The problems experienced by ferrous scrap processors in the past two years have mostly been of the sort caused by business conditions that are so good that there is not enough time to pay attention to details.
When Recycling Today last published its list of the nation’s 20 largest ferrous scrap processors in the spring of 2004, the scrap industry was already in the midst of its current boom, with the previous year of 2003 generally considered one that would be tough to match for good news.
But pricing has remained aloft and has surged up even higher, as global demand for ferrous scrap and other steelmaking materials has created a market with very few parallels in the memories of most traders.
The money flowing into the scrap industry has perhaps helped fuel some merger and acquisition activity, but it has also emboldened privately held firms to stay in the market and enjoy the returns.
The vast majority of companies that appeared on the 2004 list appear again on our 2006 version. One major exception involves the merger of Hugo Neu Corp. into Australia’s Sims Group. That company’s combined operations make it an even more powerful competitor for processing market share than either had been before the merger.
HIGHER NUMBERS. Added together, the tonnage figures submitted by companies on the list—as well as those estimated for companies that did not respond to our inquiries—indicate either growth in the overall ferrous scrap market or increased market share for the major players.
Among the companies showing steady growth is Metal Management Inc., Chicago, which has grown from processing 4.1 million tons in 2001 to nearly 4.7 million tons last year.
The company operates 11 shredding plants and has a presence in a variety of regional markets, including Chicago, Denver, Memphis, Newark, Phoenix and several other large and mid-sized cities. (See "Giant Steps," July 2005 Recycling Today).
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The chart prepared by Recycling Today’s editors includes only U.S. companies, although if the Canadian market is included, at least one booming Ontario-based company would crack the top 10. The Toronto market’s biggest scrap company, Triple M Metals of Brampton, Ontario,www.TripleMMetals.com, processed some 2 million tons of ferrous scrap in 2005, according to information provided by the company. The company has five Ontario locations and also has a significant presence on the nonferrous scrap side of the market. In late 2004, the company broke ground on an aluminum re-melt plant in Brampton called Matalco Inc. The 110,000-square-foot facility will produce billets made from aluminum scrap for sale to extruders throughout North America. Another major name in Canadian scrap is American Iron & Metal Co., Montreal. The company operates one shredder plant and an additional facility through which more than 365,000 tons of ferrous scrap were handled in 2003. |
Also growing steadily in volume is Ferrous Processing & Trading Co. (FPT), Detroit, which has expanded beyond its Detroit roots and now operates shredding plants in Cleveland and Miami in addition to its Motor City facilities. The company processed nearly 3.7 million tons of ferrous scrap in 2005, demonstrating growth compared to the 3.3 million tons FPT processed in 2003.
Another Midwest scrap recycling company that has looked south for growth opportunities is Cohen Brothers Inc., based in Middletown, Ohio. (See "Against the Grain," in the Sept. 2003 issue of Recycling Today.) The company moved up from 840,000 tons processed in 2003 to slightly more than 1 million processed last year, and it did so thanks in part to acquiring collection and processing capacity in neighboring Kentucky.
Yet another Midwestern company that has grown in part through acquisition is Galamba Metals Group, Kansas City, Mo. (See "Second Sight," in the Feb. 2005 issue of Recycling Today.) In 2005, the company acquired additional facilities in Missouri, while in 2004 it added an Arkansas location. Galamba Metals is procuring more ferrous scrap through this strategy, as it grew from processing 390,000 tons in 2003 to 560,000 tons last year.
Growing significantly since Recycling Today last published our list is Commercial Metals Co., Irving, Texas, which processed nearly 3 million tons of ferrous scrap in 2005, according to figures submitted by the company. That is double the 1.45 million tons it processed in 2003.
Commercial Metals Co. has added some new facilities, such as one in Birmingham, Ala., but has also upgraded equipment at a number of locations and has aggressively pursued additional business in its growing Southern markets.
Without question, the demand for ferrous melting stock in China and other rapidly developing nations has given the scrap industry in the United States all the incentive it needs during the past two years to keep scrap flowing into its yards, process it and ship it out to hungry domestic and international markets.
RIGHT AND WRONG. With many privately held scrap companies reluctant to disclose volume figures, it can be difficult to gauge how many companies that belong on this list are in fact missing.
Our hope is that owners, managers and employees of the companies that are on the list will consider it an honor. It takes hard work by a lot of people to procure, process and ship ferrous scrap that is needed and wanted by steel mills and foundries. We hope that our recognition of those companies will be viewed as a way to honor leadership in an industry that can provide challenges with each up and down cycle in the market.
Updating the list every two years has proven to be a good way to track changes in the corporate composition of the ferrous scrap industry. Among the major changes in this list compared to the April 2004 version is the previously mentioned combination of Hugo Neu Corp. and Simsmetal into a U.S.-based subsidiary of the Sims Group known as Sims Hugo Neu Co. LLC.
There has also been at least one company that appeared in earlier lists that has since been largely disbanded. The former North Star Recycling subsidiary of Cargill Inc., Minneapolis, was sold off when Cargill decided to de-emphasize its involvement in the steel industry.
Many of North Star’s former locations were picked up by Alter Scrap Processing. The St. Louis-based company added a number of Upper Midwest locations to its roster by acquiring some of the former North Star scrap processing assets.
There remain several companies that are viable candidates for Recycling Today’s list of the 20 largest scrap processors in the United States. In the cases of some of these companies, they have submitted figures that put them just outside of the 20 largest, while in other cases the companies did not submit a tonnage figure, and no reliable estimate could be calculated.
Among such companies are Camden Iron & Metal Inc., Camden, N.J.; Gershow Recycling, Medford, N.Y.; Newell of Atlanta; Morris Recycling, New Albany, Miss.; General Iron Industries, Chicago; American Compressed Steel, Kansas City, Mo.; Atlantic Scrap and Processing, Kernersville, N.C.; Sadoff Iron & Metal Co., Fond du Lac, Wis.; Yaffe Cos. Inc., Muskogee, Okla.; Louis Padnos Iron & Metal Co., Holland, Mich.; Adams Steel, Anaheim, Calif., Pacific Coast Recycling, Long Beach, Calif.; and Tennessee Valley Recycling, Decatur, Ala.
The editors of Recycling Today would be happy to amend our list of the 20 largest scrap processors in the United States to include any of these companies that fell into the "non-responding" category for this year’s edition of the chart.
The author is the editor of Recycling Today and can be contacted via e-mail at btaylor@gie.net.
For the full list of the 20 Largest U.S. Ferrous Scrap Processors, follow the following link: 20 Largest Ferrous Processors
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