Scrap market hurt by oversaturation

Apr 07, 2014 | 05:29 PM | Sean Davidson

Tags  scrap, Midwest scrap, shredders, ferrous scrap, Institute of Scrap Recycling Industries, Sean Davidson

LAS VEGAS — Scrap industry margins are being hurt by a saturation of scrap companies and shredders across most urban areas of the country, and are becoming one of the biggest concerns in the market.

Weak scrap flows into dealer yards, rising operational costs, increased government scrutiny and a depressed export market were the other major challenges outlined by many industry participants in an informal poll conducted by AMM ahead of the Institute of Scrap Recycling Industries’ national convention in Las Vegas this week.

Almost every company cited excess auto shredder capacity in most parts of the country, adding that their margins have been compressed in recent years.

"There needs to be 20-percent fewer shredders, but we continue to head in the opposite direction. The yard solution shouldn’t be ‘add a shredder and it will fix all my problems,’ " one Midwest scrap dealer said.....

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