Cut to Fit

Lofty scrap metal pricing and the prospect of upgrading materials with a healthy margin helped prompt a bit of a revival in North American wire chopping in the middle part of this decade.

Even during that stretch, however, wire and cable processors operating equipment in North America faced stiff competition for feedstock from export brokers representing buyers in China and other nations.

A positive side effect of the downturn is that dealer customers who had grown accustomed to shipping bales of wire and cable to China began considering the merits of sending material to domestic wire chopping operations.

MAKING THE GRADE
Investing in automated equipment to turn large volumes of wire and cable into clean copper and aluminum wire chops is a decision that many scrap companies have made during the past several decades.

Processors, in general, have to determine that they currently handle enough wire and cable to make a return on investment or that they can market their services to attract such material on an ongoing basis.

An additional variable in this equation is the fluctuation of the market, both in terms of scrap volumes available on the supply side and shifts in demand that can occur quickly.

Through much of this decade a healthy domestic economy helped some recyclers decide to take the plunge and invest in automated wire processing equipment. The ability of equipment suppliers to offer smaller, more affordable wire chopping and materials separating systems also helped enable some company owners to set up new systems.

When Recycling Today surveyed the North American wire chopping landscape in 2007, some 56 location in the United States were identified as owning automated wire chopping systems, with only one of them indicating that its equipment was idle as of that time.

Results of inquiries in 2009 begin to paint a slightly different picture.

ALTERED LANDSCAPE
Wire chopping operations that had enjoyed improved pricing and healthy flow have seen monthly shifts in the market on the material generation side in the two years since the list was last compiled.

Even before the financial system meltdown and subsequent economic slowdown, the real estate and building market began showing weakness as early as 2007.

A sudden halt in the construction of 4,000-square-foot houses and then in office and retail construction signaled the first reduction in wire and cable scrap generation.

On the positive side, sources from two different wire chopping companies contacted by Recycling Today indicated that after the “lost shipments to Asia” era of late 2008, they experienced increased inquiries and transaction activity from scrap dealer customers.

Despite that, several processing facilities have either been confirmed as being shut down or have not been reachable during this year’s research process. (See “Dropped Out” sidebar on the bottom of this page.)

A few facility managers indicated that their equipment is currently idle, and the possibility certainly exists that other facilities on this list have also been on idle through parts or all of 2009.

Through the market turmoil in 2008 and 2009, owners and operators of wire processing facilities have had numerous recalculations to make to determine whether the circumstances dictate keeping their plants running at full speed.

The author is editor-in-chief of Recycling Today and can be contacted at btaylor@gie.net. Managing Editor DeAnne Toto, Senior Editor Dan Sandoval and Assistant Editor Zack Lloyd also helped gather and compile information for the facilities list.