PITTSBURGH Sims Metal Management Ltd. has temporarily idled its shredder in North Haven, Conn.
The company confirmed that unprocessed material is being routed to its new shredder in Johnston, R.I. The company also owns a deep-sea export facility in Providence (amm.com, Aug. 14, 2012).
"Our goal is to move capacity closer to the source of the scrap material. We are currently not using North Haven while we trial the new shredder in Johnston. We are keeping the North Haven shredder operational and will use it accordingly as business needs develop," Robert A. Kelman, president of Sims North America Metals division, said.
Sims, the worlds largest recycler, recognizes that the industry is facing overcapacity, he said in October (amm.com, Oct. 30).
"Our goals are to remain pragmatic and to work towards meeting changing requirements of the scrap marketplace," Kelman said.
The Connecticut shredder yard is still buying material across its scales. Sims is hauling material from Connecticut to Rhode Island and bringing back the zorba and auto shredder residue.
"They invested a lot of money in their (Connecticut) downstream, so it makes sense to run scrap up and run fluff back on the return trip," a competing exporter said.
The 10,000-horsepower Rhode Island shredder is capable of producing 450 tons per hour. The Connecticut shredder has a better downstream, but is a 3,000-hp unit capable of producing 120 tons per hour, a source familiar with the operation said.
It costs the New York-based recycler about $25 per ton to move the scrap to Rhode Island, but it is cheaper to export out of Providence because the company owns the Rhode Island export facility outright, one source said. In Connecticut it leases space and pays fees, making exporting from there more expensive.
"If the cost of export out of Providence is cheaper, maybe at end of the day it is a win-win," the competitor added.
The Rhode Island port is capable of loading 100,000 tons, while the Connecticut port can load 80,000 tons.
But the company said it has no intention of pulling out of the Connecticut market. "We have a full interest in continuing our relationship in Connecticut and are fully committed to the Connecticut export market," a Sims spokesman said.
Sims idled its Mobile, Ala., shredder in November, citing market conditions (amm.com, Nov. 21), and earlier this year sold its Birmingham, Ala., shredder (amm.com, July 26).