August 30, 2008

Scrap suppliers cashing in on high demand

bizjournals.com reported that scrap metal suppliers are riding a wave of record price increases, caused by higher worldwide demand for steel and the devalued dollar.

Mr Keith Rosen vice president of finance for Atlantic Scrap & Processing in Kernersville said that "We are at levels we have never seen before in the history of this business.” He said that the price that shredding companies receive for ferrous scrap has doubled since November 30th 2007, from USD 250 per gross ton to USD 505, according to current American Metal Market figures. Prices for other metals, including copper and aluminum, also have risen sharply.

Mr Junaid Ahmed manager of Triad Auto Salvage in Winston Salem, said the price he receives per hundred pounds for crushed cars has gone up about 100% in the past year, from USD 5 to USD 6 to USD 10 to USD 12 per hundred pounds.

He said that Triad Auto Salvage crushes about 100 vehicles purchased from auto auctions each month and sells them to shredding companies, including Atlantic Scrap. Each week, the company sends three or four loads of cars, weighing anywhere from 37,000 to 40,000 pounds, to the shredder.

Mr Ahmed said that the higher proceeds for the crushed cars are allowing the auto salvage yard to add several storage buildings where it can house additional auto parts.

According to industry figures, for years, US companies have relied on domestic and international steel producers to fill demand. With the dollar's decline, US companies are importing 60% to 70% less steel and foreign companies are seeking to buy more at the more favorable exchange rates.