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EuroWire – September 2010
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EuroWire – January 20 6
Transat lant ic
Cable
Let nothing be lost:
spinning gold from scrap metal
Wresting value from scrap is a painstaking business that can
also be strikingly profitable. The Seattle (Washington)
Times
for 13
th
June reported on Schnitzer Steel (Portland, Oregon),
founded more than a century ago as Alaska Junk. The company
makes finished steel products from scrap and sells used auto
parts; but the core of its business – accounting for 75% of
income – is scrap. Schnitzer is expected by DA Davidson analyst
Brent Thielman to post revenues approaching $2.4 billion in
fiscal 2010, with a net profit of around $63 million.
The company collects old autos, railcars, construction elements
and other metal debris at facilities it maintains in four states.
There the scrap is shredded, loaded into ships and sent to
China, South Korea, Turkey and a number of other countries
whose reviving steel mills must be fed. “We [the United States]
are the biggest reservoir of junk metal in the world, by far,”
Mr Thielman said. “That’s something I think these guys can
leverage.” Leveraging is a concept that Schnitzer would appear
to understand very well. The company’s Oregon minimill buys
steel from the scrap division, melts it in a 108-ton capacity
electric arc furnace, and turns it into rebar, wire rod and other
products. Moreover, according to the
Times
, “At Schnitzer’s more
than three dozen US and Canadian auto-parts yards, customers
pay to scavenge usable parts from junked cars. What’s left goes
to Schnitzer’s scrap division, if feasible, or is sold elsewhere.”
Elsewhere in metals . . .
Steel companies were prominent supporters of a failed
❈
❈
Senate resolution aimed at blocking a broadened “tailpipe
rule” that strengthens the hand of the US Environmental
Protection Agency in the regulation of greenhouse gas
emissions. As of January, EPA oversight of auto emissions
would be expanded to include emissions from stationary
sources, such as steel production facilities. Endangerment
findings and subsequent regulations could impose more
stringent EPA requirements on over 6 million stationary
sources, including 200,000 manufacturing facilities. Thomas
J Gibson, president and CEO of the American Iron and Steel
Institute, on 11
th
June expressed the AISI view on such EPA
activism under the Clean Air Act: “This regulatory path will
be economically detrimental to American manufacturing,
and will not result in a reduction in greenhouse gas emission,
as overseas competitors will continue to increase their
emissions. Climate change is a global problem that can only
be addressed effectively on a global basis.”
On 17
❈
❈
th
June the Dutch-German-British group Urenco
inaugurated the second phase of its uranium enrichment
plant in Eunice, New Mexico, in the US Southwest. According
to the owners, the first new uranium enrichment plant in
the country in decades will by 2014 have sufficient capacity
to meet the needs of half the nuclear power reactors in the
United States. The centrifuges utilised by the $3 billion plant
are reported to consume only about 5% as much electricity,
per unit of enrichment, as the gaseous diffusion technology
employed by USEC Inc (Bethesda, Maryland). While USEC
works on a new centrifuge-based enrichment technology,
the US Energy Department in May extended a $2 billion
loan guarantee to another prospective European rival –