JANUARY/FEBRUARY 2007

Equipment Focus—Automobile Shredders

The thought of buying an automobile shredder can be as big and daunting as the equipment itself. Heed the advice of shredder operators and manufacturers to bring this decision down to scale.
 

BY JIM FOWLER 

Buying an automobile shredder can be a mind-wrenching experience. “There are so many options—I’ve never been so confused in my life,” says one scrap processor who recently entered the shredding arena.
   Purchasing a shredder can be gut-wrenching as well, unlike buying any other piece of equipment, processors say, because a shredder is the largest, most expensive piece of scrap processing equipment in the marketplace.
   Still, there’s something alluring, almost irresistible in the thought of owning a shredder. “It’s said that everybody wants to run a shredder today,” one shredder operator says, “and there’s probably more truth to that than any of us would care to admit.”

Answering the Basic Questions
You might want a shredder, but do you need it, and can you handle it? Before you put your mind and gut through the shredder selection and purchasing process, first decide if you really should be in the shredding business. That isn’t always an easy decision. Some processors have weighed the idea for years, others for decades.
   Part of the challenge is that shredding is a “whole new arena,” a “different world” compared with other scrap niches, a recycler notes. Deciding whether shredding is right for you
requires some serious corporate soul-searching and number-crunching. “The first question we asked ourselves was, ‘What do we want to be?’ What markets do we want to be in, and what’s the competitive landscape? [We did] a market feasibility assessment,” another processor says.
   One scrap company had made the strategic decision to stay out of the shredding business for years. Periodic evaluations indicated that such a venture wasn’t in the firm’s best interests. Then the competitive landscape changed. “We realized that if we didn’t put a shredder in our market area, someone else would,” one of the company’s principals says. “Suddenly it was clear that we had to take an offensive strategy that was a defensive strategy as well.”
   Another scrap operation had considered installing a shredder several times in the past 10 years, but the numbers didn’t justify the capital expense. Then the company maxed out its processing capacity and had to make a decision: “We either had to buy more equipment or add another shift,” a company leader notes. “That’s when we decided to run the shredder numbers again.”
When doing your calculations, keep several key factors in mind.
Supply and Demand. Your access to raw material—the scrap to feed a shredder—and to end markets for the shredded scrap can justify, or refute, your plans for a shredder.
On the scrap availability question, unfortunately there is no magic tonnage figure above which a shredder is always the right answer. One scrap company
assessed its regional scrap pool and thought a shredder didn’t make sense given the tonnage it knew it could secure. “We kept changing our model—3,000 tons, then 5,000 tons, then 8,000 tons,” he says, but they never found a number they liked. Even so, “we made a decision on guts and determination that we had to do it because we were losing our customer base. In hindsight, I wish we’d done it sooner.”
   Determining your scrap availability and end markets also can “make a whole world of difference in the size, horsepower, and setup of the shredder you buy,” one shredder operator says. Processors today tend to buy a larger machine and run it for fewer hours, one shredder manufacturer says. “It’s a mistake to buy a machine based on your current tonnage of scrap because you’ll grow into other markets,” he notes.
   A second school of thought is to install a giant shredder and let it take over the processing tasks of other equipment—such as shears—in your yard. But that approach only increases your need for replacement shredder parts, another shredder manufacturer asserts, because even the biggest shredder can’t replace a shear.
Power. Automobile shredders driven by one or more electric motors can have substantial power demands. “You have to determine exactly where your energy is coming from,” says one processor who learned this lesson the hard way. Two months after ordering his shredder, he faced the “unpleasant surprise” that he had to install a high-voltage substation to power the system. That project cost the processor $316,000 for the substation and another $189,000 to get ser­vice to the substation. “Needless to say,” he recounts, “we had underestimated the budget for what we had to do.”
   Another processor says his firm had to pay the utility $1 million to install an electrical substation for its shredder. “Fortunately,” he says, “they allowed us to pay it over time.”
   Because the electric utility world is alien—and sometimes alienating—to scrap processors, some operators advise enlisting professional help in navigating shredder power-supply issues. “When it came time to deal with our local power company, we decided to hire a consultant to negotiate with the utility,” one processor says. “I’d highly recommend this approach. It’s a complicated deal, and the consultant was able to negotiate a significant rate savings for us.” (For more on managing electricity costs, see “Powerful Ideas” on page 68.)
   Property. Shredding operations are big, expansive systems that encompass not only the shredding box itself, but also the infeed and downstream systems, traffic flow, and storage space for unprocessed scrap, processed material, and shredder fluff. All of those elements require space.  Consider whether you have space for the shredder on your existing property or whether you’ll need a new location. Don’t forget the zoning and permitting requirements at the local, county, and state levels.

Researching the Field
After pondering the above issues, let’s say you decide to enter the world of shredding. What should you do next?
   Visit existing shredder plants—most likely outside your competitive region—and talk with the operators, say processors and manufacturers alike. “There’s no substitute for visiting people who are running shredders and seeing what the equipment does,” one shredder operator says. “Talking about costs is particularly important,” he adds. Shredders have “a lot of nuances.”
   To get the most thorough perspective, consider sending a variety of staff members—not just company principals—on these site visits. “We sent our maintenance superintendent, operations supervisor, and ferrous yard foreman to look at shredders around the country,” a processor says. “Talking with people and getting their opinions helped us decide on the manufacturer and the system to install.”
   Yes, visiting other shredders can take a lot of time, but it’s “a tremendous amount of help—you get ideas about how you might want to do something as well as ideas about how not to do something,” another recycler says. “It’s a real learning experience.”

Small, Medium, or Large?
After doing your field research, you have to decide how large a shredder you want, usually by specifying the size of the shredding mill and the horsepower of the shredder’s drive motor.  Manufacturers usually use two numbers to describe shredding mills, such as 80/104. The first number denotes the shredder’s hammer swing and the second number denotes the inside width
of the shredding box, both in inches. Manufacturers describe shredder motors by their horsepower output, with 1 hp equal to 746 watts. Generally, the larger the mill and the higher the horsepower, the greater the shredder’s production capacity.
   Many processors say their goal is to achieve “full-box shredding,” in which the shredding chamber is filled with scrap at all times. This approach reportedly extends the life of wear parts, produces denser scrap, reduces explosions, and yields more production per kilowatt of electricity consumed. To achieve full-box shredding, one manufacturer says, the shredder must have adequate horsepower—3,000 to 4,000 hp for an 80-inch machine, 4,000 to 6,000 hp for a 98-inch machine, and 6,000 to 8,000 hp for a giant shredder (generally defined as any shredder more than 120 inches wide).
   One processor initially thought he wanted a 60-inch shredder but ultimately decided on an 80-inch mill with a 3,000-hp motor. That size gave the firm more shredding capacity than it needed. In fact, the company shreds only two days a week, using the other days for maintenance and cleanup. Even so, the processor says, “We had run the numbers and knew this would work for us—and it has. We just try to buy at a reasonable price in our local area, working on a wider margin and less volume. Having the shredder capacity for anticipated future growth was important to us.”
   Other processors opt to install giant shredders because such systems can process heavier material, including some shearable scrap. Because of their size, giant shredders can require considerable horsepower to get the rotor going. Once the rotor has started, however, it keeps turning on inertia, minimizing the horsepower demand at that point. It’s possible, therefore, for processors to install an “underpowered” giant shredder—one without massive horsepower—yet still gain the striking force to process heavier grades. Such underpowered systems process less tonnage, which eliminates the need for a large downstream separation system to handle the flow of processed material. Conversely, processors who want substantial striking force and high production volume can opt for a giant shredder with a lot of horsepower and a major downstream system.
   One scrap firm shifted from being a heavy shearing operation to a giant shredding facility. In the process, it changed from “a scrap processing plant to a logistics management plant,” a company official says. He explains that the firm’s previous shearing operations required it to accumulate inbound and outbound material, carry the inventory on its books for two weeks, and ship a variety of grades in bargeload quantities. Its shredder, which can process 300 tons an hour, delivers “a conversion factor that is 10 times greater,” the recycler says. Scrap is delivered, processed, and shipped the same day and “is a receivable tomorrow morning.” The firm’s main challenges now are “buying the scrap required to feed our machine and managing the logistics of getting it in and out of our plant,” the processor says.

Looking Downstream
A shredder’s downstream system—all the equipment that follows the shredding box—is critical because it’s what maximizes (or minimizes) your metal recovery, which is the name of the shredding game. Downstream equipment, which includes ferrous magnets, eddy-current separators, advanced metal sorters, conveyor belts, and other equipment, can cost a pretty penny. Ignore the cost, one processor advises, and focus instead on “installing the equipment that will maximize your metal recovery. You can afford to be a little frivolous in your downstream design and capital spending because the long-term benefits of near-100-percent metal recovery will pay handsome dividends.”
   Though ferrous scrap accounts for the greatest tonnage from a shredder, processors recommend paying more attention to maximizing recovery of the nonferrous fraction because—as many operators will tell you—that’s where the real money is. “When you design your system, you have to design it to optimize the recovery of all of the nonferrous metal in your shred stream because that is your largest revenue stream,” one recycler affirms.

Other Cost Considerations
After recovering the metal from your shredded stream, you’ll be left with tons of shredder fluff—all the nonmetallic components of your infeed, such as glass, carpet, rubber, dirt, and plastics. In the United States, this material usually heads to the landfill, sometimes finding beneficial use as daily cover and sometimes just being discarded. Land disposal fees, requirements, and restrictions vary greatly around the country, so check the status of those in your state and region. Some processors say their disposal fees run $20 to $28 a ton. Another bemoans that fluff disposal is his biggest monthly cost, estimating it at three-and-a-half times his electricity bill. Whatever your fluff disposal costs, be sure to factor them into your shredder operations budget.
   Shredder operators also recommend budgeting adequately to maintain your shredding system. One processor says he sets aside $4 to $5 a ton for maintenance—about $600,000 annually. That might seem like a lot of money, but smart maintenance can prevent catastrophic repairs that could end up costing you more than that in downtime and replacement parts. Fortunately, today’s shredders are more durable overall and easier to maintain when they do need fixing. “Maintenance is time-consuming,” the processor says, “but not nearly as hard as maintaining a press or shear. [Manufacturers] make the shredder so you can get to everything.”
   In the end, selecting the right shredder comes down to finding the best match for your particular operation—its scrap availability, throughput goals, physical limitations, and end markets—and nobody knows those issues better than you.
   “Everybody thinks they know the right way to do it, but frankly I’m not sure anybody knows for sure,” one processor says. “Shredder operators love to tell you how tough the shredding business is. For us, it’s the best thing we ever did. We wouldn’t have survived without it.”

Shredder Selection Guide
Keep these issues in mind when considering the purchase of an automobile shredder.
Raw material availability. Is there enough scrap in your area to feed a shredder?
End markets. Are there ready markets for your various shredded metal streams? Regarding potential steel consumers, what is their tolerance for copper content in shredded scrap?
Energy source. Is electricity available and affordable to power an electric shredder motor, or will you have to consider diesel or natural gas?
Property. Do you have enough physical space in your facility to accommodate a shredding system, and can you acquire the necessary zoning and permits to install the equipment?
   Dry, damp, or wet? You can order shredders that process scrap dry or that inject a little or a lot of water into the shredding chamber. Which do you prefer? If you select a damp or wet system, you might want to install an infrared camera near the infeed chute to look through the steam at incoming scrap.
   AC, DC, or diesel-powered motor? Opinions differ on the best motor to use based on your size and energy preferences.
Horsepower. In general, the higher the horsepower, the greater the potential production. Remember, though, that a large-horsepower motor requires both an infeed system and downstream equipment that can keep up with the large production output. That could add costs for you on the front and back ends of the system.
   Disc, spider, or barrel rotor? There’s a lot of personal preference when it comes to rotors, though some manufacturers say disc rotors are the most popular on new installations. Compare wear characteristics, striking force, energy requirements, and maintenance of the different types.
Infeed conveyor. With infeed conveyors costing about $4,500 a square foot, think carefully about how much you really need. Make sure the conveyor can carry the load necessary to keep the shredder full.
Material handlers/cranes. Most shredder operators advise having at least one material handler/crane dedicated to feeding the shredder. Do you already have one you can devote to the task, or would you need to buy a new one?
Process controls. All new shredders have automated controls generally involving programmable logic controllers, or PLCs, to make the system run more efficiently. Compare the control features of different shredding systems to see which you like best.
Ferrous downstream system. Do you want one or two ferrous drum magnets? What should feed these magnets, a conveyor belt or a vibrating table? In larger shredding systems, consider splitting the shredded stream to achieve better separation and efficiency. Also, do you want to install an air separation system? If so, should it be before or after the magnet(s)?
Nonferrous downstream system. Do you want to operate your nonferrous separation system online, with shredded material flowing continuously from the ferrous downstream system, or offline, by stockpiling shredded material after ferrous separation for later nonferrous recovery? 
How many eddy-current separators do you want? Do you plan to install advanced metal sorters to further separate the recovered nonferrous metals? The technology in this area is constantly changing and improving, so ask a lot of questions and be prepared to spend. Remember that nonferrous recovery is where the real money is.
Manufacturer qualifications. Consider all aspects of the shredder manufacturers you’re considering—their personnel, experience, construction techniques, recent projects, and component partners or subcontractors.
Cost. Are you ready for the capital investment of purchasing a shredder? According to some sources, a complete shredding system, including downstream equipment, can cost $4 million to $5 million for an 80-inch shredder, $6 million to $8 million for a 98-inch shredder, and $8 million to $10 million for a giant shredder. Also, plan to spend 80 percent to 100 percent of the equipment cost for installation services, electrical and hydraulic contractors, concrete, and auxiliary equipment such as scales and hydraulic cranes.

Jim Fowler is retired publisher and editorial director of Scrap .