NEW YORK A new metal recycling company in Washington state is poised to compete in the ferrous scrap bulk export market, bringing the total number of bulk exporters in the Pacific Northwest to three.
Longview, Wash.-based PNW Metal Recycling LLC, which launched in April as a joint venture between R.S. Davis Recycling Inc., Clackamas, Ore. and Portland, Ore.-based Rivergate Scrap Metals Inc. (amm.com, April 17), has started collecting ferrous scrap for its first bulk vessel shipment at its 18-acre facility, according to several market participants.
A company spokesman declined to comment on the development, while others in the region said that they had been approached by PNW for ferrous scrap.
"They are now openly stating that they have a contract for fall cargo. Cargo is supposed to load in Longview. The new yard is not located on the Columbia River. They will need to truck product to the Port of Longview for cargo loading. They are starting to stage product in this new yard," said one market participant.
Market speculation is rife that a South Korean producer has given PNW its first bulk vessel order, rumored to be around 25,000 tonnes of ferrous scrap with a shipment date of late August or early September.
Once loaded and shipped, the vessel will officially make PNW Metal the third bulk cargo operator out of the Portland-Seattle region in addition to the regions largest bulk shipper, Portland, Ore.-based Schnitzer Steel Industries Inc., and Portland-based Metro Metals Northwest Inc.
Regional players estimate that the company will be able to load one bulk cargo every two months, and many were skeptical of its viability.
"They hired a stevedoring company out of Los Angeles. We will see if it works. It will take them about 2 months to collect a 25,000-tonne vessel," said one regional supplier.
Other market participants were more dismissive.
"Theyre trying but it will not work. They would need to save up for a year to get enough for a cargo. They have never done a cargo. So you think Korea is going to buy from someone never having done a cargo and cant load for three months?" said a third market participant, while a fourth said he questions the companys ability to load bulk cargoes.
"They dont have enough scrap but theyd like to get it. Its like me wanting to load a vessel but its not realistic," said a senior executive at one regional scrap company.
One trader said PNW Metal will also be at a freight disadvantage to the bigger players who ship larger vessels from better located ports and consequently secure lower freight costs per tonne.
Nevertheless, PNW Metals entry as a bulk player is a significant development and could displace current supplier arrangements, said a second supplier.
"This will bring more competition to an already competitive market, which is good for suppliers," he said.