0.889 0.891 0.894 0.896 0.898 0.900 0.902 0.904 0.908
857.8 865.4 900.6 897.2 899.6 906.5 926.9 974.2 1047.0
324.7 332.7 351.5 355.9 362.7 371.2 385.6 411.5 459.3
500.9 504.8 524.6 521.3 521.4 524.0 534.4 560.2 585.9
32.1 28.0 24.5 20.0 15.6 11.2 6.9 2.5 1.8
0.729 0.729 0.730 0.729 0.728 0.727 0.727 0.726 0.723
1038.7 1047.1 1088.8 1084.0 1086.2 1093.8 1117.8 1174.0 1258.2
625.2 631.1 657.1 653.9 655.0 659.4 673.5 707.2 756.5
562.0 564.4 584.9 579.4 577.8 579.0 589.0 616.2 646.2
8.2 9.3 10.4 11.4 12.4 13.3 14.3 15.3 20.7
55.0 57.4 61.7 63.1 64.9 67.0 70.2 75.6 89.5
413.4 416.0 431.7 430.1 431.2 434.5 444.2 466.8 501.7
86.7 85.4 95.6 85.0 83.4 82.2 82.3 93.4 96.7
326.8 330.6 336.2 345.1 347.8 352.3 361.9 373.4 405.0
115.1 118.0 117.6 120.0 120.6 121.8 124.8 129.0 139.6

211.6 212.6 218.5 225.1 227.3 230.5 237.1 244.4 265.5
363.2 393.9 396.3 404.9 412.2 404.8 422.6 432.3 472.3

0.583 0.540 0.551 0.556 0.551 0.569 0.561 0.565 0.562

Appendix Table 4.3 Iron and steel scrap consumption and trade, 1996
(thousand tonnes scrap)
Region/country Consumption Exports Imports Net trade
United States 72958 10439 2119 8320

Japan 45053 912 1209 -297
China PR 30449 66 1393 -1327
Russia 21782 1742 91 1651
Germany FR 20357 7965 1195 6770
Korea Republic 19721 21 5027 -5006
Italy 17110 33 6337 -6304
France 10101 3705 1690 2015
Spain 9642 19 4883 -4864
Turkey 9566 14 6853 -6839
Ukraine 9418 194 181 13
United Kingdom 8009 3449 182 3267
Others 89806 15282 18087 -2805
Identified world total 363972 43841 49247 -5406

Iron and steel
Appendix Table 4.4 Price relationships for steel products ($ per tonne)
Product Margin above Product
base price
Pig iron
(FOB Brazil)
Steelmaking (basic) grade -148 127
Foundry grade -143 132
Direct-reduced iron
(FOB Venezuela)
Hot-briquetted iron (HBI) -155 120
Steel scrap
(delivered to steel plant in main consuming area)
No. 1 heavy melting scrap -160 115
New production steel bales/No. 1 bundles -150 125
No. 2 bundles -179 96
Fragmentised steel -150 125
Heavy steel turnings -180 95
Heavy cast iron -169 106
(delivered to scrap merchant/processor)
Old light steel -200 75
New production steel -167 108
New loose light steel cuttings -182 93
Cast iron borings -191 84
Semi-finished steel products

Slab -45 230
Billet -50 225
Finished steel flat products

Plate 65 340
HR coil 65 340
CR coil 160 435
Galvanised (hot dip) 270 545
Finished steel long products

Heavy sections 90 365
Rebar 275
Merchant bar 28 303
Wire rod – low carbon 33 308

Appendix Table 4.5 Price relationships for iron and steel ($ per tonne)
Period HM scrap Pig iron DRI Billet Slab Plate
USA Black Sea Venezuela USA S America S America Europe
$/t d/d $/t FOB $/t FOB $/t CIF $/t FOB $/t FOB $/t FOB
Years
1982 62 100 319
1983 73 110 79 93 280
1984 85 100 73 90 180 278
1985 73 90 73 93 165 268
1986 72 98 77 94 187 184 273
1987 84 110 80 95 192 196 293
1988 108 115 83 97 246 260 416
1989 106 130 113 126 260 250 458
1990 105 125 101 112 230 212 417
1991 92 130 107 118 220 212 405
1992 84 102 100 114 207 180 380
1993 110 124 97 110 234 214 356
1994 125 124 118 134 224 242 369
1995 132 145 123 142 237 271 482
1996 126 138 129 147 222 221 461
1997 124 136 128 143 228 247 452
1998 107 123 123 139 220 229 404
Average 111 127 111 126 230 231 418
1988–98
Quarters
1989 Q1 113 110 121 272 282 485
Q2 111 110 121 273 260 467
Q3 103 115 131 254 238 445
Q4 97 116 129 240 221 433
1990 Q1 101 100 111 226 217 424
Q2 108 100 110 226 201 407
Q3 109 99 110 237 210 420
Q4 104 105 116 232 219 417
1991 Q1 100 107 116 228 223 417
Q2 92 106 119 228 214 421
Q3 89 111 125 222 210 399
Q4 87 103 114 203 200 385
1992 Q1 84 113 106 119 206 200 390
Q2 84 98 97 111 208 188 387
Q3 83 93 98 112 197 165 375
Q4 84 104 98 113 217 167 368
1993 Q1 100 115 94 105 232 189 357
Q2 102 126 97 107 242 227 357
Q3 110 131 98 114 232 224 360
Q4 129 128 99 113 229 218 352

Iron and steel
HR coil CR coil Galvanised Sections Rebar Merch. Wire King steel

Europe Europe Europe Europe Europe bar rod Average
$/t FOB $/t FOB $/t FOB $/t FOB $/t FOB Europe Europe Current 1998 $
$/t FOB $/t FOB $ $/t FOB
$/t FOB
279 351 396 280 209 265 264 293 479

245 319 336 232 186 221 240 258 406
250 318 360 225 196 224 250 262 398
228 280 324 224 201 212 233 244 360
241 318 371 250 238 246 250 272 390
274 364 436 261 254 261 265 302 420
408 525 627 347 293 319 332 415 559
414 525 709 424 316 381 356 446 577
340 436 581 355 288 308 323 376 468
331 416 476 359 280 295 314 357 424
303 385 446 328 258 284 296 332 386
290 373 446 332 272 306 280 327 373
334 400 460 334 278 305 293 347 377
434 545 655 373 286 316 328 434 459
335 437 585 378 260 282 286 375 388
330 423 623 401 289 302 302 386 392
278 376 558 396 250 278 283 344 344
345 440 561 366 279 307 309 376 432
445 550 717 453 337 423 370 471

430 541 718 443 333 408 365 462
403 522 725 420 303 368 355 440
377 487 676 380 290 325 335 411
356 452 617 367 287 312 327 388
329 428 575 348 278 305 317 368
338 440 582 345 293 308 325 377
338 423 550 360 295 305 325 372
338 424 525 367 297 305 322 371
345 433 483 367 280 303 318 367
324 405 448 351 273 285 313 348
318 400 448 350 270 285 305 343
323 400 445 350 270 285 310 345
314 387 445 333 267 275 300 337
290 380 452 315 250 290 290 326
283 373 442 315 247 287 283 321
282 368 442 323 258 298 275 320
293 378 450 334 277 308 283 331
297 382 452 337 278 311 285 333
287 365 442 333 273 306 278 325


Period HM scrap Pig iron DRI Billet Slab Plate
USA Black Sea Venezuela USA S America S America Europe
$/t d/d $/t FOB $/t FOB $/t CIF $/t FOB $/t FOB $/t FOB
1994 Q1 134 128 118 132 225 214 345

Q2 116 128 118 133 225 241 348
Q3 120 119 118 140 222 250 370
Q4 128 120 117 132 224 264 412
1995 Q1 133 135 117 141 238 278 454
Q2 131 148 123 140 239 292 486
Q3 134 150 126 143 240 278 505
Q4 128 146 126 145 233 237 484
1996 Q1 130 148 125 143 235 261 494
Q2 131 143 128 147 230 218 478
Q3 127 134 133 151 213 225 440
Q4 114 131 129 145 221 232 448
1997 Q1 117 133 128 144 228 237 448
Q2 121 133 129 144 228 240 452
Q3 130 133 122 136 229 250 455
Q4 130 148 133 148 229 260 455
1998 Q1 125 145 124 142 224 260 450
Q2 118 128 124 140 226 254 423
Q3 110 119 133 148 228 223 410
Q4 77 102 110 126 200 180 333

Iron and steel
HR coil CR coil Galvanised Sections Rebar Merch. Wire King steel

Europe Europe Europe Europe Europe bar rod Average
$/t FOB $/t FOB $/t FOB $/t FOB $/t FOB Europe Europe Current 1998 $
$/t FOB $/t FOB $ $/t FOB
$/t FOB
283 358 437 330 272 303 277 322

305 367 440 333 278 305 283 331
343 395 452 335 280 305 297 348
405 482 512 338 283 308 317 389
441 536 592 352 290 316 327 423
457 573 675 378 295 326 342 450
458 587 708 383 293 324 342 458
379 486 643 378 265 297 302 405
421 540 676 381 280 312 324 434
349 455 630 372 242 277 282 384
310 410 515 369 257 267 273 351
321 416 557 395 285 294 294 371
325 415 598 395 285 295 295 378
330 422 632 401 292 302 300 387
333 430 635 405 295 305 305 391
331 427 628 405 285 305 308 388
328 422 620 405 280 305 310 384
300 398 573 408 278 305 307 366
270 373 550 410 248 287 285 343
212 312 488 360 192 213 229 282

1 Gold
Tony Warwick-Ching


1.2.1 Direct use
1.2.2 Refining
1.3 The gold market


1.1 Physical characteristics, properties,
products and end-uses
Gold is a relatively heavy metal, exceptionally malleable and

ductile, a good conductor of heat and electricity, and immune to
tarnish. Impervious to corrosion by air or water, it is also resistant to
the strongest acids. One of only two metals that is not a shade of
grey, gold is of course distinguished by its attractive colour and
appearance.
To its properties of beauty and versatility, gold adds that of relative
scarcity. As a result it is among the most valuable metals in common use.
Gold is not a toxic or deleterious material, but its intrinsic value natural-
ly reinforces the incentive to recycle, and for this reason alone its recla-
mation from scrap receives a very high priority.
From time immemorial the main uses of gold were decorative and
monetary. Decorative applications have retained their importance, with
personal jewellery being much the most significant end-use. But mon-
etary uses for gold have almost disappeared. Circulating coin has not
been produced since the inter-war period, and dollar convertibility
ended in 1971. Gold retains merely a residual role as a reserve asset, in
the form of bullion, for central banks. Investment and commemorative
coins are still produced each year, though here too the trend has been
downward. Other uses for gold draw on its qualities of durability (e.g.
dentistry) and good conductivity (e.g. electronics).
The amount of gold consumed in the manufacture of finished
goods has been on a rising trend since supply began to grow with the
birth of a mining boom at the start of the 1980s. Global fabrication off-
take reached a peak at almost 3900 tonnes in 1997, before falling back
under the impact of the Asian economic crisis.
Out of a total of over 3750 tonnes of gold consumed in 1998,
jewellery accounted for just over 85%. The overwhelming importance
of jewellery has grown fairly steadily in both absolute and relative
terms over the years. Demand for jewellery has benefited from
stagnant or declining real prices for gold over much of the period

Part 2: Precious metals
Table 1.1 Gold consumption by end-use, 1970–99

1970 1975 1980 1985 1990 1995 1999
Jewellery tonnes 1006 516 513 1212 2188 2792 3178

% 73.1 52.9 50.3 77.0 87.2 84.7 84
Electronics tonnes 89 66 95 116 216 204 248
% 6.5 6.8 9.3 7.4 8.6 6.2 6.5
Dentistry tonnes 59 63 64 54 62 67 65
% 4.3 6.5 6.3 3.4 2.5 2.0 1.7
Other industrial tonnes 62 59 62 56 73 110 102
% 4.5 6.0 6.1 3.6 2.9 3.3 2.7
Medals, etc tonnes 54 21 41 14 22 35 49
% 3.9 2.2 4.0 0.9 0.9 1.1 1.3
Official coin tonnes 46 251 245 123 123 87 136
% 3.3 25.7 24.0 7.8 4.9 2.6 3.7
Total tonnes 1376 976 1020 1575 2508 3295 3722
Note: Former Eastern Bloc countries are only included from 1990 on.
Source: CGF, GFMS, Virtual Metals.
since the early 1980s. Table 1.1 shows gold consumption by end-use
from 1970 to 1999.
Jewellery includes a multitude of products, with grades ranging
from 8 carat (33.3% gold) to 24 carat (100% gold). The other metals with
which gold is commonly alloyed include copper, silver, zinc and nickel.
One of the most popular classes of jewellery is 18 carat (75% gold). This is
standard in Italy, the world’s second largest producer of jewellery, and
in most of western Europe. In North America, Germany and the UK
jewellery is typically of lower fineness. The markets of Asia, which are the
biggest consumers of jewellery, prefer products with a fineness of 22
carats or higher.
The second largest application for gold is electronics, where gold
is used for plating lead frames, contacts, connectors and other com-
ponents, and for making bonding wire. After a period of intense thrifting
and economisation in the 1970s the demand for gold by the electronics
industry has grown fairly steadily, and future prospects in this area
remain promising.
Apart from some decorative and industrial uses, this is less true of
other traditional applications for gold. Dental offtake, for example, has
stagnated as economies in the state funding of dental health schemes
and the advance of alternative materials take their toll. Sales of official
coins, including bullion coins, have declined and gold consumption in

Gold
this area has greatly shrunk from the peak levels of the 1970s and early
1980s. Medals and imitation coins have dwindled into insignificance as
end-uses for gold.
1.2.1 Direct use
Gold occurring in scrap can follow one of two main routes in the
course of being recycled. The simplest is that of direct use in the manu-
facture of end-products. Many articles such as carat jewellery (as dis-
tinct from costume jewellery) and coin have a high gold content and
do not require separation or segregation, so they are very easy to recycle
in this way.
A substantial proportion of scrap arisings is of appropriate grade
and consistency to be used as raw material by goldsmiths and jewellery-
makers in the output of new finished products. Large amounts of jew-
ellery are recycled, the main limitation on this being the consistency and
grade of the secondary material involved and the caratage of the articles
being produced. Though some selection and segregation of material
may be required, and blending with virgin metal may be necessary to
achieve the desired specification for the finished item, no refining is
involved in direct use and processing costs are low. In essence, the ma-
terial will be melted and formed directly into the semi-finished or fin-
ished article. However, for many other materials, particularly if they are
of more complex composition, a very different approach is required and
metallurgical refining is employed.
1.2.2 Refining
With material which goes for refining, preliminary sorting, segre-

gating, concentrating and other preparatory stages may be necessary,
particularly for bulky items which contain more than one recoverable
metal. When the material is in appropriate form it is then sent to a
specialist refinery for recovery of the gold – and other precious metals if
present – as high-purity metal.
In the case of copper-bearing scrap, such as discarded electronic
equipment, the material is sent to a copper smelter for recovery of base

metals prior to the reclamation and refining of the precious metals. The
latter are recovered in the form of sludges and slimes which settle in the
electrolytic tankhouse of the copper refinery. These residues are then
processed by one of the standard precious metals refining techniques.
There are two main gold refining technologies – pyrometallurgy,
the traditional approach, and hydrometallurgy, often seen as the more
modern method. The classic method of pyrometallurgy is the Miller
process, invented at the Royal Mint in Sydney in the 1880s. The Miller
process is typically employed to treat high-grade raw material of either
primary or secondary origin, and the starting point will often be dore
bars containing gold, silver and small amounts of base metal.
The process makes use of the different temperature reactions of
gold to chlorine, and of silver and base metals to chlorine. The silver and
base metals react to form gaseous or liquid chlorides which are readily
removable from the melt. The gold does not react but forms a dense pure
metallic residue at the bottom of the vessel. Once separated out the gold
can be recovered in a form acceptable for commercial use.
The Miller process is ideal for the production of bullion with 995
fineness (a purity of 99.5% gold), and is therefore suitable for making
bars which meet the traditional requirements of the international mar-
ket. A growing proportion of output has to be sold with a fineness of 9999
(a purity of 99.99% gold), however, and to achieve this gold is processed
in an electrolytic refinery, in a process analogous to that undergone by
copper.
A number of the major gold refiners and most of the small op-
erations now favour hydrometallurgical refining methods. The main
advantage of these is that they can readily cope with a wide range of
metallic feedstocks, including material containing deleterious or toxic
elements. They are therefore particularly appropriate for treating scrap
and lower-grade or complex materials of any origin. Moreover they are
suitable for refining on both small and large scales.
Once the gold has been recovered in refined form, either from a
Miller process or from a hydrometallurgical circuit, it is ready to be
turned into marketable form. The bulk of newly refined gold is cast into
bars, of which the commonest is the classic 400-ounce good delivery
bar. But a large and growing proportion is cast into one of the smaller bar
forms which are now popular. Other refinery products include gold
grain, for use in jewellery manufacture, and various semi-manufactured
forms such as tube, sheet and strip.

Gold
1.3 The gold market
Refined gold in the form of high-purity bullion is sold on a retail

basis in many towns and cities around the world. London, Zurich and
New York are the main locations for the professional and wholesale trad-
ing of gold, however. Zurich is perhaps the most important wholesaling
centre for the supply of bullion to markets around the world, and New
York has the most important futures exchange. London attracts the bulk
of the business in forward trading and derivatives, as well as retaining a
substantial role in the physical market, and is pre-eminent as the price-
setting centre for the international market.
Five members of the London Bullion Market Association (LBMA)
meet twice each day to agree a price which clears their positions, in a
minor ritual known as ‘the fix’ or ‘fixing’. This is taken as the main refer-
ence price for the global market. The settlement at the fixing acts as an
international benchmark price for gold, although the bulk of trans-
actions take place through continuous dealing each day in London,
Zurich, New York, Singapore, Hong Kong and in many other locally-
oriented trading centres around the world.
The standard product traded in the London market and priced at
the daily fixings is the good delivery bar. The main specifications include
a weight of 350–450oz, a fineness of not less than 995 parts per thousand,
good appearance and the stamp of a registered refiner or assayer. The
other main form of bar in common use is the kilo-bar, which is typically
of 9999 fineness and trades at a small premium to good delivery.
Other refined products sell at appropriate premiums to good deliv-
ery, as do many semi-manufactured and finished products. Scrap and
other unprocessed material sells at discounts which reflect the cost of
upgrading to refined metal.
Recycling has long played an important role in gold supply. Figures

published by Gold Fields Mineral Services and its predecessor Consoli-
dated Gold Fields indicate that old scrap accounted for nearly
a fifth of total gold supply in the Western World between 1980, the

first year for which statistics are available, and the late-1990s. This
average concealed a wide variation from one year to another, ranging
from a high of over 37% in 1980 to a low of under 13% in 1989. If the
former Eastern Bloc is included the role of scrap is reduced, but it
remains appreciable.
Dispersive applications account for a relatively small proportion of
gold end-uses, so the potential for permanent loss of gold in discarded
goods is relatively small. Moreover, the exceptional value of gold encour-
ages a high level of effort in its recovery. Table 1.2 shows gold supply
from scrap.
As in other metals, scrap arisings of gold fluctuate markedly, react-
ing to a variety of market influences. Between 1980 and 1981, for exam-
ple, the amount of gold recovered from scrap in the Western World fell by
half. It then gradually revived in the wake of rising consumption, and
reached a new peak when volatile conditions returned to the gold mar-
ket in 1986. In 1993–97 scrap volumes ran at relatively high levels by
historical standards, although as a proportion of total gold supply old
scrap remained unremarkable. In 1998, however, dishoarding in Asia
precipitated a flood of old scrap on to the market and recycling again
rose to very high levels.
In less exceptional economic conditions the most important single
influence on scrap supply is the level of the bullion price. High prices
encourage owners of carat jewellery and other articles to trade them in
Table 1.2 Gold supply from scrap, 1988–98

Scrap Mine Other Total
tonnes % tonnes % tonnes % tonnes
1988 394 14.3 1908 69.5 444 16.2 2746

1989 393 12.7 2063 66.9 629 20.4 3085
1990 530 17.1 2133 68.9 432 14.0 3095
1991 480 15.2 2159 68.2 527 16.6 3166
1992 487 13.5 2234 62.0 881 24.5 3602
1993 574 16.2 2287 64.6 680 19.2 3541
1994 615 18.3 2278 67.8 469 14.0 3362
1995 623 17.2 2273 62.7 731 20.2 3627
1996 640 18.2 2357 67.2 513 14.6 3510
1997 611 14.5 2472 58.5 1143 27.0 4226
1998 1094 26.3 2529 60.8 536 12.9 4159
Source: CGF, GFMS.

Gold
for their gold content. The price sensitivity of supply from such sources
varies considerably between different countries. In many developing
countries a relatively limited price rally will induce holders of jewellery
to cash in their assets, which have a well-established role as an invest-
ment and store of wealth. Even in more sophisticated societies scrap will
appear in response to more significant price increases. This was very
apparent in the 1979–80 price boom, when dealers in Europe and the
USA were besieged by owners of jewellery, ornaments and coin trying to
cash in on the windfall value of their possessions.
The rate at which the gold price rises can also have an influence on
levels of scrap arisings. On one or two occasions during the mid–late
1980s a swift upturn in the gold price was sufficient to trigger a surge in
scrap arisings in two major gold-consuming regions, the Indian sub-
continent and the Middle East, despite the fact that the level eventually
reached by the gold price was not particularly impressive by the
standards of earlier years.
More important, at times, can be sales of gold-bearing articles at
points of economic distress. Such episodes have followed crop failures
in the Indian sub-continent, sharp falls in oil revenues in the Middle East
and debt crises in Turkey and Latin America. Most dramatic of all was the
experience in South East and East Asia during the economic crisis of
1997–98, when hundreds of tonnes of gold holdings were liquidated
from Korea, Thailand, Indonesia and elsewhere.
The availability of gold scrap can be influenced by a more muted
effect of the kind seen in base metals and other commodities. Higher
prices make it worthwhile for dealers and refiners to accelerate
the reclamation of the metal content of old scrap items, and to process
lower grade materials than would normally be economic. To the extent
that better prices for gold coincide with higher prices for base metals
such as copper, the amount of gold being reclaimed from obsolete
industrial equipment which combines the two will be correspondingly
greater.
Scrap comes on to the market in many different grades and forms.

Indeed one international refiner has a list of around 40 distinct classes of
gold refining materials. The number of significant sources of scrap is,

however, much more limited. Classification of gold refining materials is

shown in Table 1.3.
Among high-grade materials jewellery is by far the most important.
Jewellery includes a considerable variety of forms and grades, depend-
ing on the sources from which it arises. The Asian markets are given
over to high carat jewellery, which ranges from 22 carat to 24, and
consequently generates scrap containing between 90% and 100% gold.
Mediterranean Europe, Japan and Latin America, dominated by 18 carat
jewellery, are sources of 75% gold scrap, while the USA, the UK and
Germany are markets for significantly lower carat products and hence
yield lower-grade jewellery scrap.
The jewellery sector gives rise not only to old scrap in the forms
just outlined, but also to appreciable amounts of new scrap generated
by goldsmiths and jewellery makers in the course of manufacturing
finished articles. This material includes semi-manufactures, such as
tube, rod and sheet, and also castings, sweeps, swarfs, drillings,
turnings, dusts, residues, filings and other valuable gold-bearing
material.
Other high-grade scrap includes coins, medals, medallions and
bars of all sizes. Older coins, such as British sovereigns and Krugerrands,
are generally 22 carat purity, and when scrapped they will constitute
material grading 91–92% gold, the balance being copper. This is also true
of the US Eagle, the only remaining bullion coin which is not a 24
carat product. Most new coins, particularly bullion coins, are 24 carat
specification and will grade 100% gold. New scrap will include material
generated in the rolling and stamping of blanks for coins and other
stamped items.
A significant source of old scrap of relatively high grade is dental
material, though grades can vary quite widely here, with the gold con-
tent often being alloyed with base metal or other precious metals.
The most important of the lower-grade materials is electronic
equipment and components, including printed circuit boards, switches,
relays, assemblies, components, solutions, sludges, plated parts, inlays
and alloys. The gold content of these articles will vary widely, reflecting
their design and the extent to which their host material has been sorted,
separated and upgraded. Depending on the nature of the item and the
way it has been retrieved for recycling, electronics scrap may contain
recoverable quantities of copper, silver, palladium and other platinum
group metals.

Gold
Table 1.3 Classification of gold refining materials

Refining material Sources Possible other
precious metals
present
Brazing alloys Aero, electronic & auto industries Ag, Pd

Buffing sands Silversmiths Ag
Bullion Primary & secondary producers Ag
Carat gold scrap Manufacturing jewellers Ag, Pt, Pd
Casting scrap Manufacturing jewellers & silversmiths Ag
Coinage scrap Manufacturing of coin blanks, Mints Ag
Coins – demonetised Mints, Government national banks Ag
Crucibles – PGM Laboratories, electronic & glass Ag, Pt, Rh, Ir
industries
Crucibles – refractory Manufacturing jewellers, precious Ag, Pt, Pd, Rh
metals melters
Dental gold alloys Manufacturers, dental surgeons &
laboratories
Doré metal Primary & secondary producers Ag, Pt, Pd, Rh
Drillings Manufacturing jewellers & Ag, Pt, Pd, Rh, Ir
silversmiths
Drosses Industrial users of precious metals.
Precious metal melters Ag
Electronic contract scrap Manufacturers and users of electrical Ag, Pt, Pd
contracts
Electronic scrap Electronic industry Ag, Pt, Pd, Rh, Ir
Electroplating scrap Electroplaters, manufacturing Ag
jewellers
Electroplating solutions Electroplaters, manufacturing
jewellers & silversmiths
Fluxes Manufacturing jewellers & Ag, Pt, Pd, Rh
silversmiths, precious metal
melters
Furnace bricks Precious metal melters Ag, Pt, Pd, Rh
Gauzes Manufacturing jewellers Ag, Pt, Pd
Laboratory ware – PGM Laboratories, electronics industry Ag, Pt, Rh, Ir
Lemel bars Manufacturing jewellers Ag, Pt, Pd
Medallion scrap Mints, manufacturers of blanks Ag
Millings Industrial users of precious metals,
manufacturing jewellers & Ag, Pt, Pd, Rh
silversmiths
PGM metallic scrap Industrial users, manufacturing Ag, Pt, Pd, Rh, Ir, Ru
jewellers
Polishing mops Manufacturing jewellers & Ag
silversmiths
Pottery industry wastes Pottery industry Ag, Pt, Pd
Residues Manufacturing jewellers Ag
Residues – PGM – HG Industrial users, scrap collectors Ag, Pt, Pd, Rh, Ir, Ru
Skimmings Precious metal melters, Ag
manufacturing jewellers &
silversmiths

Table 1.3 Continued

Refining material Sources Possible other
precious metals
present
Slags Precious metal melters, Ag

manufacturing jewellers &
silversmiths
Sludges Photographic industry, electroplaters, Ag
intermediate collectors & refiners
Solutions Electroplaters Ag, Pt, Pd, Rh, Ru
Swarf Industrial users, manufacturing Ag, Pt, Pd
jewellers
Swarf – metallic – PGM Industrial users, manufacturing Ag, Pt, Pd
jewellers
Sweeps – jewellers Manufacturing jewellers & Ag, Pt, Pd, Rh
silversmiths
Sweeps – prepared Industrial users, manufacturing Ag, Pt, Pd, Rh, Ir, Ru
jewellers & silversmiths,
intermediate processors & refiners
Turnings Manufacturing jewellers Ag, Pt, Pd
White gold scrap Manufacturing jewellers Ag, Pt, Pd
Source: Engelhard.
Other lower-grade forms of scrap include rolled and plated

decorative items, though again the grade of the material will depend on
the condition of the article and the extent to which the gold has been
separated from its substrate.
There are no specific incentives for the recycling of gold-bearing

scrap, since the intrinsic value of the precious metals present makes
recovery attractive enough already. Other than the environmental and
health concerns which apply to all metallurgical processes in the indus-
trialised countries, there are no specific restraints applying particularly
to gold recycling.
With the amounts of gold reclaimed from scrap each year typically
measured in hundreds of tonnes rather than thousands, the infrastruc-
ture and institutions involved in recycling are limited in scale compared
with those for base metals and other bulkier commodities. Much of the
jewellery scrap recycled is handled by jewellery makers themselves,
receiving jewellery in appropriate grades and simply remelting and

Gold
blending with the raw material they use to make new jewellery. This
accounts for the very high figures for recycling in such regions as the
Indian sub-continent and the Middle East.
Appreciable volumes of jewellery also go to refiners, however, and
it is processed there along with the assortment of other materials from
primary and secondary sources. In the case of non-jewellery products
there is much less recycling by direct use, and the great bulk of scrap
reclaimed from end-products is recovered by refiners.
In contrast to the base metals, the recycling chain in gold is short,
with no more than one or two staging posts between the point where
scrap material arises and the point where it is recycled to marketable
product. Typically, jewellery retailers or goldsmiths act as collecting
points for scrap materials sold by private individuals or by jewellery
makers, though the latter often bypass the wholesaler and deal direct
with a refinery or its agent. Banks and dealers may act as wholesalers,
concentrating the scrap received from a particular country or region and
sending it direct to a refinery for recycling.
The refining industry itself is quite highly concentrated, with the
main centres in Europe and North America. Japan and Latin America
also have some refining capacity. In Europe such companies as Johnson
Matthey, Degussa, Heraeus, Comptoir Lyon Allemand and the Swiss
banks (SBC/UBS and Crédit Suisse) are prominent, as is the Pamp
operation established in Switzerland in the 1980s. Some of these compa-
nies are also active in North America and elsewhere.
The big refineries originally established to handle the newly-mined
output of South Africa, Australia and Canada – Rand Refinery, Australian
Gold Refiners and the Royal Canadian Mint – also handle scrap. Finally,
an important role in recycling electronic and other gold-bearing scrap is
played by copper refiners, some of whom have their own dedicated pre-
cious metals refining units. These include such companies as Asarco
and Noranda in North America, Norddeutsche Affinerie and Union
Minière in Europe and Mitsubishi Materials in Japan.
Published figures showing the supply of gold from old scrap by

region greatly understate the scale of recycling in certain countries,
notably in Europe. But they also highlight the importance of recycling in
such countries as India, Saudi Arabia, Turkey and Egypt. In all these

Table 1.4 Supply of gold from old scrap, 1980–99 (tonnes)

1980 1985 1990 1995 1999
Europe 41.3 39.9 36.2 61.7 53.8

Italy 18 15 14 27 20
Germany 3.5 4 3.5 4.3 4.3
UK 3 3 4 3.8 3.3
Other 16.8 17.9 14.7 26.6 26.2
N America 75.8 41.8 46.2 59.7 55.4
USA 70.9 37.7 41.3 54.9 51.0
Canada 4.9 4.1 4.9 4.8 4.4
Latin America 17.7 28.6 25.2 30.3 21.4
Mexico 0 5.1 7.5 16 4.0
Brazil 5.5 10 6 4.8 5.6
Argentina 5 6 3.8 2.5 2.0
Other 7.2 7.5 7.9 7 9.8
Middle East 169.6 136 198.4 235.7 197.3
Saudi Arabia 6 19.4 57 97 67
Turkey 28 40 31 47 56
Egypt 22 48 72.9 40 32
Kuwait 7 3 6 17.8 14
Iraq 11 15 19 15.2 1.4
Iran 85 0 5 10 11
Other 10.6 10.6 7.5 8.7 15.9
Indian sub-continent 63 55 70 108 102.2
India 59 50 60 97 82.0
Other 4 5 10 11 20.2
East Asia 110.4 25.2 118 76.4 125
Japan 16.4 9.4 69.6 15.9 15.5
Indonesia 70 5 15 12.5 38
S Korea 0 0 8.9 11 13
Thailand 1 1.5 8 9 15
Hong Kong 7 0 5 8 12.7
Taiwan 1 3 5 7 10.6
Other 15 6.3 6.5 13 20.2
Africa 13.8 7.2 8.2 15.1 8.9
Australia 0 0 0.5 2.7 2.1
USSR/CIS na na 23 18.5 17.5
China na na 3.8 15 29
Total 491.6 333.7 529.5 623.1 612.6
Source: CGF, GFMS.

Gold
cases recycling of jewellery through direct use has traditionally been an

important feature of the local gold market, although in Saudi Arabia,
Turkey and India there are now also modern gold refining operations
able to handle a range of raw materials. The supply of gold from old scrap
is shown in Table 1.4.
International trade in gold scrap is difficult to track. Much of it is
unrecorded and even where it is documented reported figures may
understate the true scale of activity. Countries which disclose a substan-
tial import trade in secondary materials include Switzerland, the UK,
France, Germany and Canada, and large exporters include the USA and
most of the bigger jewellery consumers of the Middle East.
Terms for recycling gold scrap depend very much on the route
chosen. For old jewellery taken to a goldsmith for turning into new
articles – a very common recycling pattern in such countries as India,
Indonesia and parts of the Middle East – the charge would be simply the
working cost for fabrication. Typically this might be no more than 5–10%
of the value of the raw material, the arrangement being analogous to
that of a toll-processing agreement.
Refiners may treat material on the basis of either a toll fee or an out-
right purchase. Contracts for purchase of scrap vary somewhat accord-
ing to the type of material involved. Arrangements for high-grade
material tend to be pretty standard, particularly in North America.
But the lower the grade and the more complex the material the less
standardised the arrangements become.
For high-grade material refiners typically pay for at least 99.5% of
the gold content, with a slightly lower credit for low-grade material.
Treatment charges and refining charges at the rate of up to $1.00/oz are
normally levied, and there will be a charge for refining any payable silver
present. Settlement periods of up to three weeks have been traditional,
though shorter periods are now frequently offered in what is an extreme-
ly competitive business.

2 Silver
Tony Warwick-Ching



Silver shares a number of distinctive properties with gold. It is flex-

ible and ductile, an excellent conductor of electrical current and heat,
and has a very high degree of reflectance. Though less durable than gold
it is resistant to corrosion, and can endure extreme temperature ranges
without deforming. Its colour and lustre make it prized for its beauty,
and since it is not particularly abundant in nature it has a high intrinsic
value compared with base metals. For this reason, as with gold, its recy-
cling is accorded a high priority by industrial and other users.
The single most important application for silver is in photographic

products, including colour and monochrome film and paper for use in
medical, industrial, art and personal photography. Silver demand suf-
fered badly during the 1980s as a result of the price boom set in train by
the Hunt brothers in 1979. High prices triggered a wave of thrifting and
substitution through alternative technologies. But in the 1990s offtake
was on a gently rising trend and after reaching a new all-time high in
1995 it has continued to edge higher. The surprisingly rapid growth of
offtake for other uses, however, has pushed the share of photography
down in recent years. Silver consumption by end-use is shown in
Table 2.1.
Industrial and decorative uses include a wide range of applications
for silver, both traditional and modern, and offtake grew strongly during
the 1990s. Demand rose from around 280 million ounces in 1990 to 335
million ounces in 1998. Silver is highly effective as an electrical con-
ductor, and is used for contacts, switches, conductors and fuses, and
in a number of applications for the electronics sector.
Electroplating solutions, batteries, brazing and soldering alloys,
industrial catalysts, mirrors and coatings, water purification systems
and bearings are the other main applications for silver in what is a very
diverse group of end-uses.
After a period in the 1980s when silver was somewhat neglected,
not least for price considerations, its time-honoured popularity in

Table 2.1 Silver consumption by end-use, 1990–98 (000 oz)
1990 1991 1992 1993 1994 1995 1996 1997 1998
Industrial & decorative 279.3 272.2 261 273.2 285 299.8 301.1 323.5 335.0
39.0% 38.5% 36.5% 35.0% 37.3% 38.7% 37.0% 37.5% 37.6%
Chapter 2 / page 2
Photographic 221.1 216.2 210.3 210 213.1 220.4 224.5 232.3 250.0
30.8% 30.6% 29.4% 26.9% 27.9% 28.5% 27.6% 26.9% 28.1%

Jewellery & silverware 184.2 189.5 209.9 257.1 223 230.2 266.1 280.2 280.0
25.7% 26.8% 29.4% 32.9% 29.2% 29.7% 32.7% 32.5% 31.5%
Coins & medals 32.1 29.2 33.4 40.6 43 23.8 22.3 27.4 25.0
4.5% 4.1% 4.7% 5.2% 5.6% 3.1% 2.7% 3.2% 2.8%
Total 716.7 707 714.6 780.9 764.1 774.2 814 863.4 890.0
Source: Silver Institute, Virtual Metals.

Silver
jewellery and silverware has re-emerged. In recent years offtake has

averaged over 250 million ounces a year, giving this area of end-use
around 30% of silver offtake.
The one area of end-use which looks to be in long-term decline is
coinage, which has dropped below 3% of total fabrication offtake.
Historically, being more plentiful and cheaper, silver was more widely
used for monetary purposes than gold. Although there are still minor
instances of its use in circulating coin, however, silver has, like gold,
been phased out of significant monetary use everywhere, and its main
application in this area is in commemorative and investment coin and
medals.
In contrast to gold, the recycling of silver involves relatively

little recovery by direct use of scrap in the manufacture of finished
articles. The sort of applications which generate scrap suitable for direct
use – jewellery, silverware and coin – are very much less important for
silver than they are for gold. The bulk of silver is nowadays used in in-
dustrial processes for the production of photographic and other manu-
factured articles. This yields both new and old scrap, which can only be
effectively recycled by operations capable of handling more complex
materials.
Such operations are performed by precious metals refiners. In a few
instances these are specific silver refiners, who will receive material
whose main economic value is silver, with other precious metals and
base metals such as copper taken out at the segregation and preparation
stages. Or more commonly they are refineries capable of recovering
both gold and silver in refined form, with silver reclaimed as an integral
stage in the gold refining chain.
The initial phase in silver refining requires the recovery of any gold
that is present, through either pyrometallurgical or hydrometallurgical
techniques. The silver is separated out and recovered in moderately
pure form. For most modern end-uses for silver further refining is
required, and the metal is upgraded by electrolysis to a much higher
degree of purity.
There are two main processes for the electrolytic refining of
silver. One is the Moebius process, using cells in which alternating

electrolytes of stainless steel and silver are suspended vertically

in an appropriate electrolyte. The other is the Thum–Balbach process,
where the cathodes are arranged horizontally. Both yield crystals of
99.9% silver which are then melted, granulated and cast into bars
meeting the quality and appearance criteria of the international bullion
market.
In the case of some complex materials, such as silver-bearing elec-
tronics and electrical scrap with significant copper content, the initial
recycling processes will be undertaken by a copper smelter/refiner, with
silver recovered as a by-product of the copper treatment circuit. Along
with other precious metals, the silver will be obtained in the form of
residues from the electrolytic tankhouse of the copper refinery. These
then follow the stages outlined above in order to recover the silver in the
form of high-purity marketable bars.
As with gold, silver is traded in many centres around the world.

However, only London, New York and Zurich have a real global influence
in setting the prices prevailing in the international market. The price
fixed each day in the London Bullion Market is the most widely quoted
reference for the valuation of silver bought and sold around the world.
Silver-dealing members of the LBMA agree to make a market in silver, to
hold stocks of metal of good delivery standard and to abide by the good
trading practices of the LBMA.
Although it is less formal and ritualised than is the case for gold,
there is a London fixing for silver each day and the price agreed at these
sessions constitutes the officially reported quotation for that day. Silver
is, nevertheless, traded on a continuous basis by telephone throughout
the day, and is also traded on futures exchanges in New York, Tokyo and
Chicago.
While the major bullion markets provide a pricing mechanism and
reference for silver for sale on both spot and forward bases, the bulk of
the refined metal sold each year passes direct from producer to con-
sumer. Major producers in North America, Latin America and Europe
ship large tonnages of bullion direct from their refineries to industrial
consumers, such as photo film manufacturers and electrical compo-

Silver
nent makers. The merchant market is a relatively small source of metal

for end-use consumption.
Silver has been mined, refined and used for thousands of years.
The total amount that now exists above ground in the form of refined
bullion and products still in use, and as discarded articles no longer
in use, is almost impossible to estimate. Since the amount of silver
that has been consumed over the course of the centuries is not known,
the extent to which it has been reclaimed from obsolete goods in the
past is equally difficult to estimate. Sources of silver supply are shown
in Table 2.2.
What is known is that a relatively high proportion of today’s silver
demand is met from recycled scrap, with around 160 million ounces of
silver reclaimed from scrap in 1998. The share of scrap in the overall sup-
ply of silver varies appreciably between one year and another, but it
appears to have been on a rising trend. While scrap provided just 15% of
supply at the beginning of the 1960s, in 1970 it accounted for 20% and
ran at around a third in the late 1970s. In 1980 it hit an all-time peak at
nearly half of total supply. More recently the importance of scrap has
dropped back somewhat, but even so it has typically amounted to over
a quarter of supply in the 1990s.
There are a number of reasons for the fluctuations in the volume
of silver recycled in different years. Price plays an important role in
prompting short-term variations, with price evoking a strong short-
term response from high-grade old scrap, such as silverware and jew-
ellery. The torrent of scrap that flowed on to the market in the 1979–80
price boom is an extreme example of such a response. Low prices help to
explain the dip in recycling in 1990–91. Silver scrap recovery and bullion
prices are shown in Table 2.3.
Cyclical changes in the economy and in manufacturing activity
also contribute to fluctuations in the generation of industrial scrap, such
as electronics components and commercial photographic materials.
Thus recession in the early 1990s may help to explain the low level
of recycling at the time. Government policies on coin remelt have also

Table 2.2 Sources of silver supply, 1960–98 (000 oz)
Scrap
Old Old Indian Total Other Total Mine Total Scrap
scrap coin scrap supply* secondary output supply share
Chapter 2 / page 6
1960 40.0 10.0 2.0 52.0 90.0 142.0 201.8 343.8 15.1%
1965 57.0 30.0 16.0 103.0 426.0 529.0 218.4 747.4 13.8%
1970 55.0 25.0 16.0 96.0 122.0 218.0 260.6 478.6 20.1%
1975 90.0 20.0 13.0 123.0 72.0 195.0 249.9 444.9 27.6%
1980 164.0 94.0 23.0 281.0 5.0 286.0 293.9 579.9 48.5%
1985 101.5 18.4 21.0 140.9 13.0 153.9 359.3 513.2 27.5%
1990 112.0 6.0 0.0 118.0 11.0 129.0 401.1 530.1 22.3%
1991 104.0 4.0 10.0 118.0 11.5 129.5 392.5 522.0 22.6%
1992 115.0 3.0 7.2 125.2 8.1 133.3 397.2 530.5 23.6%
1993 121.0 2.0 3.8 126.8 11.2 138.0 372.3 510.3 24.8%
1994 120.9 1.3 6.5 128.7 15.8 144.5 365.2 509.7 25.3%
1995 134.5 1.5 9.6 145.6 19.0 164.6 385.5 550.1 26.5%
1996 140.8 1.7 6.4 148.9 8.1 157.0 395.8 552.8 26.9%
1997 148.0 1.7 10.0 159.7 5.3 165.0 419.9 584.9 27.3%
1998 160.0 2.5 13.5 176.0 6.0 182.0 448.0 630.0 27.9%
* Mainly sales from government stocks.

Source: CPM Group Silver Survey.

Silver
Table 2.3 Silver scrap recovery and bullion prices, 1960–98

Old scrap Old coin Indian scrap Total Price
moz moz moz moz $/oz
1960 40.0 10.0 2.0 52.0 0.91

1965 57.0 30.0 16.0 103.0 1.29
1970 55.0 25.0 16.0 96.0 1.76
1975 90.0 20.0 13.0 123.0 4.54
1980 164.0 94.0 23.0 281.0 20.65
1985 101.5 18.4 21.0 140.9 6.15
1990 112.0 6.0 0.0 118.0 4.82
1991 104.0 4.0 9.6 117.6 4.03
1992 115.0 3.0 7.2 125.2 3.93
1993 121.0 2.0 3.8 126.8 4.30
1994 120.9 1.3 6.5 128.7 5.28
1995 134.5 1.5 9.6 145.6 5.20
1996 140.8 1.7 6.4 148.9 5.21
1997 148 1.7 10 159.7 4.91
1998 160 2.5 13.5 176.0 5.53
Source: CPM Group Silver Survey.
contributed to sharp variations in the volume of recycling, notably dur-

ing the 1960s and 1970s.
What form does silver scrap or silver-bearing scrap take? Much the
most important today is photographic materials – film, paper and
manufacturing and processing solutions. The photographic sector is
the largest single end-use application for silver, and it is a rich source of
both new and old silver-bearing scrap. Typically in North America, Japan
and Europe, photographic materials account for between two-thirds
and three-quarters of all recycled silver. The share accounted for by
photography reaches a particularly high level in the USA and a slightly
lower level in parts of Europe.
Silverware and jewellery account for about 10–15% of recycled sil-
ver in most industrialised countries, with the bulk of such material
deriving from old scrap of varying origins. The amounts of silver recy-
cled from this source vary considerably from one country to another
depending on the scale of manufacture and end-consumption in the
country concerned.

Comparable in significance is electronics scrap, derived from such

items as circuit boards, contacts, connectors, solders and adhesives.
The rapid growth of consumer and commercial electronics has ensured
that silver offtake (and hence recycling) in this area has remained
surprisingly resilient in the face of sustained efforts at thrifting and
substitution.
Other sources of silver scrap include plated and miscellaneous arti-
cles, industrial catalysts, alloys and other materials. A category which
was formerly a very important source of recycled silver is demonetised
coin. The quantity of silver reclaimed from coin averaged 25–30 million
ounces a year in the 1960s and 1970s, and peaked at a remarkable 94 mil-
lion ounces in 1980. Subsequently the volume of old coin melt has fallen
away dramatically. By the late 1980s it had dropped to less than 10 mil-
lion ounces a year, and by the mid-1990s it was averaging just 1–2 million
ounces a year.
There are no specific incentives for the recycling of silver-bearing

scrap, since the intrinsic value of the precious metals present
makes their recovery attractive enough already. There are, however,
growing restraints on the disposal of certain forms of low-grade indus-
trial waste containing silver suspensions or solutions which are regard-
ed as environmentally deleterious. Moreover, the processing of certain
types of other silver-containing material, such as old film and plastic-
based electronic equipment, is tightly controlled in the industrialised
countries.
The main stages in the recovery chain for secondary silver – collec-
tion, segregation, preparation, shipment and refining – are analogous to
those for gold, and indeed for most ferrous and non-ferrous metals.
There are, however, natural differences reflecting both end-use patterns
and the processing characteristics of silver.
In the case of high-grade new scrap and certain types of old scrap,
such as photographic and plating solutions, collection generally occurs
at the point of generation. In other cases, particularly where silver
is reclaimed from products discarded or dishoarded by end-use cus-
tomers, such as silverware and coin, merchants will be involved in col-
lecting and concentrating the material involved.

Silver
Segregation is either by merchants, particularly in the case of old

scrap, or by industrial users in the case of some forms of new scrap. The
same agent may also undertake the preparation of the material for final
processing. Preparation may involve incineration, chopping, crushing,
grinding and furnacing for purification and homogenisation. The mate-
rial will then be ready for sampling, assaying and refining by the pro-
cesses referred to earlier.
The geography of silver recycling corresponds closely to its pattern

of end-use and the location of recycling facilities. Thus the USA reclaims
the largest amount of silver, reflecting its status as the largest consumer
and its possession of a major refining industry. Total offtake in the USA
was around 170 million ounces in 1998 and scrap reclamation was
around 45 million ounces, with photographic materials accounting for
three-quarters of the total. The supply of silver from fabricated old silver
scrap is shown in Table 2.4 and US trade in silver scrap in Table 2.5.
Japan is the second largest consumer of silver for manufacturing
purposes, and possesses a significant recycling industry. Japanese silver
offtake was about 130 million ounces in 1998 and reclamation was about
28 million ounces. Europe had a consumption of about 210 million
ounces in the same year, and recycled 45 million ounces. The bulk of it
was processed in Germany, the UK and France, all of which have signifi-
cant refining capacity.
Outside the USA and Canada all silver-bearing materials, whether

primary or secondary, are valued on the basis of the London official
price. Within North America the price quoted by Handy & Harman,
a leading US refiner, has traditionally been used. Recoverable metal
content is estimated on the basis of assay, and charges deducted for
processing and refining the material. The actual level of charges varies
considerably, and may include other fees where appropriate. Since the
material from which silver is to be reclaimed may contain other valuable
metals, such as copper and gold, the valuation of a parcel of silver-

Table 2.4 Supply of silver from fabricated old silver scrap, 1990–97, moz
1990 1991 1992 1993 1994 1995 1996 1997
Europe 37.9 38.8 40.5 40.2 39.8 40.5 41.8 43.2

Germany 16.1 16.1 16.1 15.8 15.4 14.8 15.4 16.1
UK 7.2 7.2 7.2 7.3 7.9 7.4 7.6 8.4
France 3.1 3.8 5.3 4 4.2 4.7 4.5 4.3
Italy 2.7 2.7 2.7 2.7 2.8 3.2 3.5 3.4
Other 8.8 9 9.2 10.4 9.5 10.4 10.8 11
N America 42.7 40.5 40.1 41 43.2 44.8 47.3 47.5
USA 39.1 36.9 36.5 37.4 39.6 40.5 43.1 43.6
Mexico 2.3 2.3 2.3 2.3 2.3 2.6 2.4 2.3
Canada 1.3 1.3 1.3 1.3 1.3 1.7 1.8 1.6
C & S America 3.9 3.9 3.9 3.8 3.8 3.8 3.8 3.4
Middle East 3.1 3.1 3.3 4.2 5.3 6.5 6.9 6.4
India 4 9.7 7.2 4.5 3.9 4.5 4.7 4.9
E Asia 19.4 22.6 27.9 30 31 31.9 32.1 32.8
Japan 15.7 18.9 24.2 26.2 26.9 27.3 27.1 27.8
Other 3.7 3.7 3.7 3.8 4.1 4.6 5 5
Africa 1 1 1.1 1.1 1 1.2 1.1 1.1
Australia 2.3 2.3 2.3 2.4 2.5 2.5 2.3 2.3
Other 13.3 11.9 13.6 13.4 13.1 12 11.9 11.7
Total 127.6 133.8 139.9 140.6 143.6 147.7 151.9 153.3
Source: Silver Institute.
Table 2.5 US trade in silver scrap, tonnes

Imports Exports
1996 1810 1280

1997 1530 1020
1998 1800 1060
1999 1640 1310
Source: USGS.
bearing scrap is seen as a package in which the value of all the metals,
and the charges for their recovery, must be assessed.
The economics of recycling are not easy to cite. High-grade scrap,
such as silverware and coin, can be recycled at very low cost, perhaps no
more than 25 cents/ounce, and the efficiency with which the silver is
recovered from such sources is very high. Even low-purity scrap is eco-

Silver
nomic to process at low silver prices, however, with refiners claiming

that it would be possible to recycle many low-grade materials at silver
prices as low as $1/ounce. This ensures that the bulk of photographic
waste and scrap is indeed economic to recycle, making it easier for
industrial users of such material to comply with environmental regula-
tions by reprocessing it.

3 Platinum group metals
Tony Warwick-Ching



With prices in the hundreds or even thousands of dollars per ounce

in recent years, the platinum group metals (platinum, palladium,
rhodium, osmium, iridium and ruthenium) are very high-value ele-
ments, and are naturally the focus of keen interest from the point of
view of recycling. However, in volume terms only three of the group –
platinum itself, palladium and rhodium – are of significance, and this
section will concentrate on these metals.
The platinum group metals (pgm) share a number of characteris-

tics both with each other and with the other precious metals – gold and
silver. Good conductors of electricity, chemically inert and with excep-
tional catalytic properties they are sometimes designated the ‘noble’
metals. Thus they find end-uses in electrical and electronic applications
where resistance to oxidation and durability are at a premium, and in
industrial and other processes where strong catalytic activity is
required.
A lustrous silvery appearance, coupled with outstanding tarnish

resistance, has given platinum an important place in the jewellery
industry. Platinum jewellery had a brief period of popularity in Europe
between the wars, and there is now growing interest in China, but by far
the most significant market continues to be Japan, which accounts for
over three-quarters of the world market. Japanese consumers feel a tra-
ditional affinity for the unostentatious but costly appearance of
jewellery made from platinum. Palladium is also used in jewellery,
although on a much smaller scale than is the case with platinum, and
rhodium finds a minor role in this sector. Consumption of platinum by
end-use is shown in Table 3.1.
Platinum’s end-uses have become heavily concentrated in recent
years. Jewellery accounts for around 40% of recorded offtake, autocata-
lyst has slipped back a little in recent years but is still a third of offtake,
and the balance goes to a mix of other applications. Traditional uses

Table 3.1 Consumption of platinum, by end-use, 1975–99 (000 oz)

1975 1980 1985 1990 1995 1996 1997 1998 1999
Autocatalyst 360 690 980 1535 1850 1880 1830 1800 1610
Chemical 345 260 225 215 215 230 235 280 315
Electrical 225 210 200 205 240 275 305 300 390
Glass, etc 65 140 140 135 225 255 265 220 200
Coin, small bars, etc 0 0 260 100 75 110 180 210 90
Jewellery 1210 560 810 1365 1810 1990 2160 2430 2880
Oil refining 175 150 15 140 120 185 170 125 115
Other 205 190 100 120 225 255 295 305 335
Total 2585 2200 2730 3815 4760 5180 5440 5670 5935
Source: Johnson Matthey.
Table 3.2 Consumption of palladium, by end-use, 1980–99 (000 oz)

1980 1985 1990 1995 1996 1997 1998 1999
Autocatalyst 320 320 315 1800 2360 3200 4890 5880

Chemical 250 150 215 210 240 240 230 240
Dentistry 520 870 1020 1290 1320 1350 1230 1110
Electrical 590 1100 1675 2620 2020 2550 2075 1970
Jewellery 180 210 195 200 215 260 235 255
Other 190 120 80 110 140 140 115 110
Total 2050 2770 3500 6230 6295 7740 8775 9565
include catalytic products for the chemical industry (particularly nitric

acid manufacture), oil refining, fibre-glass production and electronics.
In all of these areas platinum offtake has tended to stagnate or decline
over the longer term. Other applications include investor products such
as small bars and coins, and fuel cells for specialist or experimental uses.
Palladium demand is slightly more diverse, with important applications
in electrical, dental and other uses, and an increasingly significant role
in autocatalyst. Electrical and electronic applications accounted for 2.36
million ounces in 1998, just over 28% of total offtake, with booming sales
of mobile phones and other devices offsetting the impact of high prices
for the metal. The consumption of palladium by end-use is shown in
Table 3.2.
After dropping to less than 10% of consumption in the late 1980s,
autocatalyst applications for palladium grew very rapidly during the

Platinum group metals
Table 3.3 Consumption of rhodium, by end-use, 1985–99 (000 oz)

1985 1990 1995 1996 1997 1998 1999
Autocatalyst 135 334 464 424 418 483 502

Chemical 45 26 13 21 36 31 37
Electrical 17 12 8 9 9 6 6
Glass 17 17 17 53 43 34 30
Other 30 15 9 9 10 10 11
Total 244 404 511 516 516 564 586
1990s and accounted for half of all offtake in 1998. Dentistry has slipped
back in importance as a user of palladium, but still took just over 1.2
million ounces in 1998, nearly 15% of the total. Jewellery and other
applications account for around 4–5% of the total.
For rhodium the autocatalyst sector has become much the most
important area of end-use in recent years. At 450000 ounces, the
motor industry accounted for 84% of total consumption in 1998.
Catalytic applications in the chemical and fibre-glass industries also
require minor amounts of rhodium, and small quantities are used in
electronics applications. Table 3.3 shows the consumption of rhodium
by end-use.
The major role of autocatalyst as an end-use for the platinum
group metals owes a huge debt to the environmental imperatives of the
past two decades. Prior to the mid-1970s the motor industry did not
feature at all as a customer for these metals. Thanks to new exhaust
emission control standards, however, the first catalytic converters were
installed in US cars in the 1975 model year. Japan soon followed suit and
so, more recently, have Western Europe, Australasia, Korea and other
markets.
The result has been sustained growth in offtake for autocatalyst.
Platinum consumption rose from 360000 ounces in 1975 to 1.85 million
ounces 20 years later. Palladium consumption has soared from 320000
ounces in 1980 to around 4.2 million ounces in 1998, while rhodium
consumption rose from 110000 ounces in 1984 to a peak of 464000
ounces in the mid-1990s. Partly because of market saturation and partly
because of substitution by palladium, platinum demand stopped grow-
ing in the mid-1990s, but a subsequent boom in palladium prices has
prompted efforts to substitute away from that metal again.

The recycling of the platinum group metals is even more spe-

cialised than is the case for the other precious metals, and the number of
plants which can undertake all the necessary processes is very limited.
Both pyrometallurgy and hydrometallurgy play a role, but the latter per-
forms most of the refining function. The processes employed by refiners
are complex, and turnaround times, particularly for the minor pgm, are
extremely long – a matter of months rather than weeks, during which the
metals are locked up in solutions being treated for sequential recovery of
various elements.
The traditional route to refining platinum group metals from scrap
involves delivering the material to be recycled as concentrate or in other
forms which can then be leached for recovery of the metals in solution.
This is then treated by chemical separation for recovery of the precious
metals present. Gold is reclaimed first, followed by silver and then by the
noble metals, starting with platinum and working through to the minor
members of the pgm group.
Recent years have seen the adoption of modern solvent extrac-
tion/electrowinning methods to the recovery of pgm from both primary
and secondary material. Johnson Matthey pioneered such approaches
on a pilot scale at its plant in Royston, UK, then transferred the process to
the Matthey Rustenburg operation in South Africa. Metal recoveries
from modern solvent extraction/electrowinning methods are reported
by Johnson Matthey to run at 90–95% for platinum and palladium, and
80% for rhodium.
The only pgm markets of significance are those for platinum and
palladium, the other noble metals being produced and consumed on
such a small scale that most dealings are direct between producer and
consumer, and merchants play a very minor role. The markets for
platinum and palladium have characteristics in common with the other
precious metals, but trading is on a much smaller scale and the markets
are much narrower.
Nevertheless, there are terminal markets for platinum and pal-
ladium in New York, where both are traded on the Nymex division of

Comex, and in Tokyo, where there are contracts for both metals on
Tocom. London, Zurich, New York and Tokyo are the only locations for
significant merchant dealing in platinum and palladium, and an official
fixing for both metals is quoted daily in London and Zurich.
In all these cases the metal is traded in the form of refined high-
purity bars which conform to certain specified characteristics. However,
there is also a merchant market for platinum in the form in which it is
recovered after refining – as sponge.
The main reference prices for most purposes are the quotations
settled for platinum and palladium at the London fixing. In the past
some of the bigger long-term contracts for the supply of platinum and
palladium direct from producer to consumer (for example, the big US
car companies) involved ‘producer prices’, which were fixed for a period
by the supplier. These are believed to have been largely replaced by con-
tracts priced on the basis of the spot quotation. A producer price is also
set for rhodium, though certain market makers in bullion are normally
ready to quote a merchant price for rhodium. The other pgm are typi-
cally sold on the basis of producer prices set by the leading suppliers
such as Johnson Matthey.
In contrast to the position with the other precious metals, overall

levels of recycling of the platinum group metals appear to be low. They
range from 8.6% for rhodium in 1998 to 7.5% for platinum and just 2.2%
for palladium. In part the low levels of recycling are a reflection of the way
the statistics published by Johnson Matthey, the only routine source of
comprehensive data on supply and demand for the pgm, are presented.
Table 3.4 shows the platinum group metals supply from recycled scrap.
Except for autocatalyst, all the Johnson Matthey figures record con-
sumption net of recycling – in other words they show net offtake of pgm.
The data in the accompanying table are derived from Johnson Matthey
figures and show the reclamation of metal from just one source, auto-
catalyst. Recycling from other end-uses is ignored.
Other traditional applications, particularly industrial catalysts
used in the oil, chemical and glass industries, are recycled on a toll basis,

Table 3.4 Platinum group metals supply from recycled scrap, 1980–99
Platinum Palladium Rhodium
Total Share of Total Share of Total Share of
000 oz supply % 000 oz supply % 000 oz supply %
1980 0 0.0 20 0.8 0 0

1981 0 0.0 20 0.8 0 0
1982 10 0.4 20 0.8 0 0
1983 30 1.2 20 0.8 0 0
1984 45 1.6 20 0.7 0 0
1985 70 2.5 30 1.1 0 0
1986 90 3.1 40 1.4 0 0
1987 115 3.6 50 1.6 3 0.9
1988 160 4.7 65 1.9 7 2.2
1989 175 4.9 70 2.1 7 2.1
1990 210 5.3 85 2.3 13 3.4
1991 205 4.7 85 2.1 16 4.4
1992 230 5.7 95 2.4 22 5.5
1993 255 5.5 100 2.3 25 6.2
1994 290 6.0 105 1.9 34 7.4
1995 320 6.0 110 1.7 37 7.8
1996 350 6.6 145 1.8 45 8.6
1997 370 6.9 145 2.0 48 7.1
1998 405 7.0 175 2.0 57 9.7
1999 425 7.3 195 2.4 66 11.6
collection and processing are efficient, and the reclamation rate is very
high. The catalytic units from such industrial operations are processed
by specialist refiners for recovery of the pgm present and the end-user
pays for top-up replacement metal supplied by the refiner.
Low levels of recycling do, however, partly reflect a reality of the
pgm market, particularly that for platinum. This is the strong growth
in dispersive uses of pgm, notably autocatalyst, since the 1970s.
Predictions made in the early 1980s pointed to huge volumes of pgm
coming back from the car industry as spent catalyst by the early 1990s. In
the event, in comparison with the amount of metal that has gone into
this end-use the volume of recycling is still relatively modest.
The figures for recycling indicate just how far there is now to go.
Out of a total autocatalyst offtake of over 28 million ounces of platinum,
little over 3.3 million ounces (less than 12%) had been recovered by
1998. For palladium the figures are 17.36 million ounces for consump-
tion and less than 1.4 million ounces for recycling, though the slow

growth of palladium in this application until the 1990s implies a lower

turnround of metal from products that have reached the end of
their useful life. Rhodium had a recovery of just 303000 ounces out of a
total autocatalyst use of nearly 4.6 million ounces between 1984 and
1998. Autocatalyst recycling rates for platinum group metals are shown
in Table 3.5.
The future of recycling in the pgm field now depends very largely on
what happens in the autocatalyst sector, since other areas of end-use
have long-established and effective recycling routes. While the major
refiners maintain research and development programmes aimed at
facilitating the direct processing of converters, the cost of final refining
seems unlikely to be cut dramatically, and better recycling rates may
have to depend on improvements in collection and preliminary
processing.
Clearly the volume of pgm recovered each year should rise as the
amount in end-use grows with the car population, but whether the pro-
portion reclaimed will increase from the low levels seen so far remains to
be seen. Partly because of concern over the prospects for supply from
Russia, the world’s largest producer, palladium prices have been at
much higher levels than in the past, and this should stimulate higher
recycling rates for both palladium and other pgm with which it is used in
autocatalyst and other applications.
Pgm scrap can take a number of forms, including investment

bars, coins, catalytic converters, electronic components, reaction ves-
sels, industrial catalyst and old jewellery. Much the most interest
attaches to autocatalyst, since this is both the fastest area of growth and
the one with the most potential.
Pgm autocatalyst is used in formulations which may include
platinum alone, or combinations of all three main pgm. The chosen
metals are deposited on a ceramic substrate, the unit being enclosed
within a steel casing and attached to the vehicle as the catalytic con-
verter. Depending on the extent to which reclamation has been carried
out, the autocalyst may reach a refiner as a whole converter, or as
stripped substrate or as crushed substrate ready for pyrometallurgical
and hydrometallurgical processing.

Table 3.5 Autocatalyst recycling rates for platinum group metals, 1980–98
Platinum Palladium Rhodium
Autocatalyst Autocatalyst Recycle Autocatalyst Autocatalyst Recycle Autocatalyst Autocatalyst Recycle
in use 000 oz recycled 000 oz ratio % in use 000 oz recycled 000 oz ratio % in use 000 oz recycled 000 oz ratio %
Chapter 3 / page 8
1980 3540 0 0 320 20 6.3 0 0 0
1981 4180 0 0 610 40 6.6 0 0 0

1982 4835 10 0.2 920 60 6.5 0 0 0
1983 5480 40 0.7 1240 80 6.5 0 0 0
1984 6320 85 1.3 1580 100 6.3 110 0 0
1985 7300 155 2.1 1900 130 6.8 245 0 0
1986 8440 245 2.9 2165 170 7.9 433 0 0
1987 9695 360 3.7 2435 220 9.0 659 3 0.5
1988 11010 520 4.7 2695 285 10.6 891 10 1.1
1989 12465 695 5.6 2960 355 12.0 1155 17 1.5
1990 14000 905 6.5 3275 440 13.4 1489 30 2.0
1991 15565 1110 7.1 3630 525 14.5 1790 46 2.6
1992 17115 1340 7.8 4120 620 15.0 2095 68 3.2
1993 18800 1595 8.5 4825 720 14.9 2451 93 3.8
1994 20670 1885 9.1 5800 825 14.2 2830 127 4.5
1995 22520 2205 9.8 7600 935 12.3 3294 164 5.0
1996 24400 2555 10.5 9960 1080 10.8 3718 209 5.6
1997 26270 2925 11.1 13160 1225 9.3 4135 257 6.2
1998 28070 3335 11.9 17360 1385 8.0 4585 303 6.6
Source: Johnson Matthey, Virtual Metals.

Apart from environmental regulations which apply to all metallur-

gical processing activity, there is little specific incentive for or restraint
on the recycling of the pgm. Different grades and types of material con-
taining scrap pgm follow different roads on the recycling route, stopping
at various different agencies before reaching the final destination.
High-grade materials, such as investment bars, jewellery and
chemical reaction vessels often report to the final refinery where they
will be converted back into high-purity products suitable for sale
directly into the metal markets. Recoveries are typically very high indeed
for such materials, and process losses will be minimal.
Industrial catalysts also follow a short and well-defined route, usu-
ally being returned direct from petroleum refineries, chemical plants
and fibre-glass makers and other industrial units on a toll basis, with the
refiner simply taking a fee for return of the metal reclaimed and returned
to the user. Recovery rates are pretty high here, ranging from 85% for
chemical and pharmaceutical plants to upwards of 95% for oil refineries.
Pgm used in electronic applications tend to follow a similar route to
that taken by gold and silver, reporting along with other precious metals
to copper smelters. There they pass right through the smelting and refin-
ing processes and are recovered in the form of tank-house residues such
as anode slimes and sludges. These are collected from time to time and
sold to specialist final refiners of precious metals.
Autocatalyst is a very different matter. Here the problem is essen-
tially one of dispersion and the costs incurred in collecting and concen-
trating what is, in its unprocessed form, a material with a relatively low
value-to-weight ratio. In many countries – notably the USA – the used
end-product, the catalytic converter, is scattered almost as widely as the
vehicle repair shops which replace worn-out units and the scrap yards
where discarded vehicles end their days. Between these and the end of
the recycling chain are a number of points and processes. The recovery
of platinum from autocatalyst by region is shown in Table 3.6 and the
recovery of palladium is shown in Table 3.7.
First comes the dismantling of the vehicle at the scrap yard or the
storing of the converter at the repair shop. The converters are then gath-
ered up by collectors, who cover a particular geographical area and
deliver the units to specialist processors. The specialist processor
removes the converter from its housing – ‘decanning’ the ceramic sub-

Table 3.6 Recovery of platinum from autocatalyst, by region (000 oz)

Europe Japan N America Other Total
1986 0 5 85 0 90
1987 0 15 100 0 115
1988 0 25 135 0 160
1989 0 25 150 0 175
1990 0 35 175 0 210
1991 5 35 165 0 205
1992 5 45 180 0 230
1993 5 50 200 0 255
1994 10 45 230 5 290
1995 15 40 260 5 320
1996 20 50 275 5 350
1997 25 50 290 5 370
1998 30 55 310 10 405
1999 30 60 320 15 425
Table 3.7 Recovery of palladium from autocatalyst, by

region (000 oz)
Europe Japan N America Total
1986 0 10 30 40
1987 0 10 40 50
1988 0 15 50 65
1989 0 15 55 70
1990 0 25 60 85
1991 0 30 55 85
1992 0 35 60 95
1993 0 30 70 100
1994 0 30 75 105
1995 0 25 85 110
1996 5 30 110 145
1997 5 45 105 155
1998 5 50 115 175
1999 15 55 125 195
strate carrying the pgm – and then ships the compacted material to spe-
cialist processors or direct to a final refiner.
Specialist processors are very few in number, the whole of the USA
having just a couple of plants, of which the pioneering venture estab-
lished by Texasgulf at Anniston, Alabama, is perhaps the best known.
Such operations typically subject the pgm-bearing material to some
type of furnace operation from which a high-pgm residue is obtained.

Table 3.8 US trade in PGM scrap, kg

Imports Exports
1994 3220 42100

1995 6350 8150
1996 5060 8640
1997 5310 12900
1998 5390 19700
1999* 19700 7660
Source: USGS.
* Platinum.
This is then sold on to final refiners such as Johnson Matthey, Degussa,

Engelhard and Inco.
North America is much the most important centre for the recycling
of pgm, accounting for three-quarters of the recovery of both platinum
and palladium and the great bulk of rhodium reclaimed each year (see
Table 3.8). Relatively modest amounts of pgm are recovered from old
scrap in Japan and in Europe.
International trade in pgm scrap reflects both the limited availabil-
ity of recycling facilities and the narrow spread of end-markets for pgm.
Countries such as the UK, Germany, Belgium and Switzerland tend to be
net importers of pgm scrap, while most other industrialised countries
are exporters. The USA ships appreciable amounts of pgm scrap to
Japan.
As with other precious metals, pgm scrap is typically priced on the

basis of the assayed metal content, less a refining fee. Sometimes other
charges may be incurred, depending on the nature of the material and
the form in which it is to be recovered.

1 Plastics
John Murphy


1.2.1 Raw materials and forms
1.2.2 Moulding
1.2.3 Extrusion

1.3.2 Commodity plastics
1.3.3 A worldwide overview
1.3.4 Engineering plastics
1.3.5 High-performance plastics

1.4.1 Mechanical recycling
1.4.2 Feedstock recycling
1.4.3 Waste to energy recovery
1.4.5 Government intervention
1.4.6 Trade in scrap and scrap pricing arrangements

The term ‘plastics’ covers a heterogeneous range of mainly organic

materials with a wide variety of properties and characteristics. Most
are used in solid form, as powders or granules, but a few are produced as
liquids.
Essentially, plastics fall into two classes: thermoplastics (which
soften on every application of heat) and thermosets (which soften once
only and then form infusible solids). This dictates the method of pro-
cessing, and also has a direct influence on the ease with which they can
be recycled, using reprocessing methods. The thermoplastics make up
more than two-thirds of plastics production and consumption. The
main thermoplastics are the polyolefins (such as polyethylene and
polypropylene), polystyrene, polyvinyl chloride, acrylics, acrylonitrile
butadiene styrene (ABS), polyamides, polyacetals, polycarbonates and
polysulphones. Thermoplastic versions of synthetic rubbers are grow-
ing in significance.
The main thermosetting plastics are phenolic and epoxy resins,
urea-formaldehyde resins, silicones, cross-linked polyesters and most
polyurethanes. Since thermosets undergo a permanent chemical
change under the heat and pressure of moulding, they present a chal-
lenge for recycling, but several options have been developed.
The choice of the appropriate type of plastic for a specific applica-
tion depends on the optimal cost/performance. The basic characteris-
tics of plastics are:
Generally good Generally poor

Weight: low specific gravity (usually Mechanical: relatively low stiffness,
lower than water); fatigue and cold flow;
Mechanical: impact and tensile Thermal relatively low softening
strength, flexibility, properties: temperatures (effectively
shear strength and around 60–150 °C),
tear resistance; except for thermoset-
ting plastics;
Electrical: high resistance to electric Flammability: most plastics are inherently
current; flammable;
Chemical: very wide chemical resistance; Weathering: most plastics are susceptible
to oxidation by ultraviolet
(sunlight) and are able to

Part 3: Other materials
Barrier generally good resistance retain properties after long

properties: to the passage of moisture, exposure to weather.
gases, oils and greases;
Optical: high transparency (depending
on type);
Surface and capability of accepting
appearance: decorating by self-colouring
(with pigment or dyestuff ),
surface texture, surface
printing, painting or
electroplating;
Mouldability: generally good ‘flow’ properties,
giving the possibility of
moulding complex parts
(depending on process) in
very large numbers, to high
precision.
All of the above ‘generally poor’ properties can be substantially cor-

rected by the use of additives and reinforcements (which can also boost
the ‘generally good’ properties). There is considerable development of
co- and terpolymers (‘alloying’ or polymerisation of two or three
polymers together), to enhance performance.
Almost all plastics, therefore, come to the processing stage
as compounds, in which the plastic often acts largely as a matrix, allow-
ing the valuable properties of other materials to be harnessed. Additives
used in plastics compounds include pigments or other colourants, heat-
and UV-stabilisers, flame retardants, plasticisers, lubricants and
processing aids. Fillers and reinforcements such as glass, carbon and
other fibres and minerals, such as calcium carbonate, talc and mica,
are also used.
Applications of plastics are almost endless, ranging from short-life
plastics packaging to long-life building materials, lightweight replace-
ment of metal automobile parts to high-purity medical/surgical prod-
ucts and high-performance structures in engineering, aerospace and
defence applications. Such heterogeneity and wide performance para-
meters highlight a major advantage of plastics – their ability to conform
to a wide range of design specifications. However, such variety also
poses a challenge for recyclers, as outlined below.
There are few manufacturing sectors which do not use plastics to

some degree. Packaging is the dominant end-use in most industrialised

Plastics
countries, usually accounting for upwards of 30% of total consumption,

and this has been the main focus for most plastics recycling initiatives.
Plastics are particularly suitable for packaging applications because
they are light in weight, but can provide long-lasting protection to prod-
ucts, especially foodstuffs and beverages. They are hygienic and there
are many specific grades universally approved for use in contact with
foodstuffs. Compared with traditional packaging materials they are also
highly versatile, offering good appearance, gloss, colouring and trans-
parency, in many different forms of package. They are also well suited to
high-performance applications such as microwave, frozen and modi-
fied atmosphere packaging.
Construction is the second biggest outlet for plastics, accoun-
ting for about 20% of total consumption. In this industry plastics
offer users a wide range of products that reduce on-site costs for
finishing, installation and labour as a result of pre-fabrication and a
high strength-to-weight ratio. Durability, low maintenance costs
through self-colouring and excellent resistance to moisture and
corrosion are other advantages. Specific building products include
pipes, fittings and conduits; panels and sidings; doors, windows
and temporary glazing; flooring and membranes. Reinforced plastics
have increasing uses in civil engineering, and in the enhancement
of the performance of bitumen in road building. Given the longevity
of most construction uses and the fact that plastics have only been
used on a large scale in building since about the 1960s, the const-
ruction industry is only now beginning to generate significant amounts
of plastics material for recycling. Special attention to recycling may
be required because the first generation of PVC building products
(such as rainwater goods and window frames) used additives and sta-
bilisers, including cadmium and lead, which have since been phased
out of use. However the construction industry itself could become a
major outlet for recycled plastics. Potential applications include
wall- and roof-lining materials; under-floor and ceiling ven-
tilation panels; partitions; foundation packing; posts and stakes; con-
struction and tree supports; soil stoppers; outdoor furniture; fences;
sign boards, etc.
Transport and electrical/electronic applications vie for third
place in the ‘league table’ of plastics end-uses. In the transport sector,
the largest use is in automobiles, for interior furnishing and trim
and lightweight engineering components, which provide comfort,
safety and efficiency, while reducing overall weight. Applications, espe-

cially of reinforced structural plastics, are also increasing in railways, air-

craft and shipping, and for much the same reasons, of safety and
efficiency, at lower weight, so economising on fuel and energy. In
the electrical/electronics sector, most of modern technology depends
on the use of high-performance plastics, while considerable quantities
of medium-performance plastics are moulded into housings for
equipment, particularly in the consumer and business sectors.
Recycling is being introduced into both the automotive and
electrical/electronics sectors, and it can be expected that manufacturers
will respond by redesigning products and rationalising materials, to
facilitate recycling.
Other end-uses for plastics include furniture, agriculture, toys,
leisure, housewares, clothing, mechanical engineering and medical
equipment. Specific recycling measures are being introduced to deal
with agricultural plastics (mainly film, sheet and bags) and medical
products that necessarily must be used only once.
1.2.1 Raw materials and forms
Although plastics can be made from a variety of raw materials

(including vegetable and other biological products), crude oil and
natural gas at present provide the basic raw material from which the
chemical industry derives the basic ‘building blocks’ for manu-
facturing plastics – the olefins (ethylene, propylene, butadiene
and the C5 olefins) and the aromatics (benzene, toluene and
styrene). These feedstocks are transformed into plastic materials in
large petrochemicals complexes, if possible sited close to oil or gas
sources.
A plastic, or polymer, is a long-chain molecule containing
thousands of smaller repeated molecular units, or monomers.
Polymerisation is a complex process but broadly speaking follows one of
two routes. Addition polymers are formed by linking the monomers
together in a long chain, in the presence of a catalyst. Examples of addi-
tion polymers are polypropylene and polyethylene. Condensation poly-
mers are formed by the reaction of two different molecules. As the
polymer chain grows, a small molecule, usually of water, is formed with

Plastics
each link. The elimination of these water molecules completes the poly-
merisation process. Polyethylene terephthalate (PET) and all thermo-
sets are condensation polymers.
The choice of technology used for processing (moulding) plastics
depends on whether the material is thermoplastic or thermoset, and on
the type of end-product required. Plastics processing techniques fall
into two broad categories: moulding (for 3-dimensional parts) and
extrusion (for 2-dimensional, unlimited length products).
1.2.2 Moulding
In moulding, the plastic is formed by heat and pressure into the

shape of a mould. Each grade of plastic has its own optimum moulding
conditions of temperature and pressure, which are well documented,
and are increasingly computerised.
For thermosetting plastics, there is essentially only one moulding
technique: compression moulding. The plastics moulding compound,
which may be pre-heated, is placed in a heated metal mould where, as it
heats up, it begins to ‘flow’. The mould is closed, pressing the softened
material to the shape of the mould, and the plastic sets or ‘cures’. The
moulded part is then removed, hot, from the mould.
Variations on this process aim to improve the efficiency with which
the charge of material can be introduced into the moulding press,
within the limitations imposed by the chemical reaction that occurs
with heat.
Other, specialised, techniques are used for moulding fibre-
reinforced liquid thermosetting resins, such as unsaturated polyesters
and epoxies. These range from open-mould contact moulding to press
moulding between matched metal dies.
Reaction moulding (RIM) is used for moulding polyurethanes,
which are thermosets but in the form of two liquids that react rapidly
when mixed, to form a solid material. The liquid components are com-
bined, and reinforcement and additives introduced in a special mixing
head, and the mix is immediately injected into a closed mould. The com-
ponents react, generating heat and solidify, and the part is demoulded.
A similar method is used for moulding 3-dimensional products (such as
automobile seating) in flexible polyurethane foam, often employing a
number of moulds on a rotating ‘carousel’.

For thermoplastics, there is more flexibility in the range of mould-

ing processes available:
Injection moulding: the plastics compound is heated (plasticised)

in the barrel of the moulding machine, usually with the aid
of an Archimedes screw, until it flows. The melt is then injected
at high pressure into a closed temperature-controlled mould,
where it is cooled. When the moulded part is solid enough to be
removed, the mould is opened and the finished article is
extracted, often by robot. In terms of numbers of machines,
this is by far the most widely-used method for processing
plastics.
Blow moulding: a tube (parison) of molten plastic is extruded,
usually downwards, into an open mould. The mould is closed
and compressed air or steam is used to blow the plastic into the
form of the mould. This method is used for the production of
hollow items such as bottles and containers of many different
sizes, and automobile fuel tanks.
Rotational moulding (rotomoulding): the polymer, in powder
form, is loaded into a simple hollow-heated mould, which is
then closed and rotated on more than one axis, spreading the
powder evenly over the hot inside wall, where it fuses. Rotation
continues until the desired thickness has been built up, when
the mould is cooled and the polymer sets, allowing the part to
be removed. Large hollow objects, such as footballs, oil
containers, playground items and roadside equipment, can be
produced using this technique.
1.2.3 Extrusion
Extrusion (also for thermoplastics) produces a variety of shapes,

such as pipe, tubing, rods, sheet and film and complex profiles.
It involves plasticising a polymer compound in a long heated
machine barrel with one or two screws, and continuously
forcing the melt through a die to produce the desired final
shape, and finally cooling under controlled conditions to
maintain the desired shape. Depending on the type of product
required, extrusion can take many forms, as follows.
Sheet extrusion involves passing the product through a sheet die

Plastics
and between rollers to control thickness and to apply a desired

surface. Wire extrusion passes copper or aluminium wire
through the die and sheathes them with plastic insulation. Film
extrusion uses either sheet extrusion followed by stretching or
tentering, or the blown-film process. In this technique, the film
is extruded upwards in a tower as a large-diameter tube, which
is then blown, stretching the film to the required thickness and
then collapsing the ‘bubble’ at the top of the tower and slitting it
into flat film.
Co-extrusion combines the output from more than one extruder
into a single die to produce films, sheets or profiles made up
of layers of two or more polymers. This is used to apply barrier
layers to packaging film, or to combine plastics of different
characteristics in products such as automobile window seals.
Calendering is a process used mainly for processing PVC into sheet
or film. The molten compound is loaded into a stack of rollers
which progressively reduce the thickness until the required
sheet or film is reached. As a final stage, the sheet or film can be
passed through polishing or embossing rollers.
There are also analogous processes for production of similar
shapes in fibre-reinforced thermosetting plastics, such as
centrifugal casting, filament winding and continuous sheet
lamination processes.
Historically, the plastics industry has been located in the advanced

industrialised countries, which account for over two-thirds of plastics
consumption. Production of plastics raw materials is dominated
by multinational chemical companies and by major oil and gas com-
panies whose primary business gives them access to secure supplies
of feedstock. Moulding and processing of plastics materials, however,
is carried out by thousands of companies ranging from very large to
very small.
Recent years have seen an expansion of plastics production
capacity in the Asia/Pacific region, Latin America and the Middle East,

where there has been strong growth in the domestic economy and in
exports. The dominance of the industrialised countries is consequently
giving way gradually to a more balanced global pattern, but a significant
feature is the emergence of a relatively small number of multinational
producers who dominate the world market.
Something of the same pattern is emerging at the processing level,
where a number of large processors have become global, either in their
own right or in partnership with other regional companies. This is hap-
pening particularly in the packaging sector, and in automotive compo-
nents and medical products, as key suppliers of plastics products follow
their existing clients as they invest around the world.
1.3.2 Commodity plastics
The market for plastics materials is dominated by the so-called

‘commodity’ plastics (the thermoplastics – polyethylene, polypropy-
lene, polystyrene and polyvinyl chloride), which account for well over
70% of all plastics produced. These are predominantly used, as film,
sheet, mouldings and pipe and tube, and as extruded profiles, in packag-
ing, building products and agricultural applications. Commodity ther-
moplastics are low price/high volume products, the prices of which tend
to respond quickly to changes in supply and demand conditions, though
they are not yet actually traded as other commodities. The large volumes
of commodity plastics would appear to be enough to generate sufficient
amounts of material to render collection and recycling schemes poten-
tially viable, but the fact that they are used so universally (and are so light
in weight compared with their volume) means that there are relatively
few locations where there are sufficiently large concentrations of waste
to permit collection and transport at an economic price. Moreover, the
low market prices of commodity thermoplastics set a very low threshold
for recyclers to compete with virgin resins, while their fluctuations in
price make it difficult to establish continuity of a recycling operation. As
recent experience with world market prices for wood pulp and glass has
shown, this is not a phenomenon peculiar to recycling of plastics.
Also arguably a commodity plastic is bottle-grade PET, which is
a technically advanced material, but produced in increasingly large
quantities worldwide, and with prices beginning to act in a similar
way to a commodity. PET is used for a wide range of beverage containers,

Plastics
and a special recycling system is developing in parallel with market

growth.
1.3.3 A worldwide overview
Depending on how one defines ‘recycling’, possibly as little as 10%

of plastics consumption is at present recycled as a specific process. The
vast majority is simply dumped. In the industrialised countries, esti-
mates range from 10% to 30%, and this is due to increase to around 50%,
as legislation begins to ‘bite’.
World production of plastics is expected to total about 120 million
tonnes, and is growing at about 5% per year. Growth is strongest in the
developing countries, where it will shift the overall dominance from the
West to the East – and will bring in some serious problems on the recy-
cling front. Table 1.1 shows regional production and consumption of
thermoplastics.
Table 1.1 Regional production and consumption of thermoplastics – 1996–2000

(% of total)
1996 2000 Aagr % 1996 2000 Aagr %
Western 25.0 22.69 2.27 24.70 23.63 3.7

Europe
Eastern 3.05 3.01 4.5 2.46 2.47 4.9
Europe
CIS 2.42 2.9 9.63 1.97 1.92 4.2
United States 26.3 24.01 2.44 23.87 23.02 3.9
Canada 3.2 2.7 0.49 2.58 2.53 4.3
Latin 5.44 5.42 4.73 6.01 6.32 6.2
America
Middle East 2.91 4.36 16.01 2.08 1.96 3.3
Africa 1.23 1.49 10.12 1.75 1.84 6.3
Japan 9.65 8.53 1.6 9.04 8.33 2.7
Eastern 14.53 16.17 7.65 17.22 19.06 7.6
Asia(a)
Asia/Pacific(b) 6.27 8.72 13.82 8.32 8.92 6.7
Total 100.00 100.00 4.81 100.00 100.00 4.9
Notes:
(a) China, Hong Kong, Korea and Taiwan.
(b) Australia, Bangladesh, India, Indonesia, Malaysia and New Zealand.
Source: Enichem/Parpinelli.

Table 1.2 World production and consumption of thermoplastics – by type

1996–2000 (‘000 tonnes)
1996 2000 Aagr % 1996 2000 Aagr %
Polyethylene – 15015 16305 2.08 14670 16114 2.3

LD
Polyethylene – 8725 11810 7.86 8287 11299 4.9
LLD
Polyethylene – 17416 21767 5.73 16976 21286 5.8
HD
Polypropylene 21075 26697 6.09 20933 26477 6.0
PVC 22426 25275 3.03 22063 25078 3.2
PS/EPS 11384 13864 5.05 11503 13919 8.0
ABS/SAN 4147 5167 5.65 4131 5158 5.7
Total 100188 120885 4.81 98563 119331 4.9
The most important plastics in recycling are the polyolefins (poly-

ethylene and polypropylene), PVC and polystyrene. PET is gaining con-
siderable importance because it is used in very large and fast-growing
quantities in one easily-definable area: bottles for carbonated bever-
ages. See Table 1.2.
1.3.4 Engineering plastics
The so-called ‘engineering’ (or technical) plastics – which include

ABS, polyamides (nylon), polyacetals, polycarbonates and others – have
experienced rapid growth during the past few years. This group has
higher performance specifications than the commodity plastics, is more
highly priced (usually by a factor of two to three times) and is produced
in smaller quantities. It has been in the interest of producers of com-
modity plastics to raise the technical value of their materials and com-
pete in the lower end of the engineering plastics market. For example,
polypropylene has become a major material for car components, and
modified polystyrenes compete with ABS in housings for consumer
electronics products. However, although there are smaller quantities of
engineering plastics and their applications are mainly in longer-life
products, there are the beginnings of a viable recycling segment, linked
to the automobile and electronics sectors.

Plastics
1.3.5 High-performance plastics
Advanced or high-performance plastics are produced in quantities

measured in thousands or even hundreds of tonnes, compared with the
millions for commodity products. Such plastics include polysulphones,
liquid crystal polymers (LCPs), polyketones, and fluoropolymers. They
are highly priced and meet the very high performance standards
required by specialists in the aerospace, defence and electronics indus-
tries, but are now beginning to offer design advantages that render them
cost-effective in wider fields such as automobile engineering. There are
recycling opportunities for these materials, depending on the basic
value and the cost of extracting and reprocessing them in sufficient
quantities.
High-performance plastics also include the reinforced plastics
sector (or ‘structural composites’), where mainly thermosetting resins
are used with glass and natural fibres, and increasingly with carbon,
boron and other specialised reinforcements. At the lower end of perfor-
mance, composites are used in the engineering and transport sector, for
automobile and commercial vehicle components, where recycling tech-
nology has been developed to reduce scrapped parts to a powder which
can be re-used as a filler in new mouldings. At the high-performance
end, the value of fibres such as carbon makes it interesting to investigate
recovery of the fibre from aerospace and military applications and high-
tech sports equipment.
1.4 The structure of the scrap

recovery/recycling sector
Material for recycling of plastics comes from two sources: process

scrap and post-consumer waste. Recycling of process scrap (i.e. waste
material left over from plastics processing) is well established and often
involves granulating and feeding back off-cut and rejects in-plant into
the original application. This is a particularly important aspect of pro-
duction of blow-moulded bottles, and products thermoformed from
sheet, and it is now standard practice to incorporate, where possible, an
extra layer into a product, to accommodate in-plant reground material.
This, it must be said, falls more into the category of ‘good housekeeping’
than actual recycling.

Post-consumer recycling of plastics, however, poses completely

different and much bigger challenges. There are two main sources:
waste retail packaging and scrapped consumer products. Whereas
process scrap is clean, concentrated in one place, composed of one or
more known materials and involves very small additional collection
costs, post-consumer waste is often dirty and diffuse, thereby involving
high and often uneconomical collection costs. Moreover, it can be made
up of many materials which need identification and separation. This
creates a high level of costs, which may often make the recycled material
significantly more expensive than the same material in virgin state. If
there is to be an effective recycling system, therefore, some ‘non-market’
intervention, by tax, levy or direct subsidy, may well be necessary.
Both legislators and the industry strongly urge that, before consid-
ering how to deal with waste, the essential preliminary step is to mini-
mise the amount of material being used in the first place. Plastics have a
particularly good record in this respect, and it has been estimated by Elf
Aquitaine (now named AtoFina) based on their research that, in packag-
ing particularly, the improvement of materials and processing tech-
nology has reduced the volume of material by amounts ranging from
10% to 25.6%, with an average reduction of more than 11%.
For recycling of plastics there are several levels. The most direct
form is ‘closed loop’ recycling, in which plastics waste is reprocessed
into a product similar or identical to the original. As well as handling in-
plant scrap, this is used widely for production of film for agriculture and
garbage bags.
1.4.1 Mechanical recycling
‘Mechanical’ recycling is the process commonly accepted as recy-

cling. It involves size-reduction and granulation of plastics waste and
melt-processing into new products. Since this relies on melt processing,
by extrusion compounding and moulding, it is only useful as a method
for recycling thermoplastics. The waste material tends to deteriorate
during reprocessing (to about 70–80% of original values) but it is also
possible to boost properties by means of suitable additives. Generally
speaking, however, one is looking for less demanding applications for
this material – and it is most unlikely that it would meet legislative stan-
dards for use in contact with foodstuffs.

Plastics
In order for mechanical recycling to be successful, the following

conditions need to be met:
• There must be a reliable and large supply of post-consumer plastic

waste. This calls for the establishment of widespread and efficient
collection infrastructures. Such schemes for plastics are under
development in most countries, but are less well advanced than
schemes for paper and glass.
• Maximum homogeneity and purity of the recovered resin. The
more this condition is met, the greater the potential for higher
value-added applications for recycled products. Impure and
contaminated resins affect processing and reduce the
performance of the final product. At present manual sorting is
mainly used, but automated technologies using fluidised bed
floatation, infra-red and other methods are being developed. A
crucial barrier to overcome is the ability of such technologies to
cope with very large volumes of waste. It is also important to be
able to deal with other materials in the plastics, such as additives
inside or paint and print outside.
• There must be sufficient market demand and uses for the recycled
plastics. New markets are emerging, and in some countries
Government purchasing contracts demand a proportion of
products made from recycled material. For plastics, the majority
of applications at present are in low-value products, such as
insulating fibre, plastic strapping and wood replacements.
• Prices of virgin resin must not fall too low. The collection, sorting,
cleaning, processing and marketing of recyclates is a costly
business, and it is near-impossible to see it ever being able to
compete on a level basis with virgin material. This implies some
form of intervention, by means of tax or subsidy, to support the
recycling sector. It also suggests that a better prospect for
mechanical recycling is to concentrate on the higher-value
engineering plastics.
The most significant commercial development in this sector to

date is the establishment, by the Dutch polymers manufacturer DSM
and the recycling specialist Wavin Re-use (also Dutch), of a 100000
tonnes/year capacity joint venture.

1.4.2 Feedstock recycling
Feedstock recycling (also known as ‘chemical recycling’, depoly-

merisation and ‘polymer cracking’) has been the subject of much
research and development activity by oil and chemical companies since
the 1980s, and offers an exciting prospect for future treatment of plastic
waste. It effectively reverses the polymerisation process, returning plas-
tics to their constituent monomers or even to their basic hydrocarbon
feedstocks. The resulting raw materials can then be repolymerised as
plastics materials or used as an input in petrochemicals plants.
This method of recycling has a number of significant advantages.
The quality of the recycled product is equivalent to that of virgin resins
(PET produced from feedstock recycled PET waste has gained FDA
approval for use again in contact with foodstuffs). The process will also,
to a certain extent, tolerate mixed and contaminated plastics waste. To
be economic, however, it requires an input measured in tens of thou-
sands of tonnes. Against it, the process is not necessarily going to pro-
duce monomers that are any cheaper than those available on the free
market – and similar technologies which can reduce plastics to oil may
be technically exciting but they are up against an even lower cost thresh-
old. The technology has been brought to a commercial scale, notably in
the USA (for reformulating PET from drinks bottles, and nylon from
waste carpets) and in Germany (for producing petrochemicals from
mixed plastics packaging waste). Also in Europe, a consortium led by BP
is developing a process, known as the BP Feedstock Recycling Process;
however, BASF, which had also developed technology, withdrew from a
German venture because it was uneconomic.
1.4.3 Waste to energy recovery
‘Waste to energy’ (WTE) recycling is the recovery of the energy con-

tent of plastics materials via efficient incineration. Plastics (which
are made largely from oil) have a higher energy content than other
components of the waste stream and are particularly suitable for energy
recovery by incineration. Extensive studies – and some commercial
experience – have shown that this method could be employed to
fuel electricity generating stations, feed district heating schemes and
fuel high-energy-consuming industrial processes such as cement
manufacture and blast furnaces. It has also been shown that the pres-

Plastics
ence of a plastics content in the general waste stream entering an incin-

erator provides some of the fuel necessary and reduces the requirement
for oil.
However, incineration has a poor image with the public because of
fears of potentially toxic emissions, and construction of a ‘clean’ inciner-
ator calls for high capital investment which, in the present climate, is not
forthcoming from the public sector. Incineration is therefore not always
regarded by legislators as a legitimate part of the recycling chain. WTE is
used in Japan but efforts to develop it in the USA have run into environ-
mental objections. Experience in European countries varies, ranging
from the UK’s incineration of only 10% of municipal solid waste to
Switzerland, which incinerates about 80%. A number of facilities in
Sweden produce and use Refuse-Derived Fuel (RDF), which can benefi-
cially contain a significant fraction of plastics, and studies by APME in
Würzburg, Germany, and by the British Plastics Federation in the UK
have shown that plastics can be safely incinerated in modern well-
managed incineration plants. There are signs that official reservations
about energy recovery by incineration are moving towards acceptance,
and it is certain that some such process must form part of a comprehen-
sive recycling programme for the future (see Part Four, Chapter 1).
Despite the growth of legislation for plastics recycling in recent

years, the levels of plastics recycling achieved are still below those of
competing materials. In Europe it is estimated that some 7–8% of plas-
tics waste is recycled, equivalent to about 4% of consumption (the differ-
ence between the two figures is accounted for by the differing life spans
of plastics products). Most plastics packaging (with notable exceptions
such as crates and returnable transit packaging such as is used in super-
markets) enters the waste stream almost as soon as it is consumed,
whereas plastics used in domestic appliances, cars and in construction
applications do not enter the waste stream until several years or even
decades after purchase.
The amount of plastics waste that is recycled amounts to 20–30% of
total consumption: the USA is at the higher end, Europe is nearer 20%
and Asia/Pacific is probably below this level. In Europe, recycling rates
for plastics differ greatly from country to country: from 22% in Austria, to
just 1.6% in the lowest rated country, Ireland. Packaging is still by far the

largest potential application in Europe and worldwide for the recycling

of virgin plastics, at 41% in Europe (12.59 million tonnes), followed by
construction at 19% (5.7 million tonnes), domestic applications at 18%,
automotive at 7% (2.35 million tonnes) and electrical and electronics, at
8% (2.3 million tonnes).
According to the Association of Plastics Manufacturers in Europe
(APME), between 1997 and 1998 recycling of plastics increased by 16%,
amounting to 5.32 million tonnes on an estimated consumption of 30.3
million tonnes. During 1998 some 1.07 million tonnes of the European
total was recycled as new granulate (mechanical recycling) and an esti-
mated 3.3 million tonnes – representing 19% of the total – was recycled
by incineration, with recovery of the energy (20% higher than in the pre-
vious year). Waste plastics recovered by means of feedstock recycling
increased by 8% during the period, but Germany is still the only
European country to use this option.
Packaging, because of its size (and its very public evidence), has
been the target of most recycling initiatives. In future a greater variety of
plastics will undergo recycling and it will touch upon more sectors.
Producers and users of packaging materials are now looking more
closely at the implications of new and existing packages (including
labels, closures and printing ink) and the automotive industry is begin-
ning to think in terms now of designing new components to be easily
dismantled, incorporating a percentage of recycled material in new
vehicles and (possibly) of rationalising its purchasing to reduce the
number of different materials.
Since the late 1980s, and especially as landfill sites have been filled,
governments – local, national and supra-national – have increasingly
formulated policies and legislation to reduce the problems arising from
the growing quantities of waste. Ecological considerations, such as the
use of non-renewable resources, have also coloured opinion. Much of
the general legislation affects plastics in the same way as it affects other
materials, but some is aimed directly at plastics or specific additives
used in plastics. Most of the legislation, to date, has related to recycling
of packaging waste (including transit packaging) but, in the European
Union, draft directives for automobiles (End-of-Life Vehicles) and elec-
trical/electronics products (WEEE) have also been produced.

Plastics
The European Union’s Directive on Packaging and Packaging

Waste was finally adopted in December 1994. Covering all types of pack-
aging and packaging waste, this set recovery and recycling targets for all
materials used in packaging throughout the Union. Within five years of
the implementation of the directive, between 50% and 65% of packaging
waste was to be recovered and 25–45% of it was to be recycled, with at
least 15% of each material to be recycled by 2001. This implied that
greatly improved recycling rates for plastics packaging would have to be
achieved. Within ten years of implementation, the targets were to be
reviewed with a view to substantially increasing them. Member states
were also permitted to set targets above those contained in the directive
provided that these did not lead to disruption of schemes of other
member states or amount to non-tariff barriers to trade. Such countries
also had to establish that they had the facilities to process all their waste.
The EU directive followed years of lobbying by some member
states, certain of which (notably Germany) went ahead with their own
legislation. The German Packaging Ordinance of 1991 set high targets
for recovery/recycling of packaging waste, with a timetable, and made
producers and retailers responsible for the disposal of used packaging.
Recycling rates for household plastic packaging of 29% were achieved in
1993 and over 50% in 1994. In early 1995, the ordinance was under
review, with some scaling back of recycling targets.
To organise the collection and sorting of consumer waste required
by the ordinance, the Duales System Deutschland (DSD) was estab-
lished. Under this, members paid a fee to DSD and were permitted to
mark their packaging products with a green spot symbol, signifying that
the product was part of the DSD scheme and was backed by an approved
recycling scheme. Originally, incineration was not allowed as a recycling
option.
The scheme ran into trouble because it was too successful. There
was insufficient German recycling capacity for the unexpectedly large
quantities of waste packaging material which were collected. DSD
responded by exporting collected waste to other EU states and to devel-
oping countries. This created serious ‘ripples’ in the world waste
materials trade – not the least of which included the depressing of
market prices in the West and the destroying of traditional ‘waste-
picking’ jobs in the East.
After the initial surge, provisions for recycling plastics waste in
Germany have been modified, notably to admit chemical recycling as a

legitimate method of attaining the target percentages. It is thought that,

in a few years, this method of recycling could account for some 70–80%
of collected plastic waste. The 1991 ordinance has also had the effect of
significantly increasing the use of plastics for returnable bottles, rather
than one-trip disposables. This has had a marked impact on the volume
of plastics requiring collection – but there is much argument about the
comparative energy balance between many cycles of collection and
washing and a one-trip bottle.
Other European states have adopted different approaches to the
plastics waste disposal problem. France has a system of ‘Valorisation’
which requires, essentially, that some value must be extracted from
waste materials, including plastics. Belgium introduced an ‘eco-tax’ on
products regarded as hostile to the environment (aimed particularly at
PVC). Italy and Finland have also used taxation. Scandinavian countries
have concentrated on deposit schemes and reusable bottles but, at the
end of 1993, Sweden introduced tough new laws which closely followed
those of Germany. Elsewhere in Europe, the Spanish, Dutch and UK gov-
ernments have adopted a voluntary approach to the plastics waste man-
agement problem. Bans and limitations on certain plastics materials
have also been used (but there are questions as to who was to benefit, the
public or the producer of a competitive material). For example, poly-
styrene attracted the greatest antagonism in the United States, while
PVC, though not actually banned as a material anywhere in the world,
has experienced problems in some European countries. Most of the
recycling legislation sets targets and deadlines, while implicit in the vol-
untary schemes is the understanding that, if the domestic industries fail
to achieve sufficiently high recycling levels, statutory measures would
be introduced.
In North America, serious attempts to introduce recycling laws and
legislation related to other waste management issues have been in place
longer than in Europe. In the USA, the key legislative level is the state,
leading to a myriad of different regulations and recycling requirements
throughout the country. Mandatory recycling targets are the favoured
sort of programme. However, whereas disposal of plastic waste material
in European countries such as Germany, France and Denmark is the
responsibility of the manufacturer and distributors, the costs in the USA
have fallen primarily on the taxpayer and have placed a heavy cost on
state budgets. These costs have been impossible to recoup because the
cost of collection and disposal of waste is often several times the market

Plastics
value of recovered material. In Canada, a National Packaging Protocol

was introduced in 1990 as a voluntary agreement between the govern-
ment and key sectors. This aimed to reduce packaging waste to 50% of
1988 levels by 2000 using source reduction and recycling.
For efficient disposal of plastics waste, it appears that a sensible
policy would involve all of the different methods, mechanical, chemical
and energy-recovery, according to the type of material and factors such
as availability, collection, sorting and cleaning. Many experts advocate a
‘cascade’ approach, in which a plastics material is first used for its high-
est properties (say in food packaging) and then is reused for possibly one
other application (such as furniture or agriculture) before final disposal
by an energy-recovery method.
1.4.6 Trade in scrap and scrap pricing arrangements
Plastics scrap and waste material from manufacturing sources has

been traded for many years, and waste from nylon fibre manufacturing,
reprocessed as a moulding compound, has also been available on the
market for some time. This is because the waste materials were clean
and identifiable, and could be offered at a price below that of virgin
material, but still yielding a profit to the trader. The development of a
market in post-consumer plastics waste is taking much longer because
of problems of sourcing, cleanliness and separation, all of which have
raised costs to a level above that of virgin material. The distortion in
world markets produced by efforts to clear the volume of waste arising
initially from the German Packaging Ordinance is also taken as a sharp
lesson. There has been an attempt to establish a market on the Internet,
but it is too early to judge the results.
With the arrival of higher-grade engineering plastics waste from
the dismantling of automobiles and consumer and business electrical
and electronics products, there is a much stronger possibility that a
trade will build up. Especially in Germany, but also in France, there has
been considerable work done on identification of those components
that are large and easy to separate, such as polypropylene bumpers and
battery cases – but an important factor is that (apart from organised
trials) the cars coming into scrapyards are those built 10–12 years ago,
before considerations of recycling arose or were implemented. The
components designed today with recycling in mind will not be scrapped
for another 10–12 years. However, an industry-based recycling system is

being constructed for computers and business equipment, which have a

shorter lifespan. While this is essentially designed to recover valuable
components and metals, plastics recovery may be able to be established
on the back of this infrastructure.
Most manufacturers of engineering plastics now offer recyclate-
based grades (mainly of nylon) on their lists. The development of spe-
cific recycling systems for PET bottles and nylon carpeting also points to
establishment of potential markets for reprocessed plastics waste. It
should be noted that both systems use chemical recycling processes
and can be supplied with large quantities of post-consumer waste.
Repolymerised PET has a number of established applications, including
insulating fibres, tapes and strapping, and applications as moulding
materials are being developed. Reprocessing of carpet waste is to pro-
duce the source feedstock, caprolactam, some of which is repoly-
merised as moulding materials. These materials may be traded on an
open market, but at present they are handled in closed loops between
manufacturers. Apart from such closed-loop systems related to specific
materials, it seems unlikely that a general market for plastics waste will
emerge, on sheer grounds of cost.

2 Rubber
M E Cain, Dr P Jumpasut and P J Watson


2.3.1 Rubber production and consumption
2.3.2 Market structure and institutions
2.4 The structure of the rubber recovery/recycling sector

2.4.2 Forms and availability of rubber wastes
2.4.3 Rubber recycling arrangements
Reuse
Product life extension
Recycling
Disposal
2.4.5 Trade in recycled rubber

Raw rubbers are high molecular-weight polymers with molecular

backbones normally composed of carbon and hydrogen, exceptionally
of silicon and oxygen or of sulphur. They may also contain nitrogen and
halogens, particularly chlorine, bromine and fluorine. Rubbers are
available as raw materials either as solids or latices, which are colloidal
dispersions of solid rubber particles in an aqueous medium. Two major
classifications are recognised: natural rubber, a product of the tropical
tree, Hevea brasiliensis, and thus a renewable resource,1,2 and synthetic
rubber, a family of materials derived from petrochemical feedstocks.
Total world consumption of rubber in 1998 was 16.46 million tonnes, of
which 60% was synthetic rubber.3 Table 2.1 shows the world synthetic
rubber capacities.
Apart from a minor use as crepes for shoe solings and in adhesives,
raw rubber is almost never used itself in products. Industrial rubber
products are almost exclusively made of vulcanised rubber, i.e. rubber
that has been treated with chemicals and heat to provide the necessary
strength and resilience. The products are solids of varying degrees of
hardness with the characteristic property of elasticity, i.e. the ability to
return almost instantaneously to their original shape after deformation
from tension, compression or shear; rubbers are virtually incom-
Table 2.1 World synthetic rubber capacities, 1998

Type ’000 tonnes
SBR: solid 4803

SBR: latex 606
XSBR 1440
BR 2237
IR 1387
EPM/EPDM 1003
IIR 822
NBR 633
CR 449
Total 13480
Source: International Institute of Synthetic Rubber

Producers.

pressible. Vulcanised rubbers are generally tough, chemically inert and

insoluble, but are swollen by various polar and non-polar solvents
depending upon the type of rubber. Their permeability to gases and
solvents varies considerably, and particular types are therefore chosen
for specific applications, e.g. those involving resistance to oil or air
retention. Although popularly regarded as ‘perishable’, rubber articles,
particularly those of more than a few millimetres thickness, can be very
effectively protected against degradation even in aggressive environ-
ments. Thus rubber products such as tyres have an extremely long
life; they are virtually indestructible and because of their composite
nature are difficult to recycle, and therefore pose a major scrap disposal
problem.
Rubbers are used in a huge variety of household, medical and

industrial products. However, some 60% of the world’s rubber consump-
tion goes into tyres, and a total of 70% into the automotive industry. The
next largest single sector is latex goods, which range from thin-walled
items such as condoms and balloons to foam mattresses. Rubber prod-
ucts are shown in Table 2.2.
Table 2.2 Rubber products

Industrial rubber products Consumer products Latex products
Pneumatic tyres Footwear Dipped products

Solid tyres Shoes Gloves
Mouldings Soling sheet Condoms
Extrusions Toys Thread
Belting: Sports and leisure goods Adhesives
Conveyor Moulded foam
Transmission Carpet underlay
Elevator Rubberised hair/coir
Hose & tube Leatherboard
Reinforced
Non-reinforced
Diaphragms
Hard rubber products
Industrial sheeting, linings
Cellular products
Reinforced fabrics
Source IRSG.

Rubber
Raw rubbers are generally intractable materials and are pro-

cessed using energy-intensive operations in large industrial machines.
The process first involves supplying energy to break down the rubber
molecules (mastication) to give a material that is plastic when hot,
incorporating the required ingredients into the hot plastic mass;
second, cooling; third, shaping in a mould under pressure; and
finally, heating to carry out the vulcanisation reaction in the pres-
surised mould. The exceptions are latex goods, produced using liquid
technologies involving either dipping shaped formers or entrapping
air to produce foams; silicone elastomers which are processed as
liquids; and polyurethanes which are formed in situ from two liquid
chemicals.
The majority of rubber products are complex and may incorporate
more than one elastomer either as a blend, a separate sub-component
or both. The bulk of rubber products, such as tyres, hose, belting, tubing,
profiles, footwear, moulded products and others, are prepared from
mixtures (compounds) containing vulcanising and preservative chemi-
cals, chemical processing aids (oils) and a range of other materials to
enhance the performance, competitiveness, appearance or properties
of the final rubber product. Strength and wear resistance are obtained by
the incorporation of inert fillers such as carbon black or silica, and many
products, particularly tyres, hoses and belting, are reinforced by textiles
and/or metals such as steel. Many industrial components are chemi-
cally bonded to metal supports or inserts. Thus, even if it were simple to
recover rubber from an end-product or to recycle it, the problem that
always remains is one of removing the other materials mixed with the
elastomers. The complex nature of compounded rubber products can
be seen from the composition of typical car and heavy truck tyres (% by
weight) shown in Table 2.3.
The rubber hydrocarbon in a tyre is a mixture of natural rubber,
styrene-butadiene copolymer, polybutadiene and polyisoprene in vary-
ing proportions depending on the tyre and its manufacturer. Larger
tyres and those used under more arduous conditions normally contain
higher proportions of natural rubber. Only a very few products – tyre
inner tubes, which are almost always made of butyl rubber, and latex
goods, which are almost exclusively natural rubber – provide a source of
a single rubber.

Table 2.3 Tyre composition

Component Weight %
Car tyre Truck tyre
Rubber hydrocarbon 46–48 41–45

Carbon black 25–28 21–23
Steel 10–12 22–25
Oil, vulcanisers, etc 10–12 9–11
Textile 3–6
Compounded weight (kg) 5–10 50–70
It is a characteristic of vulcanised rubbers (thermosets) that they

cannot be re-formed without chemical or mechanical degradation. This
is a problem in the disposal of scrap/reject material at the factory as well
as presenting problems in recycling of used rubber goods. However,
hybrid materials produced by mixing rubbers and plastic materials or
by complex polymerisation techniques, known as thermoplastic elas-
tomers, are increasingly being used because they do not require vulcani-
sation under pressure but can be processed like plastics by shaping
while hot and then cooling.
2.3.1 Rubber production and consumption
Natural rubber is produced in the developing countries of

Asia (93%), Africa (5%) and Latin America (2%). The major synthetic
rubber producing countries are the USA, Russia, Japan, France and
Germany. The major consuming countries are still mainly in North
America and western Europe, but the trend over the past decade,
even after the ‘currency crisis’ of 1997/8, has been for consumption to
shift from the highly industrialised countries to East and South East Asia.
The rapid industrialisation and economic success of several Asian coun-
tries, including South Korea, China, Taiwan and the ASEAN group, and
saturation in consumption in North America and Western Europe, has
led the Asian region to become the focal point for growth in elastomer
demand.

Rubber
2.3.2 Market structure and institutions
Natural rubber is produced largely by small farmers in developing

countries and exported through a complex trader-based market to the
industrial users. The number of traders is very small in relation to sales
volume, and the buyers thus exercise considerable control over the price
paid at the local level. At the international level, there are four major
natural rubber markets, namely Kuala Lumpur, Singapore, London and
New York, and other smaller markets in Tokyo, Kobe, Hamburg,
Amsterdam, Paris, Jakarta and Hat Yai. Whilst these markets are dis-
persed geographically, they are closely linked in a global system.
Changes in prices in one market can affect prices in the other markets.
Some of these international commodity markets, namely those in Japan
and Singapore, also provide facilities for both futures and physical trad-
ing. The major rubber trade associations publish daily their respective
prices of important types and grades of rubber, determined by a com-
mittee generally comprising brokers, producers and dealers. Prices
quoted in the major markets are often used as a basis for pricing rubber
in other parts of the world. Futures prices are competitively determined
by demand and supply. There is a relationship between the two prices
because futures prices often become the official prices of the market and
are widely used in physical trading around the world.
Synthetic rubber is produced mainly by large oligopolistic firms to
which economies of scale are available. A large element of costs is
attributable to research and development, and to marketing. Direct
contact is maintained with customers and potential customers, backed
by technical service; additionally and increasingly, products modified to
customers’ specific requirements are developed so that product differ-
entiation between producers is intensified. Synthetic rubber produc-
tion is much more widely spread geographically than that of natural
rubber, and a very substantial proportion of synthetic rubber produced
is used either within the same multinational companies or within the
country of origin. Only about 25% of world output of synthetic rubber is
marketed internationally, and because of the shorter supply routes it is
unnecessary for buyers of synthetic rubber to purchase forward and
thus maintain high levels of stocks. Most synthetic rubber is traded
directly or countertraded at prices loosely related to individual produc-
ers’ list prices, sharply limiting the volume going through the open mar-
ket. For this reason it is not possible to ascertain actual prices paid with

any accuracy. Where synthetic rubber manufacturing facilities are

owned by major rubber manufacturers, ‘transfer prices’ are established
by whatever principles they wish.
Rubber products are almost exclusively traded as industrial com-
ponents, with very few being sold to the general public, so that there are
virtually no examples where the ultimate end-user (the ‘consumer’) can
influence the composition of the end-product. The major exception is
replacement passenger car tyres, but here also the consumer has no
influence, even by choosing different brands, on the composition of the
product. The design and composition of rubber products is thus set by
the manufacturing industry and its immediate customers, largely the
automotive industry.
2.4 The structure of the rubber

The current annual accumulation of discarded rubber products

throughout the world is estimated to be approximately one billion
scrap tyres4 and an estimated 3 million tonnes of used compounded
rubber products. Unfortunately, tyres and rubber waste have a much
greater significance as a disposal problem than as a potential source of
material for recycling. Thus the traditional ways of dealing with rubber
wastes have been by the establishment of surface dumps for tyres, dis-
posal in landfill, chemical reclamation or product life extension. A
general worldwide move towards the recycling of rubber wastes,
although desirable on an environmental basis, has proved very difficult.
This has been mainly due to the special properties of thermoset rub-
bers, for which the complex compounding with other materials,
chemical crosslinking during vulcanisation and the incorporation into
metal/fabric composites in manufacture has made disaggregation
extremely problematic.
The problems of disposal and recycling are largely those of indus-
trialised countries, since per capita use of rubber and GNP are closely
related, and essentially revolve around the disposal of tyres and other
industrial products, as these constitute some 90% of rubber usage.
Medical goods cannot be recovered because of health and safety prob-
lems, and are normally dumped or incinerated, and those rubber prod-
ucts which come into the hands of consumers – household goods, toys,

Rubber
etc – are too diverse to form a recognisable waste stream. Subsequent

discussion will therefore concentrate almost entirely on the problems
and solutions of tyre disposal.
The unsightly nature of tyre dumps, often containing hundreds of
thousands of tyres, and their potential dangers in polluting the environ-
ment through the smoke and chemical run-off associated with fire, and
in harbouring mosquitoes,5 has led to increased demands from environ-
mental pressure groups for other disposal methods to be pursued. At the
same time, severe restrictions have been placed on the disposal of
tyres in landfill sites. These sites will either not accept tyres or will
require them to be shredded, a process that considerably increases the
disposal costs, or ban tyres in landfill sites (EU directive, 1995) early in
the twenty-first century. This has increasingly focused attention on the
extension of the life of tyres by retreading and on their ultimate disposal
by incineration with energy recovery, or their conversion into usable
scrap materials.
Secondary production of unadulterated thermoset rubbers is not

feasible, as they are always, as previously noted, combined with other
chemicals or materials during the manufacture of rubber products. The
recovery of rubber compounds is also complicated by their frequent
contamination with fluids or their partial degradation through the com-
bined effects of oxygen and heat. Thus recovered rubber can only be
used either with virgin rubber in amounts small enough not to detract
seriously from the properties of the finished article, or as particulate
fillers in lower-grade products such as solid tyres or sports surfaces. This
reuse only prolongs the life of the rubber, which must ultimately be dis-
posed of by landfill, chemical recovery or incineration with energy
recovery.6 Nevertheless, the chemical reclaiming of rubber wastes once
constituted a major industry, supplying some 25% of the raw material
for the US rubber industry in the 1950s.
2.4.2 Forms and availability of rubber wastes
The major source of scrap rubber is tyres, which in the major

rubber-consuming countries represent about 2% by weight of the total
of industrial, commercial and domestic waste. The approximate current

Import used Import on

SOURCES Production Import
tyres vehicles
Tyres OEM Export on

CHANNELS Export
seller national vehicles
USERS (Waste
Users
Producers)
Used tyre
COLLECTORS Retreading Wreckers
collection
Processing Export used

RECOVERY & recycling tyres
DISPOSAL Landfill
2.1 The tyre life cycle. Source: BLIC.
annual levels of the arisings of tyres (see Fig. 2.1) excluding industrial,
agricultural and motor cycle tyres are detailed in Table 2.4.
There are a few other sources of well-defined rubber wastes. These
include rubber body seals from cars, tyre inner tubes and reject medical
gloves. The majority of rubber components in cars are small, and form
about 10% of the non-metallic waste recovered from the shredding of
cars. This is currently disposed to landfill, but in future may have to be
treated thermally.7 Other products such as textile-reinforced rubber
belting and hose can also be reused by shredding or granulation.
2.4.3 Rubber recycling arrangements
Efforts to reduce the problem posed by rubber wastes are concen-

trated in several areas. There are a few cases in which tyres specifically

Rubber
Table 2.4 Tyre arisings (millions of tyres)
Car tyres:
Replaced 500
Retreads replaced 50
On scrapped cars 100
Total 650
Truck tyres:
Replaced 200
Retreads replaced 70
On scrapped trucks 30
Total 300
Grand total 950
can be reused without reprocessing. Product life extension is aimed at

reducing the accumulation of wastes by prolonging the life of rubber
products. Recycling involves the recovery of limited amounts of selec-
tively retrieved material by grinding or shredding, and is usually fol-
lowed by downcycling, the use of ground or shredded rubber waste as an
inert filler in lower-grade products. Reclaim is produced by the chemical
and thermal treatment of – usually ground – wastes to give a material
that may be added to new rubber compounds as a partial replacement
for virgin rubber. However, the volume of rubber processed by any of
these routes is small compared with the production and use of virgin
rubbers. All of these options merely delay the final disposal of the rubber
by dumping or incineration with or without energy recovery.
Reuse
There are a number of uses for scrap tyres without further process-
ing. They can be used as ballast for plastic covering film in agriculture, as
boat fenders and in a variety of civil engineering projects such as artifi-
cial fish reefs, coastal defences, river and reservoir bank reinforcement,
etc. This is a grey area of recycling rubber wastes as the tyre may not now
occur as waste but, in fact, begins a new life as another ‘structural’
object. In some cases this second life for a scrap tyre means that it may
never be released for recycling and thus becomes diffused into the
environment.
Product life extension

The strategy of the world’s automotive industry is to eliminate any
replacement of components. With the minor exception of wiper blades

and the major one of tyres, replacement of the original automotive rub-
ber products has almost been eliminated. Damage caused during the
life of some rubber products can be repaired – punctures in tyres for
example – although this is becoming infrequent due to increasingly
stringent legislation in developed countries.
The main form of life extension for rubber products is the retread-
ing of tyres. Used tyres are collected and rigorously inspected to ensure
that the body of the tyre, the carcass, is suitable for further use. Any
remaining tread is removed by buffing, generating a useful by-product
in rubber crumb. Retreading may be carried out by the ‘hot’ method, in
which unvulcanised rubber compound is applied to the buffed carcass,
the composite placed in a metal mould and heated under pressure at
temperatures between 150 and 180°C; this process, which is similar to
that used in producing new tyres, is used almost exclusively for
passenger-car tyre retreading, but increasingly less for truck tyre
retreading. Truck tyres are also retreaded by a ‘cold’ or ‘pre-cured’
process, in which a pre-formed, vulcanised tread is fixed to the buffed
carcass by means of an intermediate ‘cushion gum’ layer by vulcanisa-
tion at temperatures of approximately 100–110°C. The practicality of
retreading is that about 80% of the original tyre is preserved and the
other 20%, the tyre tread, is renewed. Retreading extends the service life
of the tyres and hence reduces total material costs per tyre.
Recycling
Granulated rubber: Granular rubber is obtained by the buffing of
tyres prior to retreading or from scrap tyres and other rubber wastes by
physical size reduction, with or without cryogenic treatment. It is nor-
mally produced in a variety of particle sizes from around 2–4mm down
to very fine powders, depending on its intended application. It is used as
a minor particulate filler in preparing formulations for some products
and as a major constituent in others such as carpet underlay and sports
surfaces.
Cross-ply and textile-braced tyres are easily shredded and ground
into granulated rubber. However, the tyre market today is dominated by
steel-braced tyres and this increases the energy (and hence cost) for the
reduction of tyres into small-particle ground rubber. Consequently
there is a tendency to derive rubber granules from only the tread part of
the used tyre, leaving the carcass for subsequent disposal.

Rubber
Reclaimed rubber: this can be mixed with virgin rubber in rela-

tively small proportions without seriously affecting the properties of
the final rubber article and has been available for over a century. In the
period 1920–1950, reclaimed rubber was an important raw material,
and accounted for as much as 25% of the rubber used in the United
States. However, the increased availability of cheap synthetic and
natural rubber, together with the increasing costs of the energy-
intensive and environmentally polluting process used in reclaiming
rubber, gradually reduced its consumption to a low level (estimated at
<20000 tonnes) in the USA. Although there are now environmentally
acceptable processes for the production of reclaim,8 its use is not
increasing significantly.
Methods of producing reclaim rubber by chemical digestion have
been known for more than a hundred years. In the original alkali digester
process, the ground rubber (derived from rubber wastes) was cooked
in dilute caustic soda solution which removed textile fibres and devul-
canised the waste in one step to produce a reusable material. Most pro-
cesses producing reclaim rubber – open steam, heater or pan process,
thermochemical, etc – developed during the past century require the
waste rubber products to be broken down into crumbs small enough to
permit any embedded metal to be removed by magnets.
The increased interest in recycling has led to the investigation of
alternatives to the chemical digestion process for reclaim. Ultrasonic
disintegration9 has recently been proposed, as has a chemical process
for breaking the crosslinks inserted during vulcanisation.10 Both these
processes have yet to make a significant impact in the industry. The
following are some of the emerging markets for reclaimed or recycled
rubber:
• filler material for higher value elastomers

• playground surfaces
• running tracks
• soil additive to reduce compaction
• plant mulch
• road-side attenuation products
• animal bedding
• bound rubber products (irrigation hoses)
• traffic bollards
• sports shoe soles, etc.

Disposal
The main problem associated with recycling waste rubber
articles to ‘new’ rubber products through granulated rubber, retreading,
reclaim rubber, etc, is that these products themselves (except pos-
sibly in the case of rubberised asphalt, where rubber ‘disappears’) in
turn become rubber wastes. Consequently, the dilemma of rubber
wastes revolves eventually around the problem of disposal. The dump-
ing of tyres in stacks or disposal in landfill is becoming increasingly
restricted by legislation in most developed countries. A variety of
alternatives are being used or explored with varying levels of govern-
ment support.
Rubberised asphalt. Many countries throughout the world over the
past sixty years have experimented with virgin rubber, in the form of
rubber crumb or latex, combined with asphalt in road surfaces. Despite
the longer life of the resulting roads, the increased cost of the road mate-
rial has largely prohibited widespread use of rubberised asphalt, which
is confined to special applications where wear rates are high or the road
is inaccessible. Interest has now turned to the disposal of scrap tyres – as
rubber granules – in this way. This process for disposing of scrap tyres
was given a boost in the USA in December 1991 when the Intermodal
Surface Transportation Efficiency Act (better known as the Highway
Bill or ISTEA) was passed. This required states to use progressively
higher levels of tyre crumb in asphalt road surfaces. However, its imple-
mentation today continues to be delayed, largely thanks to the
asphalt lobby group.
Thermal decomposition. This type of reclamation has as its objec-
tive the decomposition of the rubber product and the reclamation of its
constituent parts. The exact nature of the materials recovered depends
on the process used and includes gases, fuel oil, carbon black, zinc oxide,
steel, sulphur and hydrocarbons.
The main methods of thermal reclamation or recycling – pyrolysis,
gasification, hydrogenation and catalytic extraction – that have been
developed are currently not economically viable on a large scale.10
Nevertheless, from an environmental point of view, material reclama-
tion is very desirable as it reduces demands on the earth’s resources.
Thermal disposal. Used tyres and, to some extent, other rubber
wastes can be burnt to generate energy, and this is increasingly being
considered as a valid solution to the problem of their disposal. Scrap
tyres have a potential calorific value (32MJ/kg) which is slightly greater

Rubber
than that of coal (29MJ/kg) and contain other materials. Recent trends
in landfill and energy costs as well as advances in combustion techno-
logy have shown that both small- and large-scale incineration processes
are viable, even with the strengthening of emission regulations in many
countries of the world. One major use involving incineration is the
incorporation of scrap tyres in the feed to cement kilns, where they act as
a source of heat and impart improved properties to the cement through
the iron content of the steel reinforcement. Energy recovery is also a
viable option, and there are several electricity generating stations pow-
ered by scrap tyres.11
The countries of the European Union (EU) and the USA have as one
of their objectives for rubber waste management the reduction of both
the stockpiling of tyres and their use in landfill – the former to zero by the
year 2000 and the latter by more than 50% during 1995 (compared with
1992). Recent initiatives by the EU and other countries have addressed
the problem of scrap tyres and other waste rubber products. For
instance, the main ‘recommendations’ from the Used Tyres Project
Group of the European Commission are to attain the following objec-
tives by the year 2000 (compared to 1992):
• Reduce the number of scrap tyre ‘arisings’ by 10%.

• Increase retreading from 23% to 25–30%.
• Increase recycling from 30% to 60%.
• Thus, reduce disposal to almost zero.
In a BLIC (Liaison Office of the Rubber Industry of the EU) report

for 1998, it was indicated that in the EU a significant increase has been
made in the area of energy recovery from scrap tyres, with a correspond-
ing decrease in landfill and dispersion. BLIC foresees, if this trend con-
tinues, the termination of the practice of landfill in the next few years in
the EU.
2.4.5 Trade in recycled rubber
There is little trade, particularly at an international level, in scrap or

recycled rubbers. Scrap rubbers are mainly considered as a problem and

various solutions are dealt with within a country rather than trading the
scrap internationally. The scrap rubbers have no ready financial value
and their uses depend to a very large extent on government interven-
tion. For example, tyre burning for electricity or heat may be only mar-
ginally economic unless some form of government subsidy is available,
as scrap rubber cannot compete with bulk fossil fuels.
Some withdrawn tyres cross frontiers for further use; in Europe this
trade is mostly in heavy goods vehicle carcasses suitable for retreading.
In some cases the tyres may be used in their worn condition, or they may
be retreaded in the recipient country. There is also a trade in tyres
retreaded specifically for export. International trade in scrap tyres
mainly involves exports from a richer country to a poorer one, e.g. scrap
tyres from USA to Mexico. In Japan more than a quarter of scrap tyres
are exported for retreading. The Japanese have legislation which tends
to enforce a very short vehicle life and in consequence there is a flouri-
shing export trade in second-hand vehicles, some of which are recondi-
tioned prior to export. Most of these vehicles are currently traded to
neighbouring Asian countries, but Japan hopes to establish a major
market within the Commonwealth of Independent States.
According to the US Scrap Tire Management Council, more than
half of all scrap tyres in the US were used as tyre-derived fuel (TDF) in
1996.
REFERENCES
1 Rahaman, Dr W A, ‘Natural rubber as a green commodity – Part I’, Rubber

Developments, 1994, Vol. 47, No. 1–2.
2 Jones, K P, ‘Natural rubber as a green commodity – Part II’, Rubber Developments,
1994, Vol. 47, No. 3–4.
3 Rubber Statistical Bulletin, International Rubber Study Group, Wembley, UK.
4 Shulman, V L, ‘Technology Transfer Options in Tyre Recycling ’, European Tyre
Recycling Association (1998).
5 Griffiths, J, ‘Giving new life to rubber dumps’, Financial Times, 4 March 1994.
6 Leibbrand, F, ‘Rubber recycling – chances and limits’, Proceedings of the Belgian
Plastics and Rubber Institute, April 1994.
7 Fisher, P M, ‘Old tyres are a burning issue’, Material World, June 1994.
8 Payne, E, ‘Reclaim rubber usage and trends’, Rubber World, May 1994.
9 Rubber and Plastics News, 27 February 1995.
10 Plastics and Rubber Weekly, 15 August 1995.

3 Pulp and paper
Tom Bolton (updated and revised by Eric Kilby of the Paper
Federation of Great Britain)

3.1.1 Characteristics of the industry
3.1.3 Recycled fibre (RCF) definitions
3.1.4 Waste classification
3.2.1 Contraries
3.2.2 Deinking
3.4 The structure of the waste recovery/recycling sector

3.4.1 Relative importance of RCF production
3.4.2 Environmental and economic impact
3.4.3 Trade in waste paper
3.4.4 Waste paper pricing arrangements

3.1.1 Characteristics of the industry
World consumption of paper passed 300 million tonnes in 1998,

with an average growth rate of 3.1% per annum over the last 20 years. 300
million tonnes of paper will use in its manufacture around 275 million
tonnes of cellulose fibre, and around 25 million tonnes of minerals.
Without considering the added value of converted and end-use paper,
the value of the pulp-paper industry is of the order of $US 300 billion per
annum. Added to this is the cost of chemicals – minerals, starch, size,
dyestuff, peroxide, caustic soda – and that due to machinery supply,
clothing, and effluent treatment. The industry also uses sophisticated
controlling and tracking systems, and this information technology cost
must also be considered, as must transportation and materials han-
dling. The annual turnover associated with the industry could, there-
fore, well approach $US 1000 billion.
Many mills are integrated pulp and paper producers. The quanti-
ties produced by a mill are huge, 500000 tonnes per annum not being
unusual.
The industry has grown from one which is craft based to one which
for the most part is now controlled in a highly sophisticated manner. The
industry has long since recognised its reliance on good fibrous raw
materials, and has operated a substantial forestry management pro-
gramme of selective felling and seedling replanting. Trees are felled,
barked, chipped and treated either chemically or mechanically to pro-
duce wood pulp, which is then mixed with water and pumped to a paper
machine.
A modern paper machine is huge. Its purpose is to take the fibre
and water suspension, spread it out uniformly, and then extract
the water from the product in a sequential process of water removal,
by gravity, suction, squeezing and, finally, drying stages. A modern
state-of-the-art paper machine is in essence a number of sophisti-
cated processes linked together. Erected in a purpose-built building it
might cost US$500 million. It could be 20 metres wide, 1000 metres
long and would produce at a rate of 1000 metres of paper per minute – in
four days the output could stretch a distance equal to the 3500 miles
from London to New York!

Every tonne of paper uses around 300–400 tonnes of water to trans-

port the fibres around the system, to lay the paper down uniformly and
to promote strength before the water is eventually removed, when it will
be reused, retaining raw materials and heat within the system.
A paper machine will be rebuilt and upgraded many times in its
lifetime, and it is not unusual to find machines operating today which
were originally built in the early 1900s. These machines will have under-
gone an extensive programme of unit and section replacement and
rebuild over their lifetime.
Because the industry is so capital-intensive, it operates plant
24 hours of the day, seven days a week and 52 weeks a year. The
paper machine will only be stopped when it is necessary, and then it will
usually undergo a detailed programme of planned maintenance. The
production plant is highly capital-intensive. A paper mill with an output
of around 200000 tonnes per annum will operate with around 500
employees.
Paper is produced in widely differing varieties. Newsprint,

boxboards, corrugated boards, printings and writings, tissues and
speciality papers, like photographic and cigarette tissue, are just a few
examples. Printing papers are often coated to enhance print quality, the
paper having a mineral-based surface coating applied at the paper
machine, or in a separate process.
The variety of fibrous raw material is wide, and may be specific to
the grade of paper produced. For example, newsprint and boxboards
require a less sophisticated raw material than higher-quality printings
and writings. The hardwood or softwood content, the pulp treatment
and the bleaching treatment all combine to produce grades with spe-
cific properties. There are also very special small-quantity raw materials
– for example, rag, hemp and straw – that confer particular properties.
Recycling poses a special problem for the papermaker. For several
decades some grades have been made from predominantly recycled raw
material. Corrugating medium is a good example, and so also is board
where the internal plies of the board are from recycled material.
However the market has special quality requirements for some grades.
For example, photographic paper cannot tolerate blemishes or con-

Pulp and paper
taminants in the product, and certain food-wrapping grades have a tight

raw-material specification precluding the use of recycled raw material
in their manufacture.
Nevertheless, the industry has always carried out a recycling pro-
gramme, besides reusing its own mill waste, and recycling levels are now
increasing. Consider recent fibrous raw material figures for the UK. In
1984 43% of all fibre used was imported and 50% was waste paper pulp.
In 1999 the imported figure had fallen to 26% whilst the waste paper
pulp figure had risen to 65% (source: The Paper Federation of Great
Britain).
In 1998 the paper industry worldwide used close to 112 million
tonnes of recycled fibre (RCF) representing 44% of total usage. This was a
great increase over the 1970 consumption, where only 30 million tonnes
(or 23%) was used. A combination of social, environmental, technical,
economic and legislative factors have been behind the increase in RCF
utilisation, and this will continue to be the case.
The role of waste paper has gained respectability, moving from a
liability as a waste, to a valuable resource, serving as an asset. RCF pulp
can now be made to a uniform quality, without contaminants. This has
removed many of the obstacles to using the material in such a capital-
intensive industry that places big demands on high levels of efficient
machinery utilisation during the production process.
3.1.3 Recycled fibre (RCF) definitions
There have been many problems in defining the terms used in

the waste paper sector, not least being the use of the term ‘recycled’.
It is now recognised that it is necessary to state how much of the fibrous
content of the product is made from RCF in order to justify the use of
the term.
Her Majesty’s Stationery Office (HMSO) in the UK has studied this
problem in some depth, highlighting the wide range of political, com-
mercial, and other interests involved. In particular:
• extreme environmentalists calling for the abolition of virgin fibre

from the supply chain;
• papermaking opportunists offering ‘recycled’ paper made from
predominantly mill waste;

• virgin fibre manufacturers denigrating the very use of alternative

fibre;
• recycled paper manufacturers defending market positions by
insisting on hurdle rates as high as 75% recycled content to
prevent market entry by new players;
• government trying to reduce pressure on landfills (some 40% of
domestic waste is paper) by convincing the public that recycling is
environmentally sound.
To clarify the position, HMSO recently offered the following defini-

tions of commonly used terms:
• Virgin fibre: fibre derived from wood or sources such as bagasse

and straw, which are alternative fibres used to enhance paper
properties. Cotton linters and sawmill waste should not be
counted as recycled since they too are alternative fibre sources.
• Broke: waste paper that occurs during paper manufacture. It has
always been reused and this will continue. However, as it has not
been used by a consumer, it should not be classified as recycled
fibre.
• Pre-consumer/industrial waste: any fibre source that may be
counted as an industrial by-product. It encompasses such items as
printer’s trim, converter waste, reject materials and excess
inventories. This fibre source is valuable and easy to collect in
bulk. As a matter of good economics it should be directed back
into the papermaking cycle. There is no desire to see this source
artificially expanded to enable companies to satisfy the demand
for recycled paper. With improved business practices under
ISO 9000/BS 7750 and with better planning, and economic design,
and with shorter press run-up times, there is every possibility of
minimising but not eliminating this source of waste fibre.
• Post-consumer waste: fibre that has been used for its final and
intended purpose. It is the largest source but the most difficult to
collect. As virgin fibre prices rise, new techniques for segregating
and economic processing of this waste are emerging.
Using the guidance provided by these definitions, HMSO recom-

mend that, to qualify as recycled, a paper must contain at least 10% post-
consumer waste.

Pulp and paper
3.1.4 Waste classification
Almost any type of paper and board can be recycled, and compre-
hensive classification systems have been developed to ensure that
maximum commercial value is obtained from recovered fibre. Classi-
fication systems are not internationally standardised, which makes data
comparison between countries difficult.
The grading system produced by the Paper Federation of Great
Britain is shown in Table 3.1. Recycled fibre (RCF) differs from virgin
fibres in a number of ways:
• In most cases waste paper consists of a mixture of different types

of pulp fibre and other materials, such as mineral filler.
• Waste paper contains fibre that has normally undergone some
type of mechanical refining during the primary papermaking
process.
• RCF has been subjected to drying in the papermaking process,
and possibly in conversion – for example, heat-set offset printing.
• RCFs can have high contamination, in particular inks and stickies
(adhesives, lacquer, etc.)
Recycling fibres back into the papermaking process implies recon-

ditioning the material to its original virgin condition as far as the reuse
requires. However, some of the changes described are irreversible, par-
ticularly those caused by refining and drying. A complete return of the
fibre to its original state is not possible. Each time a fibre passes through
the manufacturing process it suffers strength and colour reduction,
although there is some evidence to say the strength loss is only in the first
few passes. Many industry participants believe there will always be the
Table 3.1 UK standard groups of waste paper

Group Waste paper type
1 Unprinted woodfree
2 Printed woodfree
3 Mechanical
4 Coloured woodfree
5 Newspapers and magazines (ordinary grade deinking)
6 New KLS and unused Krafts
7 Used Kraft and OCC (post-consumer)
8 Mixed and coloured card
Source: Paper Federation of Great Britain.

Table 3.2 Current use of RCF in the range of paper

grades in Europe, 1998
Item RCF content (%)
Newsprint 58
Printings/Writings 7
Tissue 64
Liner/Fluting 90
Cartonboards 52
Other 65
Overall average 45
Source: CEPI.
need to add some virgin fibre to make up for the strength losses in
the process, and to restore any loss of quality and runnability.
In general terms, recovery and reuse of RCF has concentrated on the
easiest and most economical waste paper to collect and recycle, and this
has been predominantly used in the lower-grade papers such as case
packaging and board materials. However, now that there is an increased
demand for recycled fibre, there is a tendency to use RCF in higher-
quality grades. Nevertheless, certain grades of paper and board will still
need to be made using a high proportion of new fibres as exemplified by
surgical papers, and by grades in contact with certain foodstuffs.
The net effect of all these factors in terms of end-use is shown in
Table 3.2, which provides a 1998 analysis of RCF utilisation by paper
grade for the EU (excluding Nordic countries).
Whilst the overall average for RCF content is around 50%, there are
wide variations according to grade. Most RCF has been used in the lower
paper grades such as packaging and board where visual and printing
properties are not so critical. Printings and writings show less than 10%
utilisation, and this segment is now receiving considerable attention, so
that it is here that much of the predicted growth in RCF utilisation is
anticipated.
The overriding objectives of recycling waste are to maximise the

recovery of reusable fibre and to minimise the foreign impurities known
as contraries.

Pulp and paper
Table 3.3 Effect of contraries in waste paper

Impurity Problem caused
Printing ink Reduction in stock brightness, increase in speckiness, worsening

‘stickies’ problem
Adhesives Blinding of paper machine clothing, reduction in equipment
efficiency resulting in stoppage, reduction in product quality
Fillers Reduction in quality of tissue products, reduction in yield and
strength
Wet strength agents Prevention of fibre separation at the pulping stage, loss of yield
Dyes Reduction in stock brightness, problems with colour matching
Staples, paper clips, Damage to stock preparation equipment causing stoppage
plastics, etc and reduction in stock and product quality
3.2.1 Contraries
There are three main groups of contraries:
1 Paper mill additives, such as minerals, chemicals and functional

aids.
2 Conversion process additives, such as printing inks, plastics, foil,
adhesives, and even staples and pins.
3 Miscellaneous waste items, such as food, sand and plastic.
Typical problems caused by these contraries are shown in Table 3.3.

Thus it can be seen that the elimination of contraries is of vital
importance in RCF and that it is a dominant factor. A typical process line
contains many of the following stages:
• Paper handling.
• Waste paper repulping.
• High-density cleaning.
• Coarse screening.
• Ink flotation.
• Light reject removal.
• Heavy reject cleaners.
• Fine screens.
• Pulp thickening.
• Pulp pressing.

• Dispersion.
• Flotation.
• Pulp thickening.
• HD pulp storage.
• Bleaching.
3.2.2 Deinking
Emphasis has already been placed on the removal of contraries,

but it is also worth highlighting the deinking process, or the removal of
ink and similar contaminants. Deinking is a selection of washing and
flotation techniques. In flotation, the first stage involves detaching the
ink from the paper. The fibre is processed under alkaline conditions to
bring about fibre swelling and to enhance ink release through saponifi-
cation. Depending on fibre characteristics required for the end product,
other chemicals such as sodium silicate, bleaching materials and chelat-
ing agents are used. The second stage accomplishes the removal of ink
from the fibre and takes place in the flotation chamber. Incoming pulp is
mixed with air bubbles which bring the ink particles to the surface. The
resulting foam which contains the ink is then removed.
In designing deinking equipment it is important to take into
account the effect of likely changes in ink formulations. Some of
these changes, ironically stimulated by environmental pressures, may
give rise to problems in deinking. A good example is the move in
the printing of newsprint from solvent-based to water-based flexo inks.
The problem with the water-based ink is that the resins used in the for-
mulation are alkali-soluble. Thus, on pulping under normal conditions
the resins solubilise leaving minute ink particles. These particles are
below five microns in size, and as they are hydrophilic, flotation
deinking is not effective. Wash deinking, which is designed to remove
small particles, also does not work as the water-based ink tends to
stain the fibres, and the very small ink particles become entrapped in
the fibre structure.
Chemicals in office copying, particularly from non-impact print-
ing, make the ink difficult to remove, and are causing the development
of new deinking techniques, including the use of enzymes to detach the
print.
It is possible to increase the quality and therefore the usefulness
of certain grades of waste paper by a process known as ‘fractionation’,

Pulp and paper
Table 3.4 Growth in world deinked fibre utilisation

Year . . . 1990 2000
Grade Million tonnes % Total Million tonnes % Total
Newsprint 5.5 40 15.0 48

Tissue 3.5 25 6.0 19
Packaging 2.0 14 2.5 8
Printing and writing 2.0 14 4.5 15
Market pulp 1.0 7 3.0 10
Total 14.0 100 31.0 100
Deinked fibre consumption will more than double in the decade and by the year 2000 it
will account for at least 20% of total RCF.
A significant proportion of the extra deinked tonnage will be used in newsprint (over
55% of the total). Printings and writings will overtake packaging and become the third
largest application for deinked fibre.
causing separation of long fibres from a waste mixture. The residual

shorter fibres may be usable in the middle layer of a corrugated
case. One of the weakest fibres is found in newsprint, acceptable
because a newspaper only has a short lifespan. Thus, recycled news-
papers are used together with magazine waste to make more newsprint.
By the same token it is not possible to make high-quality writing paper
from recycled newsprint (Table 3.4 shows growth in world deinked
fibre utilisation).
Brightness is one of the most important properties of paper,
particularly in the production of high-quality papers. In deinking,
therefore, close attention must be paid to bleaching. Brightness will be
affected both by the presence of ink, and by impurities such as
dyes in coloured paper and by lignin in mechanically produced fibres
used in some newsprint manufacture.
Bleaching of waste paper is not straightforward. All recycled fibres
will have undergone at least one drying process, which can adversely
affect their ability to accept additional bleaching. Metal ions may be pre-
sent and they can cause decomposition of bleaching chemicals. Besides
this, the wide mixture of different fibre types with varying histories
invariably found in waste paper will each have different bleaching
responses.
Waste paper processing is expensive. Depending on the final
quality required, which may attract additional chemical costs, and
including the cost of waste collection and transportation from urban
areas to pulp mills, RCF can be at least as expensive as virgin fibre.

An investment comparison would suggest that a bleached kraft

pulp mill would cost US$600 million for 1000 tonnes per day compared
to a deinking plant costing US$40 million for a capacity of 500 tonnes per
day. It is interesting to note that in the US it is common practice for gov-
ernment to offer significant tax concessions to encourage the building of
deinking facilities, and this has led to the appearance of a number of
merchant deinked pulp mills.
There are a number of components in the waste paper/recycling

business. They are:
• collection and recovery;

• sorting and disposal of discards;
• transportation;
• utilisation;
• residue/sludge disposal.
It is important to note that the term ‘recovered waste paper’ means

what it says – waste paper recovered from the total paper consumed.
The term ‘utilised waste’ paper means the percentage of waste paper
that is actually used in the product. While on a global basis of course
the two terms must be the same (assuming no stockpiles), this is not
necessarily true for industrialised countries. In Finland for example,
63% of the paper consumed domestically is recovered but, because
the home market is so small, this represents just 5% of the paper
manufactured.
Whilst traditionally there have been a number of waste paper mer-
chants handling some bulk grades – mixed waste and KLS, for example –
recovery has traditionally been under the control of the local authorities.
Utilisation is in the hands of the paper industry. This is in turn signifi-
cantly governed by the investment required and by consumer attitudes
and demand.
The term ‘The Urban Forest’ has been adopted to describe the vast
quantities of waste paper that are generated each day in major cities.
The analogy is a good one. Most pulp producers go to great lengths to
ensure a sustainable supply of cost-effectively produced wood of the

Pulp and paper
Table 3.5 US MSW waste generation, 1993

Material Million tonnes % of total
Paper and paperboard 70 37.8

Yard trimmings 30 16.2
Plastics 17 9.2
Metals 15 8.1
Food waste 12 6.5
Glass 12 6.5
Wood 12 6.5
Other 17 9.2
Total 185 100.0
Source: US Environmental Protection Agency.
Table 3.6 US recovery rates for selected components of MSW

Material % of total recovered Million tonnes recovered

Aluminium packaging 53
7.5
Steel packaging 46
Paper and paperboard 34 23
Glass containers 25 3
Yard trimmings 20 6
Plastics packaging 4 0.7
Source: US Environmental Protection Agency.
correct quality for use as a raw material. Forest management, with bene-
fits both to the papermaker and to the environment, has become an
integral part of the pulp-producing operation.
For exactly the same reasons, the ‘urban forest’ will require similar
investment and management. Because the life cycle of the urban forest
is shorter, it will respond more quickly to management control. The
municipal solid waste (MSW) generation statistics in the USA are inter-
esting, and highlight the large amounts of paper and paperboard in
MSW. The US MSW waste generation is shown in Table 3.5.
The progress in recovering the components of MSW is shown in
Table 3.6.
The US paper industry is now moving up the waste recovery stakes,
achieving 40% in 1995 and aiming at 50% by the year 2000. Once a deink-
ing facility is on line, a plentiful supply of recyclable paper is critical.
Mills may therefore try to build up a stock, leading to conditions of tem-
porary shortage.

The key force for RCF utilisation has been economics. It enables
mills and countries without abundant forest resources to compete effec-
tively with integrated producers of virgin fibre-based grades. The impact
of RCF on the competitiveness of mills can clearly be seen in the Western
European newsprint industry. Here the most cost-competitive produc-
tion is based on RCF and is located close to both RCF sources and final
customers. This has led to industry restructuring and relocation. Similar
developments are now taking place in North America.
There are other reasons. There is, for example, an urgent need to
divert the growing mountains of waste from costly and limited landfill.
This is a move further underpinned by legislation and by public concern
over the environmental impact of landfill causing contamination of
ground water and gas emission.
3.4 The structure of the waste

Waste from commercial sources in Europe has traditionally

been collected by waste paper merchants, often held captive by big
paper companies who have organised their business on waste-based
products. It is interesting to see the collection of waste newsprint
similarly organised on a local basis by a main producer of recycled
newsprint. Strong competition for waste paper supplies and high
waste paper prices are forcing mills to re-examine the way in which
they buy waste paper, and to arrive at a better understanding of the
entire collection system. Nevertheless it is believed by many that the
collection of printing and writing paper from offices is underdeveloped
in Europe, which lags behind the USA in this respect.
The global recovery of waste paper has been steadily increasing
from a figure of 49 million tonnes in 1980 to over 110 million tonnes in
1998.
The historical trends for recovery from the main regions of the
world are shown in Table 3.7.
It is interesting to note the improvement in the N American recov-
ery figure since 1980, coming more in line with western Europe by 1993
and exceeding that of Asia from the early 1990s. Table 3.8 shows world-
wide RCF utilisation by region.

Pulp and paper
Table 3.7 Worldwide waste paper recovery (% of total

paper consumed)
Year North Western Asia World
America Europe
1980 25.9 31.7 34.5 28.5

1985 26.1 34.0 36.5 30.8
1990 33.3 37.7 39.2 35.5
1993 39.4 41.9 37.0 38.2
1998 44.0 48.0 39.0 48.0
Table 3.8 Worldwide RCF utilisation by region, 1998

Region Paper production (million tonnes) RCF utilisation (million tonnes) %
Asia 86.0 43.2 50

Latin America 13.7 7.2 53
W Europe 81.4 36.4 45
Africa 3.0 1.0 33
Australasia 3.5 1.5 43
N America 104.6 38.9 37
E Europe 8.8 2.6 30
World 301.0 130.0 43
Source: FAO, National Associations.
North America, western Europe and Asia dominate the picture as

paper producers, and are clearly major RCF users, but Asia and western
Europe produce higher waste utilisation rates largely because they have
poor forestry resources, and so are big pulp importers.
Differences in RCF utilisation also help to explain the main trade
flow of waste paper from North America to Asia (see 3.4.3).
On an individual country basis, the leaders in utilisation are:
• Taiwan 90%
• Mexico 93%
• Spain 81%
• Netherlands 71%
• Korea 74%
• UK 72%
• Germany 61%
• Japan 55%
• Switzerland 68%
• Australia 58%

• Thailand 59%
Source: FAO (excludes countries producing less than 500000
tonnes p.a.).
There are few other uses for recovered paper. The largest alterna-
tive use is in the manufacture of moulded egg boxes and fruit trays.
Alternative uses are expected to expand, driven by the desire to divert
material from landfill, and could include wastepaper as a fuel.
3.4.1 Relative importance of RCF production
Both RCF and virgin fibre consumption will increase steadily over
the next five years. There is little doubt that recycling pressures, arising
from further legislation and from environmental awareness, will mean
that the use of RCF by the paper industry will continue to take an
increasing share of total fibre supply. During the next 5 years RCF utilisa-
tion is forecast to grow at 6% per annum, three times the rate of virgin
fibre. This will result in RCF consumption approaching the same volume
as virgin pulp use by the year 2005. Table 3.9 shows worldwide growth of
RCF utilisation by the paper industry.
A shift of this magnitude will force many changes in the industry,
resulting in substantial restructuring. It was estimated by the Finnish
engineering and consultancy group Jaakko Poyry in 1992 that the waste
paper disposal burden (the difference between paper consumption and
waste paper recovery) will grow by about 20%, or 32.9 million tonnes
over the period 1990 to 2005. This difference reflects the efforts to
increase the recycling of waste paper, against a projection of paper con-
sumption growing by 45% (3% pa) during that time. In North America,
the disposal burden will decline slightly, reflecting the dramatic moves
Table 3.9 Worldwide growth of RCF utilisation by the paper industry

Year RCF Virgin pulp
Million tonnes % of total fibre Million tonnes % of total fibre
1985 59 30 141 70
1990 84 35 157 65
1995 114 39 175 61
2000 151 45 187 55
2005 190 49 197 51

Pulp and paper
to increase waste paper recovery, whilst in Asia and Latin America the
burden will grow significantly.
There is little doubt that environmental concerns backed by both
legislation and certain national initiatives will continue to exert pressure
to further increase RCF utilisation.
3.4.2 Environmental and economic impact
A study by the Austrian Institute of Applied Systems Analysis

(IIASA) raised serious questions about how far recycling should be
taken. Broadly, they found that maximum recycling increases the con-
sumption of fossil fuels, which in turn increases emissions of sulphur
dioxide and carbon dioxide. The deinking process also consumes more
energy than a self-sufficient modern kraft mill, and transportation of
waste paper over increasingly greater distances adds to the energy
consumption.
IIASA do not imply that recycling is bad for the environment. They
suggest there is an optimum level of recycling beyond which the net
environmental impact becomes negative.
Waste paper is also regarded as a potential fuel. Scandinavian work
has shown that biofuel waste paper has a high calorific value and a rela-
tively low environmental impact. The debate of recycling versus energy
recovery is not new. Paper deemed unsuitable for recycling has been
burned by the forestry industry boilers for some time. It appears to be
a good substitute for coal and other fuels, particularly when it has
been pelletised. It is anticipated that low-quality and non-recyclable
waste paper will become a standard solid fuel for small-scale power pro-
duction. The heat value is usually above that of bark (20MJ/kg) but
below coal (30MJ/kg).
There is considerable concern about how progress by RCF could
discourage investment in the industry, and could militate against
new plantings. It could also reduce the profitability of forestry opera-
tions to a point where they can no longer sustain forestry management
activities.
3.4.3 Trade in waste paper
Global patterns. International trade in waste paper, of which there

is a significant amount between North America and the Pacific Rim

Table 3.10 Worldwide waste paper imports by region,

1998
Region Waste paper imported
Million tonnes % of total
Asia 8.8 42
W Europe 7.0 34
N America 2.7 13
Latin America 1.8 9
Other 0.5 2
World 20.8 100
Source: FAO.
Table 3.11 Worldwide waste export by region, 1998

Region Waste paper exported
Million tonnes % of total
N America 7.6 42
W Europe 8.1 45
Asia 1.6 9
Other 0.7 4
World 18.0 100
Source: FAO.
countries, is worth US$ 2 billion p.a. The traded volume is 21 million

tonnes p.a., which is about two-thirds the volume of pulp, and a quarter
the volume of paper. The amount of waste imported on a regional basis
is shown in Table 3.10.
Seven countries import in excess of 1 million tonnes p.a. They are
shown with their share of the world total.
• Korea 10%
• Canada 11%
• Netherlands 6%
• Mexico 6%
• France 6%
• Germany 5%
• Taiwan 5%
The worldwide waste export is shown in Table 3.11.

Pulp and paper
There are relatively few countries with the ability to export signifi-
cant quantities of waste paper. The lead countries are shown below, with
their proportion of the world total.
• USA 39%
• Germany 16%
• Netherlands 7%
Source: FAO
The USA and Germany are the two main exporters of waste paper
and between them they account for about 55% of the world exported
waste paper.
As the US consumption reaches 50%, targeted for the year 2000,
their ability to export is expected to diminish significantly.
3.4.4 Waste paper pricing arrangements
The price of waste paper depends on a number of factors, but as

with other commodities, the balance of supply and demand will have
the biggest influence.
Prices vary widely according to grade, as illustrated by the following
prices prevailing in Chicago in the middle of 1995 (Source: Pulp and
Paper Week).
Table 3.12 clearly shows the range of prices, from US$ 650 (hard
white envelope cuttings) to US$ 135 (mixed paper). Prices exhibit
Table 3.12 US waste paper prices – by grade f.o.b. seller’s

dock, June 1995
Grade $/tonne
Hard white envelope cuttings 650

Hard white shavings 560
Computer printout 460
White ledger 430
Sorted coloured ledger 320
Coated book stock 310
New double-lined kraft 260
White blank news 260
Corrugated containers 180
News 170
Mixed paper 135

similar trends to the sharp cyclical pattern of pulp prices, possibly being
more volatile.
Since 1993, export waste paper prices have risen dramatically and
by 1995 were close to US$ 200 per tonne. In addition to the demand
arising from the buoyant state of the paper industry, a number of other
factors put pressure on prices. In 1994 Germany moved to reduce
waste paper collected by 15% in order to stabilise prices and reduce
loss-making exports. Other big influences have been the start-up
of major newsprint capacity based heavily on waste paper, together
with a high demand from the Far East, and a general move to build up
stocks following low levels in 1992/93 when supplies were plentiful.
The upward pressure on waste paper prices may well remain in the
long term. Main exporting countries will continue to need more waste
paper domestically in order to meet ambitious utilisation targets. This
could lead to shortage for export followed by a price escalation. With
timber shortages also predicted because of environmental concerns
imposing constraints on logging, virgin pulp prices could also be under
pressure.

4 Glass
David Moore

4.4.2 Forms and availability of cullet
4.4.3 Cullet recycling arrangements
4.4.4 International trade in cullet
4.4.5 Cullet pricing arrangements

Glass has been found to occur naturally as volcanic glass, obsidian
and around lightning strikes in the desert. Glassmaking first began some
5000 years ago in the Middle East probably because the main ingredi-
ents, silica, in the form of quartz sand, and alkali from wood ash were
readily available. The raw materials were melted in a furnace to produce
a solid amorphous mass which was then crushed before being shaped
around a friable core. Further heating then gave the final artefact.
Glasses were used as replacements for semi-precious stones and meth-
ods for making a wide range of colours were developed. Because of
the high value placed on glass and the energy needed in its production
recycling has always been a feature of its use. There have been recent
finds from shipwrecks in the eastern Mediterranean Sea dating back
to Roman times which feature entire cargoes made up of broken glass,
indicating a flourishing trade.
Church building in the Middle Ages led to a use of glass in windows
and the development of the flat glass industry. Industrialisation led to an
expansion of the glass industry around the world and its eventual adop-
tion as a packaging medium. The modern glass industry is dominated by
bulk production of soda–lime–silica glass which is used in flat glass, con-
tainer glass and bulk glassware. Different compositions are used to meet
the particular working characteristics the forming process requires and
the final properties of the product.

Glass is a very versatile material and its properties can be tailored

by adjusting the composition to meet the requirements of the end user.
Hot glass can be formed by several different methods and once solidified
can be ground, etched and highly polished. As well as the common uses
in packaging and as window glass it has found a number of other uses:
glass fibre is used as thermal insulation, as a reinforcement in plastics
and cements, or in optical communications; glass is used in the pro-
duction of cathode ray tubes, for slow-release drug delivery and as a
substrate for magnetic storage devices; finally, by introducing small
crystals into the structure, glass ceramics with controlled thermal
expansion and exceptional mechanical properties can be made.

There are three main types of glass:
1 Soda–lime–silica glass is the commonest and is used in flat glass,

packaging and bulk tableware. The composition of this glass varies
depending on its final use and how the glass is to be formed. A
typical flat glass composition is: 72.6% SiO2, 13.6% Na2O, 8.6% CaO,
4.1% MgO, 0.7% Al2O3, 0.3% K2O, 0.17% SO3. Container glass has a
wider-ranging composition: 71–73% SiO2, 12–14% Na2O, 9–12%
CaO, 0.2–3.5% MgO, 1–3% Al2O3, 0.3–1.5% K2O, 0.05–0.3% SO3.
2 Borosilicate glass is used in some glass fibres, laboratory equip-
ment and in thermal-resistant tableware, the familiar brand being
Pyrex.
3 Lead crystal glass is used in high-value glassware, where the lead
content can be as high as 36% PbO. Health concerns associated
with lead have meant there have been a number of lead-free
compositions developed recently with the same inherent
properties.
There are also other special glass types such as TV glass, heavy -
metal fluoride glass used in optical fibres, silica glass used in high-
temperature applications and phosphate glasses used in sealants.
The colour of glass can be controlled by adjusting the oxidation
state of different metal oxide additions and in the choice of raw ma-
terials. Sand, the main raw material, has various impurities, the most
important being iron. Ferrous iron oxides give various shades of green,
while ferric iron commonly gives blue. Amber or brown glass uses car-
bon additions. A colour change in a container furnace can take several
days of lost production to implement. The packaging industry is
responding to customer demand for faster response times by introduc-
ing the colour at a later stage, just before the containers are formed.
Colour changes can then take a few hours.
Glass is made by melting raw materials together in a furnace. Very

small volumes up to around 2 tonnes/day are melted in crucibles or pots.
The much larger industrial scale involves melting the batch continuous-
ly in a tank furnace where individual furnace capacities are 100–350
tonnes/day. Furnaces generally still use fossil fuels as the energy source,

Glass
but electric melting has been adopted in some situations and oxy-fuel
firing is a more recent development. There are constant pressures on
glass makers to comply with legislation on pollution abatement and
emission of greenhouse gases. Modern furnaces tend to have campaign
lives of more than ten years before refractory wear necessitates a rebuild.
An alternative to melting is the low-temperature route using the sol-
gel process. This has been used to produce novel glasses for value-added
applications such as optoelectronic components, but is also being devel-
oped as a coating for glass containers to improve their mechanical prop-
erties and reduce the overall weight. In combination with organic resins,
nanocomposite ormosils can be made by the sol-gel route.
Containers are produced by taking a set weight of glass, a gob, and
then following a two-stage process. A parison is formed in one mould
and then inflated with compressed air inside a second mould. The bottle
or jar is then removed from the mould and conveyed through a lehr
where it is annealed. The basics of this forming process have been estab-
lished for some time now but there have been minor developments
recently which have helped reduce the overall weight of a container: a
necessity if glass is to compete with plastics and metal in the packag-
ing market. Automatic inspection before and after the lehr detects any
faulty containers which are rejected and sent back to the internal cullet
handling system. Getting more items packed rather than rejected is seen
as being the best method to save energy and cut waste, but this reduces
the amount of available internal cullet and increases the proportion of
external cullet.
The overwhelming majority of flat glass is produced by the float
process, initially developed by the UK glass manufacturer Pilkington in
the late 1950s. This revolutionised the production of window glass and
has been licensed around the world. Glass from the furnace is continual-
ly poured onto the surface of a molten bath of tin where it spreads and
cools. As it hardens the edges are gripped and pulled from the tin bath
with a stable thickness. The glass then travels through a lehr to relax the
stresses from the cooled glass, the edges are removed and recycled and
it is then cut into sheets for transportation. The speed at which the glass
is pulled from the tin bath determines its thickness. The unique atmos-
phere within the tin bath also allows special coatings to be deposited on
the surface.
Other forming processes for glass products include: pressing, for
TV panels and tableware; extrusion, for fibres and tubes; casting, for

Table 4.1 EU glass production by sector (1000 tonnes)

Flat glass Container Tableware* Fibres Others**
1996 6390 17322 1041 487 1526

1997 6893 17316 1046 475 1557
1998 7277 17676 1025 506 1622
* Excludes Spain.
** Others include pharmaceutical glassware, sealing glass, TV and VDU tubes, optical
lenses, optical fibres, lighting glassware (bulbs and tubes), glass bricks, lead crystal and
studio glass.
Source: CPIV (Comité Permanent des Industries du Verre de l’Union Européenne).
optical lenses and telescope mirrors; and hand blowing, for low
production-run items and studio art. Table 4.1 shows the quantity of
glass produced by each sector.
The raw materials for glassmaking are readily available throughout

the world, placing few obstacles in the way of anyone wanting to estab-
lish production according to local market demands. Capital investment
is the main issue for anyone wanting to establish a glass manufacturing
operation. The typical capital cost of a new container furnace, excluding
the pollution abatement equipment, would be between £3 million and
£5 million; substantially more for a float furnace. A typical float or con-
tainer furnace will run continuously for more than ten years before it is
rebuilt. A rebuild takes the furnace out of production for around two
months, a time when no glass is being made. A lot of the capital is tied up
in the refractories used in the campaign. Pollution abatement measures
will add to capital and operating costs. Some manufacturers have
converted to all-oxygen firing to comply with abatement laws but also
to make savings on expenditure on a regenerator (oxy-fuel firing, which
involves the replacement of normal combustion air by oxygen, is a
method for reducing nitrous oxide emissions). A cheap source of elec-
tricity is required for the production of oxygen to keep operating costs
down. Around 70% of total energy consumption of a factory is used to
melt the glass.
The flat glass market is dominated by four major international
manufacturers, all using the float process, who account for 60% of sales.

Glass
Pilkington has around 15%, Asahi Glass 21%, Guardian Industries 13%
and Saint-Gobain 11%. PPG is mainly based in USA and is the next
largest with around 9% of sales. There are also a number of smaller
companies using sheet glass production techniques.
The container industry is also dominated by a small number of
global manufacturers, the biggest and only truly global operation being
Owens-Illinois. Saint-Gobain are second on a worldwide scale but
largest in the European Union. There are some major regional compa-
nies and a vast number of smaller companies serving their own domes-
tic markets. In some respects the type of container glass produced is
a function of what the filling is, especially drinks. A wine-producing
nation will make more green glass and a proportion of this will be
exported, while the UK glass industry, for example, creates mainly
clear glass, e.g. the milk bottle and the whisky bottle. Without a native
wine industry, and with EU regulations demanding bottling at source,
there is less demand for green glass in the UK.
Fibre is also produced by a limited number of large producers
and some small national firms. Saint-Gobain is a major producer as are
Corning, PPG Industries and Owens-Corning. Domestic glassware fol-
lows the same pattern but with a more limited international spread of
companies. Lighting glass producers are either owned by multinational
lighting companies or are small independents with supply contracts
to the local manufacturer. Most other glass types are domestically pro-
duced with varying degrees of export opportunities. Western European
glass container production can be seen in Table 4.2.
Cullet, the term used for glass for recycling, has been traded for over
2000 years.
Cullet is continuing to establish itself as the dominant component

in glassmaking, and the fuel savings alone are a compelling reason for
further inroads to be made. This incentive has been reinforced by the
introduction of ‘carbon taxes’ in many countries. The advantages of
using cullet in the glass-making batch include a reduction in furnace

Table 4.2 Western European glass container production

(bottles, jars and flacons), tonnes (Switzerland and
Turkey in addition to the EU countries)
Country 1998 1997
France 3785142 3642322

B + DK + IRL + NL 1501154 1447710
Germany 4323180 4293693
Italy 3046948 2929182
UK 1852100 1969600
Greece 95000 92500
Portugal 762977 751221
Spain 1816151 1684208
N + S + FIN 245993 268370
Austria 306081 307294
Switzerland 158041 166177
Turkey 469200 449840
TOTAL 18361967 18002117
Figures aggregated for confidentiality:

B + DK + IRL + NL Belgium, Denmark, Ireland and
Netherlands.
N + S + FIN Norway, Sweden and Finland.
Source: FEVE, European Container Glass Federation.
energy consumption of 2.5–3% for every 10% of cullet used. Cullet pre-
heating with the rest of the glass batch by waste heat before it is delivered
to the furnace may allow further fuel savings.
In terms of furnace operation, high cullet levels can also give other
benefits such as low particulate emissions. Cullet is easier than batch to
preheat. The output of the furnace can also be greatly increased, but
there are a number of drawbacks to the manufacturer when operating at
high cullet levels.
• Metallic impurities such as bottle caps or foils from wine bottles

can cause serious refractory damage and shorten the furnace life.
• Aluminium caps and foils act as strong local reducing agents
causing silica of the glass to reduce to silicon metal. The silicon
forms into microscopic beads, which significantly reduce the
mechanical strength of the glass, due to stresses resulting from the
high difference of thermal expansion coefficient between silica
and silicon.
• Ceramic inclusions, such as earthenware or pottery that are
insoluble in the glass melt will appears as ‘stones’ in the final

Glass
product and lead to rejects. This has been a problem in Germany

where ceramic bottles are fairly common.
• At high cullet levels the control of composition and therefore the
physical characteristics of the glass melt can be reduced, possibly
leading to final product quality problems. The variable content of
organic matter (food residues, paper labels, plastics) in particular
can cause problems of oxidation–reduction state leading to colour
and refining difficulties.
• The organic content in cullet can become an issue with
neighbours to the glass factory. One factory testing a cullet
preheating system had to cease using unwashed foreign cullet
because of the smell.
In addition to the substantial energy savings possible with cullet

usage, there are a number of other important associated environmental
benefits. Emissions of CO2, SOx, NOx and dust are greatly reduced thanks
to lower fuel usage and furnace temperatures. Emissions of other
volatile substances may also be lower due to the reduced temperatures.
However, impurities in the cullet may lead to higher emissions of HCl,
HF and metals. This is particularly relevant in areas with high recycling
rates where impurities can build up in the recycled material. Many raw
materials in glass making are carbonates and sulphates, which release
CO2 and SOx on melting. The increased cullet usage reduces these raw-
material-derived emissions and reduces the consumption of virgin raw
materials.
Some proportion of the recovered glass will not be recyclable, and
alternative uses have been the focus of government-backed research.
Suggested options include simulated marble tiles and aggregate for
road-building ‘glasphalt’.
4.4.2 Forms and availability of cullet
Nowadays, apart from the in-house sources, the forms of cullet

available for glass making are those from the various bottle bank and
waste recovery schemes set up by private enterprises, national and local
authorities.
The use of cullet in a glass batch can significantly reduce energy
consumption. Its use is generally applicable to all types of furnace, i.e.
fossil-fuel fired, oxy-fuel fired and electrically heated furnaces. Most

internal cullet is recycled. The main exceptions are continuous filament

glass fibre, which is not considered possible to recycle due to quality
issues, and stone wool and frit production. The base internal cullet level
in the batch will usually be in the range of 10 to 25%. Cullet has a lower
melting energy requirement than the constituent raw materials. The use
of cullet generally results in significant cost savings as a result of the
reduction in both energy and raw material requirements.
A distinction should be made between internal cullet (recycled
glass from the production line) and external or foreign cullet (recycled
glass from consumer or external industrial sources). The composition of
foreign cullet is less well defined and this limits its application. High final
product quality requirements can restrict the amount of foreign cullet
a manufacturer can use. Typically, flat glass for recycling goes to the
container sector rather than feeding back into the float furnace. The
domestic glassware industry has quality considerations which generally
prevent the use of external cullet in the process. Internal cullet usage
is limited by the availability of cullet of the correct quality and
composition.
4.4.3 Cullet recycling arrangements
The container glass industry can use significant quantities of for-

eign cullet from bottle recycling schemes. Cullet use in container glass
production varies from under 20% to over 80% (see Table 4.3), with an
EU average in the region of 48% in 1998. Recycling rates vary widely
between member states depending on the schemes in place for post-
consumer glass collection. High-quality container glass products (e.g.
perfume bottles) have lower cullet levels than standard products.
For the manufacture of flint (colourless glass) only very low levels
of coloured cullet can be tolerated since coloured glass cannot be
decolourised. Colourless glass can be used in amber or green glass
batches without any adverse effects. Recycling schemes are, however,
more effective where colour separation is included. Throughout the
European Union there are ample supplies of green and brown cullet;
however, flint cullet tends to be less common and because of this situa-
tion furnaces melting coloured glass operate at higher cullet levels. The
situation varies significantly between member states due to regional dif-
ferences in glass production and usage. It is a problem in the UK since

Glass
Table 4.3 European glass container recycling, 1996 and 1998

Country 1996 1998
Tonnes National recycling Tonnes National recycling
collected (1) rate (%) collected (1) rate (%)
Austria 206000 n.a. (3) 203000 86

Belgium 224000 66 221000 75 (2)
Denmark 122000 (2) 66 120000 63
Finland 33000 63 36000 69
France 1400000 50 1650000 55
Germany 2839000 79 2773000 81
Greece 39000 29 40000 27
Ireland 43000 46 36000 37 (2)
Italy 894000 53 810000 37
Netherlands 380000 81 385000 n.a. (3)
Norway 40000 75 43000 81
Portugal 120000 42 120000 42
Spain 456000 35 567000 41
Sweden 120000 72 143000 84
Switzerland 259000 89 281000 91
Turkey 44000 12 100000 31
UK 420000 22 476000 24 (2)
TOTAL 7639000 8004000
(1) From the general public and from bottlers.

(2) Provisional figure or estimate.
(3) Not yet available.
The recycling rate is calculated from a count of the tonnage collected divided by the total
tonnage produced. Glass packaging consumption was less in 1998 but the proportions
collected had increased. Countries with extensive recycling facilities such as Holland
recycle very high percentages; to attain this in the UK it has been said that a bottle bank
would be needed on every street corner. Other countries such as Germany have legisla-
tion on packaging waste and its collection.
Source: FEVE, European Container Glass Federation.
the bulk of production is flint glass, whereas a substantial proportion of

cullet is coloured because it is derived from imported wine and beer
bottles. Consequently furnace cullet levels in the UK are on average
lower.
The trend to nonreturnable or one-trip bottles began in the 1970s
around the same time as the first bottle bank schemes began in Europe.
The amount of glass collected from bottle banks has increased ever
since.
Bottle bank cullet provides some quality issues with the container
glass maker. Variation of colour, especially green, may affect the glass
batch composition and the colour balance of the glass being made. Lead

foil seals on wine bottles have been phased out over the past five years,
ending the major source of contamination from bottle bank sources.
Lead could accumulate in pools at the bottom of the tank furnace and
drill through the refractory floor of the furnace, seriously affecting pro-
duction. Some lead was also present within the glass and there were con-
cerns about leaching into the food or drink in the container.
Glass ceramics can also be a major problem to the container
glass manufacturer. Its thermal expansion differs greatly from that of
soda–lime–silica glass and leads to rejected ware when it is discovered.
The trouble for the cullet collector is that it is very hard to differentiate
between the two different materials and the person depositing glass
may not be aware of any difference.
Consumer education has also been an issue: having succeeded in
raising the identity of the bottle bank, the new message that they are not
just for bottles but also for jars has had to be made in some countries.
The European Union Directive on the Disposal of End of Life
Vehicles will place greater pressure on the recycling of automotive com-
ponents of which glass made up 70000 tonnes per annum. The recycling
of television screens and VDU tubes is also being addressed by the
EU, and industry committees have been set up to resolve the technical
issues.
Lead crystal cullet if not used in-house has traditionally been sold
to the network of studio glassmakers and craftsmen. This has the benefi-
cial effect of reducing studio worker’s exposure to the lead compounds
used in making up the batch.
The 1998 figures for the UK can also be broken down into indi-
vidual colours. On average, clear glass has 12% recycled content; amber
(brown) 19%; and green 67%. As the majority of glass containers pro-
duced in the UK are made with clear glass there is little spare capacity for
the many thousands of tonnes of green glass collected across the coun-
try. More than 550000 tonnes of green glass are imported filled into the
UK each year, compared to the 250000 tonnes of green glass manufac-
tured. In 1998, 80000 tonnes of green cullet were exported. The glass
container manufacturers also recycle a significant amount of flat glass
annually (95000 tonnes in 1998) into new glass containers. Table 4.4
shows the UK bottle bank growth, 1990–96.
Excess green is not seen as a problem on continental Europe where
wine and beer bottle manufacture can absorb available supplies of
cullet.

Table 4.4 UK bottle bank growth 1990–96
1990 1991 1992 1993 1994 1995 1996
Glass recycled (tonnes) 372451 385387 459076 501598 491817.5 501427 518538
National production of glass 1822524 1845898 1742454 1714264 1784760 1885542 1951192
Percentage of glass recycled 20.5 20.9 26.3 29.3 27.5 27 26.6

Number of districts with bottle bank sites 444 448 456 457 458 459 446
Number of commercial bottle bank sites 3566 4020 3963 4854 4793 5379 4995
Number of public bottle bank sites 5842 7155 8703 10965 12858 14257 15061
Source: British Glass.
Glass
Chapter 4 / page 11
4.4.4 International trade in cullet
The cost of transportation and the relatively low value of raw mate-
rials have meant that there is only a limited international trade in cullet.
As more national and local waste recovery schemes are introduced, the
cost of cullet will decrease. In the same way as glass industries use local
raw material sources, cullet will tend to be recycled locally. The only pos-
sibility of major international trade is where there are imbalances in
markets such as the UK. The problem may be to find suitable alternative
uses if the glass cannot be reused in containers.
4.4.5 Cullet pricing arrangements
Transportation costs, local demand and the recycling rates influ-

ence the price of cullet. Prices can vary depending on the local market.
For example, in 1996 Coors accepted and paid for crushed brown glass at
$40–$50/ton delivered. However, clear (flint) and green cullet were only
worth $15.00/ton delivered, because Coors uses primarily brown glass.
Americans buy a lot of imported beverages in green bottles but do not
then use green bottles for domestic packaging so there is little support
for green prices. In 1994, for instance, Owens-Brockway paid $40/ton for
clear container glass, $20/ton for brown container glass but only $5/ton
for green container glass. UK cullet prices are shown in Table 4.5.
The market for cullet may be supported by levies on the sources
of packaging waste imposed by national governments or local author-
ities. In the UK a scheme has been introduced under the Producer
Responsibility Obligations (Packaging Waste) Regulations 1997, based
on EU regulations on packaging waste, which embodies the ‘polluter
pays’ principle. A Packaging Waste Recovery Note (PRN) demonstrates
that a specific tonnage of packaging waste has been recovered or
recycled by a particular reprocessor. The funds raised by obligated
businesses purchasing the PRNs are used to develop further recycling
Table 4.5 Representative UK cullet prices (March 2000)

Colour Price/tonne delivered
Green £0–£20.00
Flint (clear) £28.50
Amber (brown) £25.50
Source: Recycling World.

Glass
infrastructure. Figures released by the glass container industry in early

2000 showed that glass PRN income fell from £4.9 million in 1998 to £2.6
million in 1999, a drop of 47%. The majority of funds raised were spent
on the glass collection system, with 64% of 1999 revenue allocated by
container manufacturers to supporting the prices paid for cullet and
purchasing bottle banks. Other countries in the EU have introduced
their own mechanisms to deal with this, either through a green spot on
the packaging indicating a fee has been paid for the item to be recycled,
or through kerbside collection and sorting of domestic waste.

1 The European Union
Robert Barrass and Shobhana Madhavan
1.1 The recycling industry and environmental regulation
1.8 Impacts of environmental policies on the recycling industry
1.10 Conclusion
References
European Legislation

1.1 The recycling industry and
environmental regulation
In EU member states, environmental regulation operates within

the legislative framework enacted under the Treaty establishing the
European Community, and in the context of other policies which
affect – and should take account of – the environment (see Barrass
and Madhavan, 1996). European environmental legislation specifies
(inter alia) environmental performance criteria for environmentally
sensitive industrial activities, emission standards for pollutants, and
quality standards for the receiving environment. The legislation is
normally in the form of directives, which establish objectives and leave
to the authorities in member states decisions as how the objectives are
to be achieved. Some legislation (for example on shipment of waste) is
in the form of regulations, which directly specify the measures to be
taken.
Environmental regulations affecting the recycling industry include
measures designed to avoid hazards to health and to limit damage to
the environment, and also the special provisions which are made for
management of wastes. The latter can be controversial when applied to
recycling operations, because the material being processed ceases to be
waste. While policy makers tend to favour recycling over final disposal,
their ultimate preference is for the generation of waste to be avoided
altogether. The key environmental consideration is the impacts of alter-
native options, which include indirect effects, such as those of transport,
land use and energy and water consumption. The regulatory authorities
have also to take account of economic considerations: some material
recycling is profitable and purely market driven, while in other instances
disposal to landfill may be a lower-cost option. Policy makers thus have
to decide the extent to which their intervention is justified, and what
form it should take; and industry in turn has to respond, both in accom-
modating to the regulations and in seeking to influence the regulatory
environment.
The recycling industry is generally well established in the EU,
particularly in the northern member states (see Table 1.1, ‘Structure of
the recycling industries in the EU’). However, the recycling of plastics –
which usually are more complex than other materials – is not well
developed. Recycling activities (with the exception of metal processing)
tend to be integrated between the various stages of the operation, from

Table 1.1 Structure of the recycling industries in the EU
Materials Level of development Industrial organisation Role of the private and Degree of vertical
public sectors integration
NON-FERROUS High throughout the EU Numerous local and regional Totally private Low
METALS operators (collection and
sorting), SMEs for
Chapter 1 / page 2
reprocessing.
FERROUS High throughout the EU Numerous local operators Totally private Higher on the Continent than
METALS (collection and sorting), less in the UK
numerous regional ones.
PAPER High throughout the EU Few operators. Regional basis: Private, with public High from processing
Part 4: The regulatory framework
close link with paper participation in local onwards

manufacture firms. collection.
PLASTICS Recently established industry Very few operators; very close Public intervention in local High from processing
in Italy, Germany, France and links between sorting and collection; processing is onwards.
the UK. Very little processing/reprocessing. private.
development in the rest of the
EU.
GLASS High throughout the EU, Regionally-based operators; Generally private; some Generally high, especially in
except in Greece and Portugal close links with glass public involvement with the north of the EU.
where currently being companies collection.
developed.
TEXTILES Well-established industry in Very few operators (regional Private, with some None
the EU, especially in Germany, basis with very widespread voluntary and public
France, the UK, Belgium, customers). sector intervention in
Denmark, the Netherlands, collection.
Italy.

Source: European Commission, The Competitiveness of the Recycling Industries, Brussels, European Commission, 1999, p. 21.
The European Union
collection and sorting to reuse, and with close involvement of the public
sector.
In contrast, the metal processing industry tends to be fragmented.
Collection and sorting are undertaken by numerous local and regional
operators, and – particularly for non-ferrous metals – much of the
reprocessing is undertaken by small and medium enterprises, with
a low degree of vertical integration between stages of the recovery
and recycling process. This fragmentation may cause difficulties for
environmental regulators, and also for the industry itself in responding
to regulation, in areas such as consultation and performance
monitoring.
An important function of public policy is to ensure that markets

function properly, so that suppliers and purchasers are adequately
informed and able to respond to economic incentives. Furthermore,
with appropriate incentive structures the market mechanism can be a
powerful ally of environmental management: this is a prominent feature
of the European Union environmental action programme (European
Commission, 1992), which includes a chapter entitled ‘Getting the
prices right’.
There is thus a strong public interest in ensuring that recycling is
not inhibited by market distortions. However, the markets for recyclable
materials do not always operate smoothly, because:
• prices are often extremely volatile;

• the recyclable content of waste can vary;
• collection and sorting can have high costs;
• firms do not necessarily give high priority to maximisation of
revenue from their wastes or by-products.
To address the problem of price volatility, the UK government has

undertaken to consider official encouragement for a futures market in
recyclables (DETR, 1998).
There are several obstacles to the wider use of recycled materials
(identified in European Commission, 1999, p. 11). These include:
• Product and process standards which – either directly or indirectly

– exclude the use of recycled materials.

• The negative image of waste materials, which can affect the confi-
dence of the public and of insurance and credit institutions.
• High administrative costs in the use of recycled materials, includ-
ing authorisations and shipment documentation.
• Regulatory restrictions on the circulation of recyclable waste (for
instance Regulation 259/93 on shipments of waste, discussed
below), which prevent the recycling industry from achieving
economies of scale.
• Prices charged for the landfill of waste, which (in some EU
Member States) do not reflect the true environmental costs, and
thus give an economic disincentive for recycling.
Measures that might mitigate these obstacles include the

following:
• Consistency and simplification of regulation, where necessary

distinguishing between wastes and material for recycling.
• Agreements between public authorities and enterprises to
facilitate recycling.
• Procurement specifications which favour (or at least do not
discriminate against) the use of recycled materials (a number of
EU countries already have these for public sector purchasing).
• Increased charges for landfill.
With respect to the last of these, Article 10 of Directive 1999/31/EC

on the landfill of waste obliges Member States to ensure that the price to
be charged for the landfilling of waste takes into consideration the costs
of establishment, operation and closure of the landfill site, and its after-
care for a period of at least 30 years. A tax on waste going to landfill was
proposed in European Parliament amendments to the draft legislation,
although it does not feature in the directive as enacted; however there
are such taxes in some member states – for instance France and the UK.
Reuse, recovery and recycling involve the transformation into use-

ful products of material that would otherwise go to waste. A distinction
can be made between raw materials, which have a positive economic
value, and wastes, which typically have a negative value, inasmuch as
their disposal incurs a cost. This in turn depends on factors such as the

The European Union
costs of alternative materials (including virgin materials), the ratio of

value to weight, costs of collection and transport, the quality of the waste
material and the costs of reprocessing compared with final disposal.
In practice the distinction between waste and raw material is not
straightforward, and has caused difficulty for environmental regulators.
Whether a material is considered to be waste can depend on who owns
it and the location and timing of its production. Some criteria for dis-
tinguishing between waste and raw material are set out below. These
criteria derive from OECD (1998).
SOME CHARACTERISTICS OF WASTE AND RAW MATERIALS
Waste. Unintentionally produced, not in response to market demand, with a negative

overall economic value; recovery and reuse are financially justified only if necessary for
regulatory compliance or if supported by subsidies.
Raw material. Directly and completely used as an input to a process which is not
classified as (or comparable to) a waste management process.
Waste becomes a raw material when it requires no significant further processing, and
the recovered material can and will be used in the same way as virgin material.
The Basel Convention on the control of transboundary movement

of hazardous waste (Article 2(1)) defines ‘wastes’ as ‘substances or
objects which are disposed of or are intended to be disposed of or are
required to be disposed of by the provisions of national law’. Similarly,
the 1975 European Community Directive 75/442/EEC (Article 1) defined
‘waste’ as ‘a substance or object . . . which the holder disposes of or is
required to dispose of . . .’ [within certain categories which are specified
in Annex I of the Directive]; ‘disposal’ was defined as ‘the collection, sort-
ing, transport and treatment of waste as well as its storage and tipping
above or under ground’, and also as ‘the transformation operations
necessary for its reuse, recovery or recycling’.
A subsequent, 1991, Directive (91/156/EEC) introduced a defini-
tion of the ‘holder’ as ‘the producer of the waste or the natural or legal
person who is in possession of it’; the holder ‘discards’ rather than ‘dis-
poses of’ waste, and waste can also be a ‘substance or object which the
holder . . . intends . . . to discard’ [emphasis added]. Waste ‘management’
is defined as ‘the collection, transport, recovery and disposal of waste,

including the supervision of such operations and after-care of disposal

sites’. The Directive (Annex II, B) also sets out a listing of ‘waste recovery’
operations, which includes ‘recycling/reclamation of metals and metal
compounds [and] of other inorganic materials’; it is also specified (in
Article 4) that ‘waste must be recovered without endangering human
health and without the use of processes or methods likely to harm the
environment’.
These definitions suggest that the source (as discarded material),
rather than the economic value, of materials is the criterion which deter-
mines whether they are classified as waste. This was the understanding
of the European Court of Justice in the 1997 Tombesi judgement (Case
C-304/94), where the Court held that the concept of ‘waste’ does not
exclude ‘substances and objects which are capable of economic reuti-
lization, even if the materials in question may be the subject of a transac-
tion or quoted on public or private commercial lists’. Later in 1997 the
Court held that ‘the term “discard” covers both disposal and recovery of
a substance or object’ and that ‘substances forming part of an industrial
process may constitute waste’; this is notwithstanding the ‘distinction
which must be drawn . . . between waste recovery . . . and normal indus-
trial treatment of products which are not waste, no matter how difficult
that distinction may be’ (Wallonne Case C-129/96). Hence it appears
that the legal definition of waste is broader than the everyday sense of
the term, and that to avoid categorisation as ‘waste’ a substance must
be directly reused, without any recovery operation.
There is however a grey area between the removal of impurities in
the course of a waste recovery operation and the decontamination of
materials prior to their use in the production process. In principle the
former is defined as waste treatment and the latter as normal industrial
treatment. A recent English High court judgement (Mayer Parry v
Environment Agency, 9 November 1998) exempted from the waste
category ferrous and non-ferrous scrap metal which could be used in in-
dustrial processes without requiring further processing. In the Mayer
Parry case, the point was made that manufacturers will sometimes
accept material containing foreign matter, which they will then remove:
but the mere presence of impurities does not necessarily mean that all
the material is waste.
The metal processing industry has been critical of the categorisa-
tion of scrap metal as waste. The European Coal and Steel Community’s
Consultative Committee has declared that ‘unjustified restrictions

The European Union
impeding the free movement of scrap or pejorative connotations such as

the ‘waste’ label can lead to commercial and/or technical difficulties
and jeopardise the competitive position of European user enterprises’
(ECSC, 1997). In the UK, the British Metals Federation has claimed that
‘much of the material entering a metals recycling site, let alone leaving it,
is not waste’, and called for less frequent Environment Agency inspec-
tions, and lower inspection fees (Recycling World, 4 June 1999).
When material recovery, reuse and recycling are profitable, and

therefore commercially motivated, the main functions of regulation
are to promote the functioning of markets for materials, and to ensure
that operators comply with environmental standards. Since recycling
activities are often potentially environmentally hazardous, pollution
regulations are an important consideration for the industry.
Installations using the frequently recycled materials mentioned in
Table 1.1 are among those requiring a permit in the EU, under the provi-
sions of Directive 96/61/EC on integrated pollution prevention and con-
trol (see below). Article 3 of the Directive requires that installations are
operated so that ‘. . . preventive measures are taken against pollution, in
particular through application of the best available techniques. Waste
production is, as far as possible, to be avoided; and where waste is pro-
duced, it should be recovered ‘or, where that is technically and econom-
ically impossible, . . . disposed of, while avoiding or reducing any impact
on the environment’. Annex 4 specifies criteria for determining ‘best
available techniques’: these include the use of low-waste technology
and the recovery and recycling of substances generated and used in the
processing of waste materials.
INSTALLATIONS WHICH MAY USE RECYCLED MATERIALS COVERED BY THE EUROPEAN DIRECTIVE ON INTEGRATED
POLLUTION PREVENTION AND CONTROL
Metal ore (including sulphide ore) roasting or sintering installations.
Installations for the production of pig iron or steel (primary or secondary fusion) including
continuous casting, with a capacity exceeding 2.5 tonnes per hour.
Installations for the processing of ferrous metals:

(a) hot-rolling mills with a capacity exceeding 20 tonnes of crude steel per hour;
continued

(b) smitheries with hammers the energy of which exceeds 50 kilojoules per hammer,
where the calorific power used exceeds 20MW;
(c) application of protective fused metal coats with an input exceeding 2 tonnes of
crude steel per hour.
Ferrous metal foundries with a production capacity exceeding 20 tonnes per day.
Installations:
(a) for the production of non-ferrous crude metals from ore, concentrates or secondary
raw materials by metallurgical, chemical or electrolytic processes;
(b) for the smelting, including the alloyage, of non-ferrous metals, including recovered
products (refining, foundry casting, etc.) with a melting capacity exceeding 4 tonnes
per day for lead and cadmium or 20 tonnes per day for all other metals.
Installations for surface treatment of metals and plastic materials using an electrolytic or
chemical process where the volume of the treatment vats exceeds 30m3.
Installations for the manufacture of glass
Chemical installations for the production of basic organic and inorganic chemicals
Industrial plants for the production of:

(a) pulp from timber or other fibrous materials
(b) paper and board with a production capacity exceeding 20 tonnes per day
Plants for the pre-treatment (operations such as washing, bleaching, mercerization) or

dyeing of fibres or textiles where the treatment capacity exceeds 10 tonnes per day
Source: Directive 96/61/EC concerning integrated pollution prevention and control,

Official Journal 1996 L257/26, Annex I.
Control of effluent discharges is a longstanding concern of

European environmental policy. A 1976 ‘framework’ Directive (76/464)
provided for regulation of discharges of dangerous substances, and
identified two categories of substances. ‘Black’ list substances are toxic,
persistent, and bioaccumulative, and the objective was to eliminate
pollution by setting discharge standards having regard to their environ-
mental impact and the best technical means of pollution abatement.
For ‘grey’ list substances, which have more localised polluting effects,
discharge standards must be set to achieve environmental quality
objectives established by EU Member States.
As an alternative to regulatory requirements, it is possible that
industry will be motivated to take action voluntarily to protect the
environment. In some instances this can be profitable – the so-called
‘win win’ situations, where economic and environmental performance
is aided by critical appraisal of product and process life cycles, taking
account of costs associated with potential environmental liabilities and

The European Union
the benefits of improved market opportunities. One example of this

phenomenon (cited in DeSimone and Popoff, 1997, p. 68) was a Spanish
metal finisher’s investment in recycling of process chemicals and water
which had a payback period of only twenty months.
Environmental appraisal procedures have been institutionalised
in the form of environmental reporting and management certification
standards, notably ISO 14001 and the European Union Environmental
Management and Audit Scheme (the latter is discussed in Gouldson and
Murphy, 1998, Chapter 4). Participation in these schemes is of course
voluntary for the organisations concerned, although there may be an
incidental benefit in alleviating the burden on regulatory compliance
and reducing the amount of new regulation. The need for formal regula-
tion can also be reduced if industry can voluntarily agree to achieve
specified standards: in the right circumstances such agreements might
achieve environmental objectives more rapidly, while for industry they
can have the advantages of flexibility and cost effectiveness. There are
several examples of voluntary environmental agreement in EU Member
States (see European Commission, 1996, Annex). In the case of the metal
processing industry the scope for voluntary action may be limited due
to the fragmentation of the industry: small firms are often less able to
pursue activist environmental policies, and it is more difficult to secure
solidarity within the industry.
In the context of waste management policies recycling can be seen

as an ‘intermediate’ option. The first resort is to prevent waste from aris-
ing, while disposal is seen as a least preferred option. Thus environmen-
tal policy makers, such as the European Commission and the US EPA,
have adopted a hierarchical framework, along the following lines:
• Prevention (or ‘precycling’).

• Reuse (regeneration, recovery, energy conversion).
• Recycling.
• Incineration.
• Safe disposal to landfill.
The priorities in terms of the waste management regulatory

framework are set out in Article 3 of Directive 91/156/EEC (see below).

THE WASTE HIERARCHY: THE EUROPEAN LEGISLATIVE FRAMEWORK
1. Member States shall take appropriate measures to encourage:
(a) firstly, the prevention or reduction of waste production and its harmfulness, in
particular by:
– the development of clean technologies more sparing in their use of natural resources,
– the technical development and marketing of products designed so as to make no
contribution or to make the smallest possible contribution, by the nature of their
manufacture, use or final disposal, to increasing the amount or harmfulness of waste and
pollution hazards,
– the development of appropriate techniques for the final disposal of dangerous
substances contained in waste destined for recovery;
(b) secondly:
(i) the recovery of waste by means of recycling, re-use or reclamation or any other
process with a view to extracting secondary raw materials, or
(ii) the use of waste as a source of energy.
Source: Directive 91/156/EEC on waste. Official Journal 1991 L078/32 Article 3.
Implementation of a waste management strategy has to balance

the environmental impacts at various stages of the product cycle: for
instance, ‘aluminium is expensive and dirty to make, but easy to recycle’
(Financial Times 27 October 1999). Moreover, it is conceivable that
incorporating features that facilitate recycling, and increasing the use of
recycled materials, might intensify the direct environmental impacts of
the production process. To take account of such effects, policy makers
have advocated a holistic approach to management of the product life
cycle. For example, a 1997 paper by the then European Commission
Director-General for the Environment (Enthoven, 1997), stresses the
need ‘to produce more from less’, by:
• reducing material and energy intensity;

• reducing toxic dispersion;
• enhancing (material) recyclability;
• maximising the use of renewable resources; and
• extending product durability.
This is supported by life cycle analysis of products and processes,

to assess the environmental impacts of:
• extraction and processing of raw materials;

• product manufacture, distribution and maintenance;

The European Union
• product use and reuse;

• recycling of components and materials;
• final disposal.
The information generated by this analysis can be used to control

environmental impacts through management of risks, processes, prod-
ucts, and wastes. Policy measures can encourage product developers
and manufacturers to take account of the effects of product usage and
eventual disposal – and thus, for example, to design the product for
reuse or recycling.
This policy framework is broadly favourable to the recycling indus-
try. Notwithstanding the priority given to waste prevention, the industry
stands to benefit from the preference for recycling over disposal, and
from the emphasis on integrated management throughout the product
life cycle.
A ‘model’ for waste management legislation is set out in the Basel

Convention. This includes a requirement for the regulatory authority to
‘encourage the adoption of new environmentally sound technologies
aiming at minimising the generation of . . . wastes [and] to ensure . . . that
adequate recovery and disposal facilities are located as close as possible
to the sites of generation of . . . wastes, and, if appropriate, that an
integrated network of such facilities is established’.
Thus regulatory measures are used to deter the generation of waste
and to promote recovery of materials – in effect, to encourage move-
ment up the waste hierarchy described above. Possible mechanisms to
achieve this include:
1 waste recovery regulations;

2 mandatory reuse/recycling requirements;
3 product specifications to include a minimum recycled content.
There are, as yet, no general requirements with respect to the use

of recycled materials. The UK government (DETR, 1999, Part 2 paras.
3.21–22) has indicated that, ‘looking to the longer term’, it will consider
whether it might be desirable to set mandatory levels of recycled content
for specified goods.

Recycling is often inhibited by the absence of infrastructure to col-

lect recyclable materials; on the other hand, infrastructure will not devel-
op in the absence of a market for materials. Regulations can be used to
break this log jam: one – prominent – example is the 1991 German legisla-
tion on packaging, which obliges producers and sellers of products to
take back packaging materials for recycling (this led to the establishment
of the Duales System Deutschland (DSD) which has developed infrastruc-
ture – such as collection facilities at supermarkets – to channel waste for
recycling). One side effect of the system was to stimulate exports of mate-
rial for recycling, and to depress the prices of materials such as waste
paper; this led to economic disruption in other member states, and
pressure for action at European level to prevent disorder in the market.
The result was Directive 94/62/EC on packaging and packaging waste,
setting a target for 50–65% recovery of packaging waste within five years.
Standards and regulations with respect to specific products can
be oriented towards environmental requirements. One instance is the
European Directive (91/157/EEC) on batteries and accumulators, which
sets limits for the mercury content of alkaline manganese batteries
(Article 3), and requires that spent batteries and accumulators are col-
lected separately with a view to their recovery or disposal (Article 4).
There is provision for marking of products to indicate the need for sepa-
rate collection and recycling, and the heavy-metal content. EU Member
States are also required to develop programmes for:
• reduction of the heavy-metal content of batteries and

accumulators;
• promotion of batteries and accumulators containing smaller
quantities of dangerous substances and/or less polluting
substances;
• reduction of spent batteries and accumulators in household
waste;
• promotion of research into less polluting substitute substances,
and into methods of recycling;
• separate disposal of spent batteries and accumulators.
Another instance in which regulation is designed to promote recy-

cling is the proposed European Directive on end-of-life vehicles. The
explanatory memorandum for this proposal stated that ‘in the past the
existence of markets for second-hand components and scrap metal
made it profitable to treat end of life vehicles and to achieve high rates of

The European Union
recovery of the metal fraction. However, in recent years, the situation has
changed, mainly due to the greater use of non-metallic parts in the man-
ufacturing of vehicles, the rise of disposal costs for non recyclable mate-
rials (particularly for hazardous wastes) and the dropping of steel prices’
(European Commission, 1997, para. 15). Thus the economic viability of
recovery of materials from vehicles is inhibited by costs of recycling
plastic components, which could be reduced by development of
recycling infrastructure and markets for the use of recycled materials.
Targets for recovery of vehicles are common in European coun-
tries. Examples of these targets, expressed in terms of the percentage of
vehicle weight recovered, include those in Italy (85% by 2002 and 95% by
2010), in France and Spain (90% for new models by 2002) and in the
Netherlands (86% by 2000) (European Commission, 1997, para. 33). The
European Commission has proposed EU targets of 80% by 2005 rising to
85% by 2015 (European Commission, 1997, Article 7).
However, if these targets are to be met, the arrangements for ensur-
ing that vehicles are properly dealt with will require legal force and eco-
nomic incentives. The European Commission proposal would require
that vehicle manufacturers bear the costs of processing vehicles, includ-
ing reimbursement of any costs to the final owner. Collection systems
are to be established, so that all end-of-life vehicles would go to an
authorised facility; a certificate of destruction would be a condition
for vehicle deregistration.
Manufacturers would be encouraged to design vehicles with a view
to eventual dismantling, and the reuse, recovery and recycling of vehi-
cles, components and materials. There would also be encouragement
for the use of recycled material in vehicles and other products, in order
to develop markets for recycled materials. The use of hazardous materi-
als would be discouraged: in particular, vehicles sold after 2002 should
not contain lead (except for solder in circuit boards), mercury, cadmium
or hexavalent chromium which can be shredded in vehicle shredders or
be disposed to landfill or incinerated.
Where material is categorised as waste, EU waste management

authorisation provisions are applicable to the recovery operations.
More detail is given below.

RECYCLING AND RECOVERY: REQUIREMENTS FOR PERMITS AND ENVIRONMENTAL PROTECTION IN EUROPEAN
DIRECTIVE 91/156/EEC
Article 4
[European Union] Member States shall take the necessary measures to ensure that waste
is recovered or disposed of without endangering human health and without using
processes or methods which could harm the environment, and in particular:
– without risk to water, air, soil and plants and animals,
– without causing a nuisance through noise or odours,
– without adversely affecting the countryside or places of special interest.
Member States shall also take the necessary measures to prohibit the abandonment,
dumping or uncontrolled disposal of waste.
Article 10
For the purposes of implementing Article 4, any establishment or undertaking which car-
ries out the operations referred to in Annex II B* must obtain a permit.
Article 14
All establishments or undertakings referred to in Articles 9 and 10 shall:
– keep a record of the quantity, nature, origin, and, where relevant, the destination, fre-
quency of collection, mode of transport and treatment method in respect of the waste
referred to in Annex I and the operations referred to in Annex II A or B,
– make this information available, on request, to the competent authorities [referred to in
Article 6 of the irective].
* Annex II B refers to ‘recovery operations’ which include ‘recycling/reclamation’.

Source: Directive 91/156/EEC on waste, Official Journal 1991 L078/32.
EU Member States license waste recovery operations, acting in the

framework of Directive 91/156/EEC. In England and Wales, for example,
the Waste Management Licensing Regulations 1994 (pursuant to Part II
of the Environmental Protection Act 1990) require that anyone wanting
to deposit, recover or dispose of waste must obtain a waste management
licence from the Environment Agency. Licences may stipulate – for
example – the type of waste that can be accepted, and operation proce-
dures to minimise risks to the environment; this is in addition to
any conditions imposed by local authority planning permission. The
licensing system also includes requirements to demonstrate financial
soundness and technical competence.
Shipment of waste between EU Member States, and between the
EU and non-EU countries, is subject to control under Regulation
259/93. The Regulation categorises waste in three lists: ‘green’, ‘amber’
and ‘red’ (respectively in Annexes II, III and IV of the Regulation). Most
paper, glass, textile and metallic waste is on the green list, although some

The European Union
is on the amber list – for example, glass from cathode ray tubes, wastes
from iron and steel manufacturing, and ash and residues of zinc, lead,
copper, aluminium and vanadium. The red list includes potentially
dangerous chemicals – for example, polychlorinated biphenyls (PCBs).
When destined for recovery, shipments of green list waste must be
accompanied by information on the holder, the consignee, the nature
and quantity of the waste and the recovery operation (Regulation
259/93, Article 11). For amber list waste, the requirements (set out in
Articles 6–9) are more onerous: details must be given of the source, com-
position and quantity of the waste, insurance arrangements, safety mea-
sures, the method and degree of recovery, disposal of residual waste and
the estimated value of the recycled material. Thirty days advance notice
must be given, and the authorities may object if they have reason to
believe that the regulations will not be respected. At all stages of the
shipment, the responsible party is required to sign, and retain copies of,
the consignment note. The same rules apply to red list waste, except that
the consent of the competent authorities concerned must be provided
in writing prior to commencement of shipment (Article 10). There are
similar provisions regulating imports of waste for recovery into the
EU from countries that are signatories to the relevant international
conventions (Articles 21 and 22).
1.8 Impacts of environmental policies on the

recycling industry
There is a certain ambivalence in the relationship between the

recycling industry and environmental policy makers. The latter perceive
recycling as beneficial, albeit less so than waste prevention; but on the
other hand the industry is engaged in activities which can have extreme-
ly negative impacts on the environment. The British Metals Federation
(BMF) reflected this tension in its representations to the UK government
over the proposed ‘climate change’ levy on industrial energy consump-
tion, the purpose of which is to help the UK meet its targets for green-
house gas emissions. According to the BMF, the levy would be both
‘unfair and damaging’ to the steel scrap industry, which as a big user of
energy would pay substantial amounts in levies; this was because the
levy did not take account of the environmental benefits of use of scrap
metal (rather than virgin ore), in terms of lower energy usage in

steelmaking and reductions in environmental impacts such as air and

water pollution, water use and waste disposal to landfill (Recycling
World, 27 August 1999).
Environmental policy measures can also affect the metal process-
ing industry through their influence on the markets for metal products.
An example is the switch to unleaded petrol which began in the 1980s.
European legislation encouraged the use of unleaded petrol – for
instance, the harmonisation of mineral oil excise duty in the European
single market set a minimum rate for leaded petrol approximately 17%
above the minimum for unleaded petrol (Directive 92/82/EEC, Articles
3–4). Meanwhile, emission standards for new vehicles were raised: for
instance the 1989 Directive 89/458/EEC, which more than halved the
previous emission limits for exhaust gases. To achieve these standards, it
was necessary to use state-of-the-art technology in the form of catalytic
converters (using unleaded petrol), in which precious metal compo-
nents absorb pollutants. Consequently, business opportunities were
generated in industry sectors undertaking the manufacture, mainte-
nance and recovery of the converters.
The international movement of hazardous waste is restricted by

the 1989 Basel Convention. The Convention is broadly in accordance
with the EU waste strategy hierarchy outlined above: Article 4(2) calls for
generation and transfrontier movement of wastes to be minimised,
while Article 4(8) provides that waste should be managed in an ‘environ-
mentally sound manner’.
The Convention includes two key provisions affecting the
movement of materials for recycling:
• Article 4(1): Parties may prohibit the import of wastes for disposal
and are obliged to prohibit (or not permit) the export of wastes
without the consent of the importing state.
• Article 4(9): Transboundary movement of wastes may be allowed
if they are required as a raw material for recycling or recovery
industries in the state of import.
The substance-related criteria that define ‘waste’ for the purpose

of the Convention include several metals (and their compounds),

The European Union
potentially toxic chemicals, and waste from surface treatment. These

are listed below.
BASEL CONVENTION: CATEGORIES OF WASTES TO BE CONTROLLED

(As defined in Annex I of the Convention)
Wastes having the following metallic constituents:

• Metal carbonyls
• Beryllium*
• Hexavalent chromium compounds
• Copper compounds
• Zinc compounds
• Arsenic*
• Selenium*
• Cadmium*
• Antimony*
• Tellurium*
• Mercury*
• Thallium*
• Lead*
*includes compounds
Waste substances and articles containing or contaminated with polychlorinated biphenyls

(PCBs) and/or polychlorinated terphenyls (PCTs) and/or polybrominated biphenyls (PBBs).
Wastes resulting from surface treatment of metals and plastics.
Note: this listing is not exhaustive; its purpose is to identify substances most relevant to
the recycling industry.
The Convention (Annex IV) includes a listing of ‘disposal opera-

tions’, broadly defined to include activities ‘which may lead to resource
recovery, recycling, reclamation, direct re-use or alternative uses’.
Outside the EU, some countries have sought to make a clearer dis-
tinction between waste ‘disposal’ and ‘recovery’, and there are ‘diverging
views regarding the status of processes which utilise certain waste
materials as feedstocks’ (OECD 1998, p. 7). A further complication is that
material which is classified as waste because it does not comply with
regulatory standards governing its use may nevertheless comply with
the standards in another jurisdiction (one example is the trade in used
tyres which, although no longer meeting the legal requirements of the

exporting country, can be exported to countries where they may still be

lawfully used) (OECD 1998, p. 9).
1.10 Conclusion
The discussion of the regulatory framework in this chapter has

drawn attention to a number of key issues:
The ‘prevention, recycling, disposal’ hierarchy makes recycling an
intermediate (or second best) option in the scale of environmental pref-
erence; this may sometimes be difficult to reconcile with the environ-
mental impacts of recovery and recycling operations, and the measures
taken to regulate these impacts.
The distinction between waste and raw material: the legal defi-
nition of ‘waste’ appears rather broad, and as a result recovery and
recycling activities may be subject to the waste management licensing
procedures; waste eventually becomes a process input, but the demar-
cation of the transition point is a ‘grey area’. The policy makers’ prefer-
ence for recycling over final disposal could, where appropriate, be
reflected in the administration of the regulations.
Product life cycle management: there is a growing appreciation that
environmental management should take account of, and strike a bal-
ance between, impacts on the environment at all stages of the life cycle,
so that reuse, recycling and disposal are considerations at the design and
manufacturing stages.
The functioning of markets for recyclable material might be
improved by policy measures to improve information on market oppor-
tunities, to stabilise price fluctuations, to facilitate the transportation of
materials and to encourage the use of recycled material.
Industry development varies between sectors and between coun-
tries. Much depends on the development of a collection infrastructure,
particularly for consumer goods, and in the southern regions of the EU.
The recycling of plastics, because of their complexity, poses particular
problems for the industry and for regulators alike.
Industry fragmentation is a particular concern in the case of metal
recycling. This has its positive aspects, because small and medium
enterprises often perform well; however, the industry and its regulators

The European Union
need to be aware of the difficulties which can arise in ensuring regu-

latory compliance and in developing environmental management
policies at enterprise level.
references
Barrass R and Madhavan S, European Economic Integration and Sustainable
Development, Basingstoke, McGraw-Hill, 1996.
DeSimone L and Popoff F, Eco-Efficiency: the Business Link to Sustainable
Development, Cambridge, Mass., MIT Press, 1997.
DETR, Less Waste. More Value. Consultation Paper on the Waste Strategy for
England and Wales, London, Department of the Environment, Transport and
the Regions, 1998.
DETR, A way with waste: A draft waste strategy for England and Wales, London,
Department of the Environment, Transport and the Regions, 1999.
ECSC, Resolution of the ECSC Consultative Committee on the classification of
scrap, Official Journal, 10 October 1997 C356/8.
Enthoven M, ‘The substance flow approach. Implications for industrial manage-
ment and Community policy’, IVM Conference on Substantial Sustainability –
The Relevance and Feasibility of Managing Substance and Material Flows,
Amsterdam, IVM, 1997.
European Commission, Towards Sustainability – A European Community
Programme of Policy and Action in relation to the Environment and Sustainable
Development, Brussels, European Commission, 1992.
European Commission, Communication on Environmental Agreements, Brussels,
European Commission, 1996.
European Commission, Proposal for a Council Directive on end of life vehicles,
Brussels, European Commission, 1997.
European Commission, The Competitiveness of the Recycling Industries, Brussels,
European Commission, 1999.
Gouldson A and Murphy J, Regulatory Realities, London, Earthscan, 1998.
OECD, Final guidance document for distinguishing waste from non-waste, Paris,
OECD, 1998.
european legislation
Directive 75/442/EEC on waste, Official Journal, 1975 L194/39.
Directive 76/464/EEC on pollution caused by certain dangerous substances
discharged into the aquatic environment, Official Journal, 1976 L129/23.
Directive 89/458/EEC amending with regard to cars below 1.4 litres Directive
70/220, Official Journal, 1989 L226/1.
Directive 91/156/EEC on waste, Official Journal, 1991 L078/32.
Directive 91/157/EEC on batteries and accumulators containing certain danger-
ous substances, Official Journal, 1991 L078/38.
Directive 92/77/EEC supplementing the common system of value added tax,
Official Journal, 1992 L316/l.
Directive 92/82/EEC on the approximation of the rates of excise duties on mineral
oils, Official Journal, 1992 L316/19.

Directive 94/62/EC on packaging and packaging waste, Official Journal, 1994

L365/10.
Directive 96/61/EC concerning integrated pollution prevention and control,
Official Journal, 1996 L257/26.
Directive 1999/31/EC on the landfill of waste, Official Journal, 1999 L182/1.
Regulation 259/93 on the supervision and control of shipments of waste, Official
Journal, 1993 L30/1.

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The international scrap and recycling

First published 2001, Woodhead Publishing Ltd

© 2001, Woodhead Publishing Ltd

Trademark notice: Product or corporate names may be trademarks or registered

British Library Cataloguing in Publication Data

ISBN 1 85573 248 3

Typeset by Best-set Typesetter Ltd, Hong Kong

PART 1: FERROUS AND NON-FERROUS METALS

© Woodhead Publishing Ltd Contents / page i

3.2 Production processes and technologies

4 Iron and steel

PART 2: PRECIOUS METALS

3 Platinum group metals

PART 3: OTHER MATERIALS

Contents / page ii © Woodhead Publishing Ltd

3 Pulp and paper

PART 4: THE REGULATORY FRAMEWORK

© Woodhead Publishing Ltd Contents / page iii

This Handbook is designed as a source of information and reference on

© Woodhead Publishing Ltd Preface / page i

horizontal supply networks, recycling may therefore require fairly com-

Preface / page ii © Woodhead Publishing Ltd

Vincent Rich is Chair of the Department of Economics and Quantitative

James King received a first class honours degree in Economics from

After working for a merchant bank and a tin smelting company,

© Woodhead Publishing Ltd Contributors/ page i

Chairman of the Statistical Committee of the International Copper

Tony Warwick-Ching is a principal consultant in non-ferrous metals at

Dr Prachaya Jumpasut graduated magna cum laude from the

Contributors / page ii © Woodhead Publishing Ltd

the National Institute of Development Administration in Bangkok

Philip Watson graduated in 1965 with an Honours Degree in Economics

David Moore is Managing Editor at the Society of Glass Technology, an

© Woodhead Publishing Ltd Contributors / page iii

Robert Barrass is an economic consultant with over 20 years’ experi-

Shobhana Madhavan is Professor, and Director for the Centre for

Contributors / page iv © Woodhead Publishing Ltd

Entries are in the form Section/chapter/page number

aluminium remelted scrap ingot (RSI), 1/1/23

© Woodhead Publishing Ltd Index / page i

pulverised coal injection (PCI) usage, by country, 1/2/11, 1/2/13

Index / page ii © Woodhead Publishing Ltd

policy on landfill, 4/1/4 production

© Woodhead Publishing Ltd Index / page iii

International Lead and Zinc Study Group production

Index / page iv © Woodhead Publishing Ltd

obsidian (see glass, natural occurrence) end uses, 3/1/2–4

© Woodhead Publishing Ltd Index / page v

posco, 1/4/3 international trade, 3/2/13–14

Index / page vi © Woodhead Publishing Ltd

end uses, 2/2/2–2/2/3 price relationships

© Woodhead Publishing Ltd Index / page vii

waste Wavin Re-use, 3/1/13

Index / page viii © Woodhead Publishing Ltd

A brief history of recycling

The materials balance approach to resource and

Waste and the waste management hierarchy

Recycling flows and recycling rates

The economics of recycling