Ferrous

As of early February, several dealers in the Great Lakes region indicated they are barely taking in enough scrap to keep their processing machines operating. Even with slack demand from mills, many of these processors have worked through the inventory they had on the ground, leaving them looking at a stark landscape at the end of the day.

“My yard is as neat as it has been in years,” quips one operations manager. “When I go home at the end of the day, I’ve got a clean yard and I can see the ground.”

A buyer at an Ohio company who also works in the scale house remarks that scale traffic has slowed to a pace at which he has never before seen it. “To say I’m working the scale might not be accurate, because there’s just not a lot of work involved right now,” he says.

Most mills are reportedly keeping their inventories as low as they ever have in past winters, discounting any fears of weather-related disruptions and instead conserving cash for their companies. The continuing slump in the steel industry will probably keep demand, pricing (and subsequently supply) for the foreseeable future.

“Our mills are not any better off than those in other parts of the country,” says one Texas processor. “They’re reducing melting capacity, and still trying to work through their inventory. There are also not enough sales on the new steel side.”

Caught on the bottom of the ferrous slump are tin-plated cans. One Ohio processor is watching bales of tinplate rust on the ground and is only accepting cans the company is obligated to take due to municipal contracts.

A regional processor of curbside recyclables in the Midwest reports being offered just $13 per ton for the baled steel cans the company has collected.

SCRAP RECYCLERS LOOK TO DIVERSIFY

With the ferrous pricing and demand slump continuing into 2001, scrap recyclers are devoting extra attention to diversifying their operations.

Naporano Iron & Metal Co., a division of Metal Management Inc., Chicago, has asked permission from the Waterfront Commission of New York and New Jersey to allow 40 of its employees into the register of longshoremen in the Port of New York and New Jersey.

The company has petitioned that its staff should be able to handle break bulk products such as slabs and steel coils. Presently employees load and offload slag, scrap metal, pig iron and hot briquetted iron out of Newark’s port.

In Texas, Commercial Metals Co. (CMC), Dallas, has announced the acquisition of most of the assets and the trade name of Allform Inc., a supplier of concrete-related forms and supplies including rental tilt-up accessories. The acquisition will help CMC expand its existing concrete-related operations.

Allform, headquartered in Tampa, Fla., with a second location in Orlando, services commercial, highway, industrial and residential contractors throughout central Florida.

Overseas companies have also been taking diversification measures. Simsmetal Ltd., Sydney, Australia, has made a foray into the renewable energy industry with a 25% stake in Landfill Management Services Pty. Ltd (LMS).

Simsmetal spent $2 million for the stake in LMS, a leading landfill gas extraction, management and systems designer. Further, Simsmetal has the option to invest another $8 million in LMS, either through equity or convertible note subscription, giving it a 50% holding.