Any attempts to assess the
future success of shredders begin with a look at demand.
Judging by changes over the past decade, that future could be
Since 2001, overall demand for
shredded material has increased by about 50 percent, making the
fragmented scrap the most popular grade in the ferrous scrap
market, according to U.S. Commerce Department figures. This
growth was fueled by export demand, the operational capacities
of mini-mills and breakthroughs in shredder technology.
Ten years ago, shredded scrap
accounted for about 24 percent of all sales; today that figure
has grown to 30 percent. A decade ago, shredded represented 33
percent of all export sales; last year it reached 40 percent.
And in 2001 shredded scrap grabbed about 21 percent of all
domestic scrap sales; that figure now stands at around 26
In raw numbers, an additional 6
million tons of U.S. shredded scrap were sold to domestic and
foreign buyers last year compared with a decade ago.
In fact, shredded scrap overtook
the heavy melting grades in 2007 for the top spot in scrap
demand (it should be noted that some sellers throw heavy
melting grades, No. 2 bundles and other material into their
shredders). Because of this long trend, many scrap sellers have
added shredder equipment to their yards.
But with the general economy
still an open question, the new question is whether this trend
will slow down or even stop in coming months. Opinions vary
widely on this point, with some predicting a return to high
levels of demand while others are more cautious.
"If mini-mills continue to see
their orders increase, then it stands to reason there will be a
greater demand for shredded scrap at some point in the
process," said Charles Bradford, a metals analyst and president
of New York-based Bradford Research Inc. "So in that scenario,
shredders will continue to be an important part of the overall
And there is room for growth, some in the industry say. An
executive with an eastern U.S. metals company said that "most
shredders are not operating anywhere near full capacity, so we
havent even seen the limits of how much material can be
prepared and sent into the market."