U.S. Congress Introduces Metal Theft Bill
U.S. Sen. Amy Klobuchar (D-Minn.) and U.S. Rep. Erik Paulsen (R-Minn.) have introduced federal legislation intended to address metal theft. Klobuchar and Sen. Orrin Hatch (R-Utah) introduced the bill in the Senate Feb. 12, while Paulsen and Reps. Bart Stupak (D-Mich.) and Lee Terry (R-Neb.) introduced the bill in the house.
The Secondary Metal Theft Prevention Act of 2009 is aimed at thieves who steal metal from a variety of targets and sell it as scrap for a quick profit.
"The vast majority of scrap metal dealers are perfectly legitimate and law abiding," Klobuchar says. "This law is designed to deter the thieves. The harder it is for them to sell the stolen goods, the less likely it is they’ll steal in the first place."
Paulsen says, "This common-sense legislation will reduce crime and drug use and address the growing epidemic of metal theft in our area."
The legislation is designed to make it more difficult for thieves to sell stolen metal to scrap metal dealers. It contains a "Do Not Buy" provision that bans scrap metal dealers from buying specific items unless sellers establish that they are authorized to sell the secondary metal in question by providing printed documentation.
The bill calls for the Federal Trade Commission to enforce the measure and gives state attorneys general the ability to bring civil action against violators of the legislation.
Under the Secondary Metal Theft Prevention Act of 2009, scrap metal dealers would be required to:
• Keep records of secondary metal purchases that include the name and address of the seller, the transaction date, the amount and description of the metal purchased and the number from the seller’s driver’s license or other government-issued ID;
• Maintain these records for a minimum of two years and make them available to law enforcement agencies to assist in tracking down and prosecuting metal thieves; and
• Pay for transactions of more than $75 by check instead of cash.
Additionally, the legislation would restrict scrap dealers from paying cash to the same seller within a 48-hour period to dissuade sellers from circumventing the check payment requirement.
The Institute of Scrap Recycling Industries Inc. (ISRI), Washington, D.C., has protested the House and Senate bills. ISRI Executive Director Robin Wiener says the bills have a number of provisions that would make it difficult for scrap metal recyclers to operate.
"Additionally, the bills would inappropriately attempt to regulate recyclers without any relationship to metal theft," she says. "Worse still, the bills are strangely silent regarding the real problem, metal thieves."
Weiner also expressed a willingness on ISRI’s part to work with Congress to develop legislation that effectively combats metal theft.
Sims Metal Management Post Loss for First Half of Fiscal Year
Sims Metal Management, based in Sydney, Australia, has announced a net loss of $79.4 million after taxes for the six months of its 2009 fiscal year ended Dec. 31, 2008.
The company also reports earnings before interest, tax, depreciation and amortization and goodwill impairment charge (EBITDA) of $254.1 million, a 3 percent increase from the prior corresponding period. Sales revenue increased by nearly 104 percent to $5.58 billion in the first half of the company’s 2009 fiscal year, largely as a result of the merger with Chicago-based Metal Management.
Sims attributes the loss to a number of reasons, including the effect of write-downs to the net realizable value of inventories of $116 million, as well as the impact of nonferrous contract renegotiations that reduced operating income by $42 million. Scrap intake across the company declined sequentially by 42 percent, from 4.15 million metric tons during the first quarter to 2.40 million metric tons in the second quarter.
Consistent with transition plans put in place on completion of the Metal Management merger, CEO Daniel Dienst is now responsible for the company’s global operations, while Jeremy Sutcliffe continues in his role as an executive director of Sims Metal Management.
"As our results reflect, we experienced an unprecedented deterioration in economic conditions in the first half of our 2009 fiscal year," Dienst says. "The downturn spread with remarkable speed, ultimately affecting demand and metal prices in a way that could not have been foreseen. As a consequence of the global credit crisis and rapid deleveraging, and the related effects on commodity markets, we recorded a number of significant abnormal items."
However, Dienst says Sims Metal Management is encouraged by its strong cash flow, which resulted in "modest" net debt at the end of the reporting period and a gearing ratio of below 2 percent. "We believe that with our dedicated employees, global reach and leading position in markets around the world, Sims Metal Management will emerge from this downturn even stronger and will create meaningful long-term value for its shareholders," he adds.
The company’s sales in North America increased by 208.8 percent compared to the same period in fiscal year 2008.
The half-year results for the company’s North American operations were affected by inventory adjustments and the nonferrous contract renegotiations of $69 million and $22 million, respectively, as well as by a goodwill impairment charge of $173 million (pre-tax and after-tax). EBIT in North America was $277.5 million before inventory adjustments, nonferrous contract renegotiations and goodwill impairment.
The company’s scrap intake in North America declined nearly 43 percent from the first quarter to the second quarter. As a result, Dienst says Sims Metal Management "has aligned our resources appropriately, carefully managed buy prices and inventories and slashed operating expenses, which included a painful reduction in staffing in the region by approximately 18 percent."
More information on Sims Metal Management’s financials from the first half of the company’s 2009 fiscal year is available at www.recyclingtoday.com/news/news.
asp?ID=14784&AdKeyword=sims+metal+management.
Nucor Reports Record Year
Nucor Corp., Charlotte, N.C., has reported record consolidated net earnings for the full year of 2008 of $1.83 billion. The company’s net earnings in 2007 were $1.47 billion. Nucor’s 2008 consolidated net sales increased 43 percent to a record $23.66 billion, compared with $16.59 billion in 2007. The average sales price per ton increased 30 percent relative to 2007, while total tons shipped to outside customers increased 10 percent.
Consolidated net earnings of $105.9 million for the fourth quarter of 2008 decreased by 71 percent compared with $364.8 million for fourth quarter of 2007 and by 86 percent from the $734.6 million reported for the third quarter of 2008.
Results for the quarter were affected by the decrease in demand for steel and the consumption of higher cost raw materials purchased earlier in the year.
During the quarter, Nucor’s consolidated net sales decreased by 6 percent to $4.15 billion, compared with $4.40 billion in the fourth quarter of 2007, and by 44 percent compared with $7.45 billion in the third quarter of 2008. The average sales price per ton increased 30 percent from the fourth quarter of 2007 and decreased 13 percent from the third quarter of 2008.
Nucor shipped nearly 4.3 million tons to outside customers in the fourth quarter of 2008, a decrease of 27 percent from the fourth quarter of 2007 and of 36 percent from the third quarter of 2008.
SDI Posts Increase for 2008, Despite Lackluster Fourth Quarter
Fort Wayne, Ind.-based Steel Dynamics Inc. (SDI) has reported overall improvements for fiscal 2008, despite a challenging fourth quarter.
For the year, SDI says net sales grew to a record $8.1 billion, an increase of 84 percent compared to net sales of $4.4 billion in 2007. SDI attributes the increase in sales to the acquisition of OmniSource Corp. in October 2007 and to the acquisition of additional metals recycling operations in mid-2008. SDI says higher average selling prices for steel and recycled metals during 2008 also helped to increase the company’s sales.
Additionally, SDI reports record net income for the year of $463 million, a 17 percent increase from the $395 million the company recorded in 2007.
Following strong performance in the steel and metals recycling segments for the first three quarters of 2008, SDI saw significant weakening in order activity in its flat roll division and in metals recycling in late September. This weakening broadened to the company’s other steel operations as the fourth quarter progressed.
Compared to the third quarter, fourth-quarter 2008 steel shipments of 942,000 tons were down 34 percent; ferrous metals shipments of 898,000 net tons were down 49 percent; and nonferrous metals shipments of 177 million pounds were down 27 percent. Lower volumes combined with declining prices for all business segments resulted in fourth-quarter sales of $1.2 billion, a decline of 53 percent from $2.6 billion in the third quarter of 2008 and of 17 percent from $1.5 billion in the fourth quarter of 2007.
SDI incurred a net loss of $83 million in the fourth quarter, compared to net income of $193 million in the third quarter of 2008 and to net income of $98 million in the fourth quarter of 2007.
The company’s steel operations achieved operating income in the fourth quarter, but it declined significantly from recent quarters in light of slower operating rates and shipping volumes, declining steel selling prices and higher input costs, as lower production volumes led to a slower than anticipated depletion of ferrous raw materials that had been purchased at higher prices.
A significant portion of the fourth-quarter loss was from a non-cash, unrealized hedging loss of $35 million related to valuing certain nonferrous financial contracts at fair market value, SDI explains. Additionally, the company’s steel and metals recycling operations recorded losses of about $26 million and $10 million, respectively, in light of reductions in ending inventory values. After making these adjustments and having consumed much of the older, higher-cost raw materials, SDI says its steel and metals recycling operations began 2009 with lower scrap costs reflecting more recent market values.
"It is strange to be reporting the best year in the company’s history and at the same time the company’s worst quarter," says SDI Chairman and CEO Keith Busse. "The steel industry took it on the chin in the fourth quarter as orders dried up, and Steel Dynamics was not exempted. The combination of weaker demand, inventory reductions in both distribution and at the OEM level and the commercial paralysis brought about by tight credit markets led to very slow order activity.
"This resulted in fourth-quarter production curtailments at our mills and metals-recycling facilities," Busse continues. "We have started the new year with somewhat better activity, but we cannot be certain how long it will take the steel and scrap markets to return to more normal demand patterns. All of our SDI facilities are currently operating well below capacity. However, the company is prepared to ramp up very quickly with any pickup in business activity," Busse adds.
Organizations Partner on Illinois Scrap Yard
Riverport Railroad (RVPR) of Savannah, Ill., the Illinois International Trade Centers (IITC) and CIMCO Resources, Rockford, Ill., have announced a joint venture to develop a metal recycling and export center with rail service at Savanna Depot Park in Savanna, Ill.
RVPR will commit land and rail infrastructure to the project, while IITC will incorporate the center as part of its Inland Port and Foreign Trade Zone development and use its Ocean Transportation Intermediary license to establish what it describes as "cost-competitive, door-to-door freight rates" for containerized scrap shipments exported from Savanna Depot Park. CIMCO will bring its metals recycling expertise to the project. CIMCO has six facilities in Illinois, but none in the Northwestern part of the state, where the Savanna Depot Park is located.
The development of a metal recycling center at the depot is part of RVPR’s long-term development strategy of inviting complementary businesses to Savanna Depot Park that support each other and use rail.
The long-term goal of the joint venture is to construct a state-of-the-art, rail-served, purpose-built green facility for effectively scrapping and recycling large vehicles of all kinds. The project will start with rail cars, some of which are already resident at the site, but will also target truck trailers, international containers and farm equipment.
Aleris International Receives Court Approval of First Day Motions
Aleris International Inc., Beachwood, Ohio, has announced that the U.S. Bankruptcy Court has granted the relief the company requested in a series of court filings known as first day motions. The court orders will help Aleris continue to operate during the reorganization proceedings, according to a company press release.
As part of its voluntary filing of petitions for reorganization under Chapter 11, which include the company as well as its wholly owned U.S. subsidiaries, Aleris filed first day motions to support its employees and vendors and suppliers, together with its customers and other stakeholders. Among other things, the court granted approval for the company’s request to continue payment of wages and health and welfare benefits to employees and to pay vendors and suppliers for goods and services provided on or after the filing date of Feb. 12, 2009.
Judge Brendan Shannon of the U.S. Bankruptcy Court, District of Delaware, also granted interim approval for the company to access $150 million of its new $1.08 billion debtor-in possession (DIP) financing, including a new $500 million term loan. The DIP credit facility includes a $575 million revolving credit facility, which replaces the company’s previous revolving credit facility, and will be used for the company’s normal operating and working capital requirements, including employee wages and benefits, supplier payments and other operating expenses during the reorganization process.
Steven J. Demetriou, Aleris chairman and CEO, says, "We are pleased to have received initial approval for our DIP facility and other first-day motions, which will enable us to transition into Chapter 11 with minimal disruption and to maintain normal operations as we move forward."
Aleris International is a global leader in aluminum rolled products and extrusions, aluminum recycling and specification alloy production.
More information is available at www.aleris.com.
Ben Weitsman & Son to Open Facility in Syracuse, N.Y.
Ben Weitsman & Son, Owego, N.Y., is nearing the opening of the company’s newest scrap metal recycling facility in Syracuse, N.Y.
Processing at the new facility, similar to the company’s Owego plant, will be done indoors.
The project is slated to be completed by late this summer and includes the construction of a brand new 110,000-square-foot building that will enclose all of the facility’s processing equipment. The yard has roughly 8 acres to store scrapped vehicles.
The 65-foot high building will accommodate material handlers as well as mobile shears and an baler for nonferrous metals.
Because the facility is totally enclosed, the company’s Adam Weitsman says the yard will be open from 6 a.m. to 6 p.m. daily to maximize its processing capabilities.
Weitsman also has ordered 200 roll-off containers to feed the Syracuse facility. The company presently has 1,200 containers in use.
Weitsman says the yard will be used as a feeder yard for the company’s mega shredder in Owego. "Every night we are going to be trucking material to our mega shredder," Weitsman says. "There won’t be any inventory on site."
With the addition of the Syracuse plant, Ben Weitsman & Son and its sister company, Upstate Shredding, owned by Adam Weitsman, will process more than 500,000 tons of ferrous scrap per year.
Steve Green, formerly with Nucor Steel, has been named vice president of Ben Weitsman & Son and is in charge of running the new Syracuse facility.
Explore the April 2009 Issue
Check out more from this issue and find your next story to read.
Latest from Recycling Today
- Pennsylvania’s York County Solid Waste and Refuse Authority issues RFP
- Sibanye-Stillwater embraces recycling in its effort to reach carbon neutrality
- Scrap Expo 2024: Embracing digital payment solutions
- Atlantic Coast Recycling opens region’s largest combined single-stream, dual-stream MRF
- EuRIC calls for recycled-content targets for plastics in vehicles
- Leadpoint expands offerings to include on-route support services
- Scrap Expo 2024: Steelmakers, suppliers talk material flows and ‘green steel’
- Operations resume at East, Gulf coasts ports
