The sustainability movement and emerging technology are brightening prospects for molded pulp, says Joseph Grygny of the International Molded Fiber Association.

Molded pulp has been a packaging choice in niche applications—most prominently egg cartons and takeout beverage carriers—for several decades.

The sustainability movement has created a growing market in the electronics shipping and packaging space for the material, which is often is made with scrap paper recycled content. Now, R&D in the molded pulp parts tooling has provided another reason for optimism among molded pulp producers.

In an interview with Recycling Today, Joseph Grygny, executive director emeritus of the New York-based International Molded Fiber Association (IMFA), comments on the material’s recent advances and the current and prospective role of scrap paper in the material’s production.

Joseph Grygny (JG): For many years, the global molded fiber product manufacturers have used various methods of creating molds (tools) to produce saleable molded pulp (fiber) into packaging and other types of products (four cup drink carriers; food service plates etc.; egg packaging; industrial items; electronic products and household appliances. For the past 20 or more years and today, molds are produced using CNC machined forms, drilled with hundreds of small holes, and a fine metal screen usually cut into shapes and attached to the form. The holes in the form and the screen allow the water-based recycled fiber slurry to be separated for a fiber mat in the shape of the mold to be vacuumed formed. Therefore, the mold (tool) is a critical part of the molding operation. It is also labor-intensive, costly and time-consuming when a molder’s customer is asking for packaging. The new tooling technology developed by HP, using advanced forms of multijet fusion (MJF) [and] 3D printing, eliminates all machining, drilling and screening as well as increasing the efficiency of the molding operation and quality of finished products. Because of these new capabilities, molded fiber product manufacturers are able to better address their markets.

JG: With the new HP Advanced Molded Fiber Tooling Solution, the operational efficiencies and features provide product to customers with significantly improved products faster and with less effort. It also gains position with respect to competitive packaging materials—and it lowers production costs. With the new tooling, the range of applications is expanded with molded fiber product feature capabilities, such as easy branding of packaging products.

JG: Yes, in a fair amount of applications, mixed paper is and can be used. However, many molding machines, particularly the tooling, have problems with mixed paper and some have installed cleaning equipment to reduce these problems. Some molders, because of their tooling and process, need to use only ONP.

JG: The markets for molded fiber packaging products is exploding, primarily with those wanting to get out of using plastic materials for environmental reasons. Demand is high and molded fiber manufacturers have backlogs, as do molding machinery companies. There is a definite increase in the priority of packaging decision-makers for natural, environmentally sustainable packaging products, including molded fiber.

The second pillar of its 2025 strategy diversifies and expands Hydro’s portfolio into recycling, renewables and batteries.

Norway-based Hydro says it will focus on low-carbon aluminum production as well as expanding its portfolio into recycling, renewables and batteries by 2025.

“We have generated cash, cut costs and delivered extensive operational improvements across the company, providing a solid foundation for our growth agenda,” says President and CEO Hilde Merete Aasheim. “Now, we’re raising the bar, setting a new ambitious improvement target for 2025, combined with a clear strategy to make Hydro a profitable and sustainable industry leader.”

In the last year, the company says it has focused on “keeping the wheels turning, maintaining a healthy and safe work environment” while also working to position the company for the future. Hydro’s improvement program remains on track to deliver its 2020 target of $456 million, with the company adding that all business areas “over-delivered” on their cost ambitions. The improvement program, accompanied with a net operating capital release and reduction in capex, contributed to greater cash generation in 2020.

Hydro says a key driver of its 2020 improvement has been the ramp-up and “increased operational robustness” of its bauxite and alumina operations in Brazil. Alunorte is on track to deliver alumina volumes at around 90 percent of nameplate capacity in Q4 2020.

“Our Brazilian organization has made good progress in increasing the asset integrity and robustness while maintaining focus on health and safety during the global pandemic,” Aasheim says.

Hydro says its overall goal to reduce CO2 emissions by 30 percent by 2030 remains on track. The company adds that it is committed to replacing fuel oil with natural gas at the Alunorte refinery and to then electrify coal boilers at Alunorte. Hydro adds that it has signed intentional agreements to develop solar and wind power projects to deliver renewable energy at an attractive cost.

The company says it also plans to strengthen its position in low-carbon aluminum by 2025. Several of the global megatrends are supporting increased demand for aluminum, Hydro says, citing London-based CRU’s forecast that aluminum demand in the vehicle sector is expected to grow by 6.2 million metric tons by 2030. CRU also expects demand for aluminum can stock to grow by 3 million metric tons by 2030. Total semis demand is expected to increase by 32 million metric tons by 2030, as well, according to CRU.

Over the past year, Hydro says it has seen increased demand for low-carbon Hydro Circal and Hydro Reduxa, and demand is expected to grow further in 2021.

The second pillar of its 2025 strategy diversifies and expands Hydro’s portfolio into recycling, renewables and batteries. Growing into these areas positions Hydro to take advantage of growth from key megatrends such as sustainability, electrification and urbanization, the company says.

“We will grow in areas where our capabilities match the megatrends, first and foremost in recycling, renewable energy and batteries,” Aasheim says. “Our capabilities and unique low-carbon position are enablers for growth in these areas. Our current recycling portfolio is a solid foundation for further growth, and Extruded Solutions is shaping demand through innovative solutions in combination with a strong and diversified asset base.”

Hydro currently has a portfolio of 29 recyclers and an annual capacity to consume 2.6 million metric tons of aluminum scrap. The 2025 ambition includes a doubling of Hydro’s current postconsumer scrap use, which could provide an earnings increase that ranges from $114 million to $171 million, according to the company. A strategy has been established “across the recycling value chain” within Primary Metal, Rolled Products and Extruded Solutions, the company indicates.

In renewables, Hydro has created a new unit, Renewable Growth, designed to leverage its industrial footprint and energy competence to take positions in renewable energy projects, primarily in the Nordics and Brazil.

The company says it also has established a new Battery unit as part of Hydro Energy. Hydro already has undertaken several investments in the battery value chain in recent years. The strategy leading to 2025 includes additional investment with battery partners in what it calls “attractive areas of the value chain,” resulting in pro-rata earnings potential of $68 million to nearly $80 million from the invested companies.

“Hydro remains committed to driving long-term value for our shareholders, and I am pleased with the cash generation over the past, challenging year,” Hydro Chief Financial Officer Pål Kildemo says. “Looking forward, we have reconfirmed and stretched the road maps to satisfactory profitability for each of our business areas within the 2025 time frame.”

December prices for domestic scrap rise by $75 to $80 per ton.

Steady domestic steel mill demand has joined booming overseas demand to outstrip supply in the December ferrous scrap market.

The combination of factors has led to Fastmarkets AMM December Midwest Index prices that rose by $80 per ton for two of the three index grades (No. 1 busheling and No. 1 heavy melting steel, or HMS), while the price of the third (shredded scrap) rose by nearly $76 per ton.

In late November, overseas demand began putting upward price pressure on United States ferrous scrap supplies, as governments around the world funded steel-intensive infrastructure plans. By the time domestic mills started making offers in early December, they encountered a loftier market that began to rise yet more.

The domestic price increases outpaced the average export prices as tracked by Fastmarkets AMM. The publication has early December East Coast export prices settling at just under $340 per ton (about a $75 per ton increase over November) and West Coast prices averaging $316—only about $20 higher than November.

While the rising prices create the potential for a healthy margin for scrap processors, the bad news is that seasonal and public health factors are placing limits on the amount of scrap flowing into yards.

“We expect our flows to settle in at or return to 70 percent of pre-COVID levels,” says a processor on the East Coast about his company’s volume levels heading into the new year.

A processor in the Midwest comments, “Business has really slowed down the last month or so. It’s definitely not because of pricing; I just don’t think there is as much scrap out there. I’m hoping for an uptick soon, but it might be a few months.”

The East Coast processor says that, as of mid-December, demand for ferrous scrap has very much stayed in place. “Domestic bids kept rising as mills couldn’t get their fill. We sold domestic plate and structural at up $65 early in December but could get another $20 now.”

Export demand, likewise, seems poised to continue, says the processor. “Container shred prices started November at less than $300 per metric ton but are now at $365 per metric ton.

On the containerized scrap side, Nathan Fruchter, a Lawrence, New York-based trader and consultant with Idoru Trading, says a constraint has taken shape as container and booking shortages are a factor in several U.S. and Canadian port regions on both the East and West Coasts.

Heading into 2021, global economic recovery and the consumption of steel that goes with it appears poised to shape the market on the demand side while public health considerations in the U.S. and the pending widespread vaccination rollout weigh heavily on the supply side.

Winter weather, seasonal factory retooling programs and virus-related restrictions in economic activity all contributed to the late 2020 spike in prices. “We have been fortunate to have been involved in some good demolition projects in November, but some of that is slowing down,” says the East Coast processor as of mid-December.

Prices could rise yet more, predicts Fruchter. “Many feel it may be the top of the market because they are in disbelief, yet some fundamentals support even higher numbers,” he comments. “There will be holes in the supply chain and that usually pushes prices even higher. We are going into winter, where tonnage can sometimes tighten up and transport can be hampered by cold weather. This affects U.S. and EU ports, but Baltic and Black Sea supplies even more. Steel demand is also back with a vengeance, so at least those prices seem to be in sync with scrap.”

The Washington-based American Iron and Steel Institute (AISI) says domestic raw steel production was just shy of 1.58 million tons in the first week of December.

America’s steel output has been on a rising trend since a week that spanned the end of April and the first two days of May of this year, when production hit a trough of 1.14 million tons. Mills operated at a 51.1 percent capacity rate that week, but are now back up to 71.4 percent of capacity.

Company forecasts strong copper demand and maintains its $96 per metric ton premium.

Hamburg, Germany-based Aurubis AG has reported that it increased operating earnings before taxes by 15 percent to 221 million euros ($268 million) in the past fiscal year. Operating consolidated net income also increased, rising by 21 percent to 167 million euros ($203 million).

The company says significantly higher refining charges for copper scrap and other recyclable materials contributed to its higher earnings. Its throughput of material with low metallic content also increased substantially in part because the Metallo sites in Beerse, Belgium, and Berango, Spain, were included in its results starting in June. With the purchase of Metallo, Aurubis says it has expanded its product portfolio and its capacities for processing lower metal-content grades of scrap.

“The integration of Metallo is going completely according to plan,” Aurubis AG Executive Board Chairman Roland Harings says. “We are confident that we will even exceed the targeted synergy potential of 10 to 15 million euros ($12 million to $18 million) in the next three years.”

Earnings also were positively affected by a significantly higher metal gain accompanied by increased precious metal prices and a substantially higher concentrate throughput, counterbalanced by lower treatment and refining charges for copper concentrates owing to market factors, Aurubis says.

Cathode sales to Asia, particularly to China, which had a quota system in place for much of 2020 for copper scrap imports that led it to purchase more cathode, compensated for the drop in demand from Europe related to the coronavirus pandemic.

Harings says, “Our broad position in a number of regions, and particularly our expertise in copper and nonferrous metal recycling, provide us with stability. In spite of the ongoing pandemic, we therefore look to the new fiscal year with a sense of cautious optimism and expect the result to be in a slightly higher target range.”

Aurubis says it expects global copper demand to increase in 2021 following the temporary decline in 2020 related to the pandemic. Therefore, the company says its copper premium will stay at the prior-year level of $96 per metric ton above the London Metal Exchange three-month benchmark.

The company adds that it expects copper concentrates and recyclables to be well supplied.

While Aurubis acquired Metallo earlier this year and formed a joint venture for cable recycling with TSR Recycling GmbH & Co. KG, which is expected to be completed in the first quarter of 2021, it plans to sell its flat-rolled products (FRP) segment.

“It is still our clear intention to sell FRP, and we are in an advanced stage of negotiations,” Harings says. “However, the process has been delayed by the coronavirus crisis.”

Aurubis says sustainability is another key part of its strategy. To that end, the company plans to certify its production sites, starting with its plant in Pirdop, Bulgaria, to the Copper Mark, which it refers to as a quality seal for the sustainable production of copper. It also will embark on other projects intended to reduce its CO2 footprint.

The company’s complete “Annual Report 2019/20” is at www.aurubis.com/en/investor-relations/news-and-reports/annual-reports.

The investment expands the organizations’ existing partnership.

JS Capital Management, the private investment firm led by Jonathan Soros, and Schusterman Family Investments, both based in New York,  have acquired a minority stake in Closed Loop Partners, according to a news release issued by the New York-based circular economy investment firm. JS Capital’s most recent investment expands its existing partnership with Closed Loop Partners, having become a limited partner across that organization’s funds and an active co-investor in 2018.

Closed Loop Partners’ asset management division is comprised of venture capital, project finance, growth equity and private equity. To date, the firm says it has invested in more than 40 companies across sectors, including consumer products and packaging, fashion, food and agriculture and technology. Investors in Closed Loop Partners’ funds include the world’s largest retailers, consumer goods and technology companies, financial institutions, family offices and foundations.

Additionally, Closed Loop Partners’ innovation center, the Center for the Circular Economy, works across brands, countries and industries to create the systems change necessary for the advancement of the circular economy through research, analysis and collaboration, according to the organization.

 Jonathan Soros says, "Ron Gonen and Closed Loop Partners have been pioneers as investors and thought leaders in the circular economy. Their networks and expertise are unparalleled in the field.”

Gonen, who founded Closed Loop Partners and serves as its CEO, says, “With an exceptional investment track record and deep commitment to a sustainable future, JS Capital and Schusterman Family Investments make ideal partners for the next chapter of our growth.”  

A circular economy offers a viable business framework to reduce costs, increase efficiency and protect the environment we share, benefiting people, the planet and business. At a time when climate change and sustainability are no longer top of mind for only waste-conscious consumers, but for investors, brands and governments across the globe, business as usual must change to avoid the economic, social and environmental risks of climate inaction.