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Feb 08, 2014 | 01:00 AM

Is it time to shred the shredders?

Tags  scrap shredders, auto shredders, ferrous scrap

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NEW YORK -- Oklahoma resident Eileen Rowley claims that windows have been cracked and house foundations damaged due to “sonic booms” permeating her neighborhood. And she’s not alone.

Earlier this month, Rowley and several other residents of her Tulsa neighborhood announced plans to pursue a class-action lawsuit against a major recycler, alleging that the improper use of a key piece of equipment has made their homes and businesses unstable.

The alleged culprit? An auto shredder operated by a nearby scrapyard, which has denied claims that the unit has caused any structural damage to surrounding buildings.

Rowley’s might be one of the more remarkable stories to come out of the shredder branch of the domestic ferrous and nonferrous scrap sector in recent months, but it is far from the only drama being played out daily in a business that has seen its ups and downs against a backdrop ripe with challenges.

Today’s shredder landscape is marked by issues ranging from thin and diminishing margins to undisciplined buying practices, lower metal yields, mounting shredding capacity, and a curtailed appetite for shred among the nation’s long-product mini-mills resulting from the persistent funk in construction.

Recent upticks in building activity, predictions of a steady shift in preference by electric-furnace melters toward shred as a charge material and the ever-changing role of scrap exports in the supply/demand equation for shredded material offer hope for better days ahead.

In the interim, however, operators are slicing and dicing in response to what many see as a profit-sapping overhang of shredder capacity. Shredders have been idled by a number of recyclers, including Commercial Metals Co., Irving, Texas; David J. Joseph Co., Cincinnati; Gerdau Long Steel North America, Tampa, Fla.; OmniSource Corp., Fort Wayne, Ind.; PSC Metals Inc., Mayfield Heights, Ohio; and Sims Metal Management Ltd., New York. And more shutdowns are expected throughout the rest of 2014.

For a closer look at the changing dynamics and interplay of U.S. shredding capacity, scrap exports, electric-arc furnace-based steel production and the domestic price of shredded scrap, AMM has prepared the accompanying infographic.

Download the infographic at no cost, and if you like it, please feel free to share it.

Author

Jo Isenberg

Jo Isenberg is executive editor of AMM. She has been covering the steel industry for over 30 years and has served as editor of AMM for the last 11 years – the most successful decade in the publication’s long history.

  • The accompanying infographic incorrectly represent Wisconsin as having no shredders when in fact there are at least half a dozen shredders in operation in WI.
    Bob Apr 02, 2014
  • The pendulum is swinging the other way in the shredder world and allowing for small/medium sized companies to purchase small/medium sized shredders that will render serious returns on captive flows. The mega shredders are dinosaurs....
    Justin Mar 11, 2014
  • This has been an ongoing problem with CMC in Tulsa. The machine has been nothing but a headache for local residents and business owners. Power surges, explosions, and destroyed roads and lack of concern from local management...
    chase Feb 11, 2014

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