Scrap firm buy may ease price swings Busse

Nov 13, 2007 | 03:14 PM |

Steelmaker Steel Dynamics Inc. (SDI) bought scrap processor OmniSource Inc. as a way to soften scrap price swings, cut scrap transportation costs and trim working capital by lowering scrap inventories, not to boost mill profits at the expense of a supplier, according to Keith Busse, SDI's president and chief executive officer.

"With a lower capital investment and assets required, the scrap industry generates a strong return on assets deployed," Busse said Tuesday at AMM's Scrap Conference in Scottsdale, Ariz. "Our expectation is that in the not-too-distant future we will see margins in the scrap industry trend upwards, based on strong global demand, improvements in technology and continued consolidation in the scrap industry."....

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