The Power Within

The scrap metal industry is a proud bastion of supply and demand economics, and, for the past several years, surging demand has kept processors busy. (To view the chart of wire choppers in North America click on the following link -- Wire Choppers)

For managers of wire chopping operations, the supply side of the equation has been as competitive as at any time in history, as companies in every link of the supply chain seek to stay in the equation.

Whether trading in copper wiring, aluminum cable or both, wire choppers are eager to produce a clean secondary commodity that is in demand in markets near and far.

By no means are domestic wire choppers opening up their doors and having material flow in with little effort expended.

Buyers seeking material on behalf of overseas consuming facilities continue to bid competitively for wire and cable scrap generated throughout North America.

Operators of wire chopping lines may themselves determine that some material is more suitable for export and processing overseas, though most equipment owners continue to seek ways to provide the value-added chopping service themselves.

Clean, processed copper and aluminum chops remain a desirable secondary commodity, and the higher cents-per-pound rates being paid for copper and aluminum can, in theory, create safer margins and spreads with which to work.

One domestic consumer of copper wire and cable scrap, Encore Wire Products of McKinney, Texas (see profile starting on p. 48), has installed its own wire chopping equipment to help ensure it is able to supply its melting facility with the necessary feedstock.

The volatility and competitiveness of the recent copper market can be daunting, causing one established wire chopper to remark that his company has been concentrating on processing aluminum cable to keep its production equipment humming.

But hungry consumers of nonferrous scrap, whether located in North America, East Asia or in another market, are bidding record high prices for scrap, permitting some new investments in wire chopping equipment.

Several new locations and company names appear on this year’s wire chopping list that cannot be found on the 2005 list. Tulsa Auto Core is one processing firm that has ordered a wire chopper. The Tulsa, Okla., processor ordered its equipment this summer, according to the company’s Bill Painter.

Recycler Lenny Siesco Sr. of Magnetic Research & Recycling, Belgium, Wis., is another processor expanding into wire chopping. The separation and sorting specialist is adding wire chopping to a menu of services that includes metals recovery from auto shredder residue and other diverse streams of material.

Siesco reports that he has ordered a Prospector model wire chopper marketed by the NexGen recycling equipment division of Marathon Equipment Co., Vernon, Ala.

While prospecting for gold may be more closely associated with the 19th century, prospecting for copper has most certainly become associated with the opening years of the 21st century.