Auto scrap market has challenges, varied results

Dec 18, 2011 | 07:00 PM | John Ambrosia

Tags  automotive scrap, scrap supply, scrap lifecycle, John Ambrosia

When it comes to automotive scrap supply and demand, the only thing certain is the borrowing of a time-tested auto industry phrase: Your mileage may vary.

There are two sides that contribute to the boom-or-bust cycles of automotive scrap availability and pricing: the buyers of the scrap used to make steel, aluminum, copper and other products; and the generators and sellers of the scrap collected from vehicles taken out of circulation.

The economics of the recycling business determine the way end-of-life vehicles are processed in the United States, as one industry insider said. Just as automakers are working on cost-effective solutions that will improve the recycling rates for junked cars and trucks, dismantlers are removing those components for which commodity prices make separate processing economical. Similarly, shredding companies choose their technologies to maximize recycling, which also has a positive effect on their revenue.

The scrap pulled from recycled vehicles includes, but isn’t limited to, aluminum wheels, aluminum cast, irony aluminum, dirty motor blocks plus cast iron, heavy melting steel, rotors, starters, alternators, alternating current (AC) compressors, carburetors and throttle bodies, power steering pumps, aluminum and cast iron water pumps, copper harness wire, copper radiators, aluminum radiators, aluminum and cast iron brake master cylinders, whole transmissions (automatic and standard) and complete motors (aluminum blocks with transmissions as well as cast blocks with transmissions).....