Ferrous Department

A Longer Ride

The harsh ferrous market has had many effects on scrap recyclers, including slower flow, thinner margins and a hunt for new markets if a favorite mill shuts down.

One of the unexpected effects has been reconsidering shipping options, especially for processors whose nearest scrap destination is among the casualties in the mill and foundry capacity shakeout.

Several processors in Ohio say that they have increasingly turned to rail shipping to affordably reach new consuming markets. Northern Ohio has seen the closing of LTV Corp.’s integrated mills in Cleveland as well as the CSC Co. electric arc furnace shop in Warren, Ohio.

An Akron scrap processor says the percentage of ferrous scrap leaving his yard by rail has now surpassed 50 percent, where just a couple of years ago that number would have been as low as 20 percent.

A trucking company manager confirmed that his company has been seeking work in other industries to replace the volume lost in the ferrous scrap sector. That volume has gone down both because of reduced overall ferrous scrap activity and because of the resurgence of rail shipping.

“In recent months, the percentage of our business from hauling scrap has come in around 20 percent, where it used to be closer to 40 percent,” says the trucking company official.

For their part, Class I rail companies have helped themselves by maintaining better schedules now that post-merger logistical problems have been eased. They have also kept rates low, with some rail companies expected to introduce lower rate structures in the first half of 2002.

HARSCO WINS MILL SERVICES CONTRACTS

The Heckett MultiServ division of Harsco Corp., Harrisburg, Pa., now has additional business in Latin America due to a series of new contracts and service add-ons to existing contracts with combined value of more than $65 million. The contracts range from five to ten years in duration.

In Mexico, Heckett MultiServ has been awarded new responsibilities for scrap handling and slag pot carrying services at the Atlax (Sidenor) works.

In Brazil, Heckett MultiServ will assume added responsibilities for on-site scrap management services as part of an expanded contract with Acesita, South America’s sole producer of special flat stainless and silicon steels.

And in Chile, Heckett MultiServ has finalized a new contract at Noranda’s Altonorte copper smelting facility. Under terms of the contract, Heckett MultiServ will provide slag pot carrying services to support the plant’s production requirements and efficiency.

IRON FOUNDRIES SHUTTERED

Domestic scrap markets have taken another hit with the shutting down of the operations of Wheland Foundry LLC, Chattanooga, Tenn, by its parent company North American Royalties Inc.

Wheland filed for Chapter 11 bankruptcy in November of 2001, and has thus far has had no success in securing a deal that would keep its operations going. Wheland vice president for human resources Wayne Tamme informed media outlets in Chattanooga in early February that the company would be shutting down all of its facilities in Tennessee and Georgia and eliminating more than 1,100 jobs.

The company’s foundries specialize in the making of brake components for the automotive industry and include two gray iron foundries and two ductile iron foundries.

A potential buyer for one of the facilities has stepped forward, but that buyer—Hayes Lemmerz Industries of Northville, Mich.—is also currently operating under Chapter 11 bankruptcy protection. Hayes Lemmerz is interested in Wheland’s centrifugal cast iron foundry in Chattanooga, a smaller plant employing 75 people.

Wheland has for years been considered one of America’s largest foundry companies, with roots going back to 1866. The company’s facilities have a combined melting capacity of 190 tons per hour, and the company boasts that nearly half of all cars assembled in the U.S. contain one or more Wheland components.

Although melting is winding down at all of the plants, company and union officials are hopeful that the plants will not be in mothballs for long. A North American Royalties spokesperson has told the Oak Ridger (Tenn.) newspaper, “There is still remaining interest in the other facilities. We don’t have any firm offers on the table, but we continue to have prospects looking at our plants.”