Scrap metal processors expect another
by Brian R. Hook
The company was formed in 1999
with the merger of B. Abrams & Sons Inc. of Harrisburg, Pennsylvania
and L. Lavetan & Sons Inc. of York, Pennsylvania, both family-owned
businesses with a long history of processing. In 2000, CSR acquired
Wagaman Iron & Metal facility in Gettysburg. The company now
operates in five locations in Central Pennsylvania.
Verman said global demand is
impacting the market. “There are situations when global
markets come into the equation to help stir up the market and
take scrap away from domestic markets, mainly because their prices
are higher and more attractive.”
Verman said there is not much
of an advantage for his company to ship steel scrap oversees.
But he said there continues to be global interest in the non-ferrous
“The thought is that many
people have shelled out their scrap during the past year to take
advantage of good markets and now with great markets there just
isn’t enough copper around. Translation: People do not have
much inventory,” Verman said.
“With regard to steel,
as long as industry is making finished products and the economy
is allowing the public to buy new products there is no short term
Brian Shine, president of Manitoba
Corp. in Lancaster, New York, also expects prices to decline.
He said Manitoba saw an increase in throughput for 2005, but he
expects lower volumes in 2006. “I believe this was attributable
to improved market prices which brought out more scrap along with
improved efficiencies in our plant operation,” he said.
Manitoba is a non-ferrous metal
processor that specializes in processing and packaging copper
scrap. It is a family-run business now in its third and fourth
generation. It operates a recycling plant at its headquarters
outside of Buffalo and also has a plant in St. Louis and facilities
in Rochester, New York, and Toronto. It operates chopping lines,
wire burning incinerators, an aluminum sweat furnace, a small
arms ammunition popping oven, as well as additional equipment
to prepare and process non-ferrous metals.
“Demand for several years
has been working towards just-in-time inventory control. With
the very high copper markets this is more evident than ever,”
“Supply is very challenging.
Most of our suppliers are very low on inventory at this time.
We are performing for all of our customers but the model would
be strained if consumers start to aggressively require material.”
Shine said he also expects further margin compression due to higher
operation costs and competition for raw material.
“China is still a major
factor. We keep hearing about their slow down in purchases. However
we have not seen a slow down in activity,” Shine said.
The Institute of Scrap Recycling
Industries Inc., a trade group in Washington D.C. which represent
more than 1,200 companies that process, broker, and consume scrap
commodities, estimates that the American scrap recycling industry
directly employs over 30,000 people. It estimates the value of
scrap materials produced tops $30 billion.
Across the country in the Pacific
Northwest it is much of the same story among family-owned metal
processors. Lois Young, marketing supervisor at Skagit River Steel
& Recycling Inc. in Burlington Washington, said that future
markets are hard to predict.
“I am not in the projection
business, especially since we are a small company. However, I
have been in marketing for a while and like all good marketers,
we know prices will go up or down. Rarely do we ever guess prices
are stagnant,” Young said.
“There are so many factors
that go into marketing these days that projection is very difficult.
There seems to be a relatively strong demand for most products.
Asia is still a formidable player…and other world markets
seem to be opening up as well.”
Skagit River Steel & Recycling
was founded in 1958 under the name Skagit River Junk. Young said
the company has evolved into a community oriented recycling and
steel company and is still family owned. It is comprised of a
retail steel division where it is able to custom cut and order
new steel products. The company also has a full line recycling
division that handles both ferrous and non-ferrous scrap metals.
“We feel fortunate to be
in a location that has easy access to ports in Seattle, Tacoma
and British Columbia as well as proximity to steel and paper mills,”
“Some of the pitfalls of
our location are very limited manufacturing, rural and agricultural
areas and lots of competition for a limited supply” of scrap
Young said the company processed
roughly 22,000 tons in 2003 and 25,000 tons in 2004. Through November
2005, it processed about 26,000 tons. “In the current economical
climate, we are exploring ways to enhance our business with updated
equipment and tools that will continue to prosperously grow our
company,” Young said