ISRI, ASC Battle Over Financing Issues

The Institute of Scrap Recycling Industries recently sent a letter to the Export-Import Bank of the United States, opposing an attempt by the American Scrap Coalition to block the bank from extending credit for the sale and export of $24 million of shredded scrap to Turkey. ASC argued to the Bank, without cause or reason, that exports of ferrous scrap should be discouraged by the U.S. Government, its departments, agencies and other associated bodies.

The financing arrangement was geared toward Sims Metal Management, which was attempting to ship the material to Turkey.

In the letter, dated Aug. 11, Robin Wiener, ISRI's president, wrote: "Although ISRI does not normally comment on matters relating to the commercial interests of an individual member, we felt it critical to do so in this case given the attempt of the ASC to block the legitimate pursuit of support from the Export-Import Bank on the basis of a false statement of a crisis in steel scrap and a veiled attempt to impose controls on exports of goods that have a long history of global trade. The ASC argued that the Bank should deny the request for the bank credit limit due to the fact that the United States is facing a crisis situation with respect to steel scrap, both in terms of supply for domestic consumption and rising prices brought on by increasing exports. Our letter points out that recent independent research concludes that there is enough scrap to meet domestic manufacturers' demand for recycled materials for the foreseeable future, with scrap available both domestically and from foreign sources.

"On the issue of rising prices for steel scrap, we also point out that the price of finished steel produced by the U.S. steel industry has increased at a rate faster than the increase in the price of steel scrap. Further, despite increased costs of raw materials, the U.S. steel industry continues to enjoy record profit margins with operations running at or near capacity and with prices passed on to the manufacturers of goods such as cars, appliances, and machinery.

Finally, we emphasized that the U.S. government should – and consistently has – facilitated the export  of scrap materials because of the significant trade surplus produced by the U.S. scrap industry. The U.S. government, through its Department of Commerce and embassies in various parts of the world, has promoted U.S. scrap exports, with the U.S. scrap industry being one of the few bright spots in the U.S. balance of trade."

Alan Price, an attorney representing the ACS, in defending the move, notes the following:

To read the full letter click on the following link -- ISRI Letter