How we shrank the US ferrous scrap pool to a puddle

Jul 30, 2008 | 01:19 PM |

When petroleum prices took their first quantum leap four decades ago, it triggered a commodity crisis affecting metals like steel and many of the raw materials used to make them.

The U.S. steel industry also suffered a severe coronary back in the 1970s and underwent the equivalent of a quadruple bypass. Old steel mills were closed, coke ovens and blast furnaces were torn down and thousands of workers lost their jobs. The 1973 oil embargo was not the direct cause of the steel industry's problems, but it helped to expose how inefficient some steelmakers were in those days.

A decade or so later, when mini-mill technology was on the rise in the United States and around the world, if you asked some mini-mill executives if they needed to own scrapyards, they pooh-poohed the idea. In some ways, they were like today's drivers who keep buying oversized suburban assault vehicles—better known as sport utility vehicles—or high-powered diesel trucks with four-wheel drive for trips to the local mall. "There's no gasoline shortage," these people will tell you, "just a bunch of greedy oil companies gouging us for all they can get."....

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