FULL OF SCRAP Aleris, e-auctions and the local sheriff? The ties that bind

Nov 01, 2007 | 09:44 AM |

The scrap industry is losing some of its human flavor as bazaar-style haggling becomes a breach of norms, digital auctions at computer terminals become more common and law enforcement's needs create gigabytes of transaction records.

The evaporation of Wabash Alloys LLC into Aleris International Inc. is part of the shift. Aleris, in existence for three years, has become the No. 1 U.S. secondary smelter group in aluminum. Its corporate style, even before reaching the top, has been to act decisively with little patience for dickering.

Paul Schaffer
Paul Schaffer
Aleris stations all its scrap buyers at headquarters, not at the smelters and sheet mills receiving the shipments. "The Aleris folks are much more disciplined in their approach to pricing," one scrap manager said. "There's a little bit more play with the other guys—more back and forth with Wabash and some of the other smelters—than with Aleris."

And Aleris' shopping lists reputedly are written in stone in terms of quantity and grades of scrap. Before Aleris took charge, "we could call (the Michigan smelter in) Coldwater with five, six, seven items I want to sell. What's your price on borings, what's your price on this, and make deals predicated on those items," one seller said. "Now they make the call and you have to be ready to supply whatever it is they want." There's no longer room for the seller to influence which grades will go into a particular shipment, he added.....

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