As the annual AMM Scrap Conference approaches later in the fall, it seems fair to characterize the ferrous scrap world as a bit volatile. Although prices had a good run early in the year not falling from January through May the summer was a rougher ride for sellers. As with last year, scrap companies have faced some of their greatest challenges since the Great Recession helped to lower prices near the end of 2008. It hasnt been a bed of roses on the nonferrous side either.
At a time when scrap prices both ferrous and nonferrous are still at the lower end compared to the past decade in general, scrapyard operators and dealers are trying to make do with equipment that is sometimes decades old. Operators and dealers are understandably hesitant about spending money for new equipment. But with the advances in technology and digitization in the recent past, new equipment allows scrapyards to optimize performance.
As correspondent Bill Beck reports in this issue, an Illinois operator echoed that thought: For our ongoing capital expenditure program, we emphasize the sustained replacement of yard cranes. By doing that faithfully, you minimize maintenance costs, and you minimize downtime.
Scrap operators and equipment suppliers tell AMM that the current emphasis is on evaluating an operators whole supply chain from intake of raw scrap to shipments to customers; or to the landfill. In many cases adjusting the existing assets in light of inputs and customer preferences can yield meaningful improvements in returns, according to another article from correspondent Gregory DL Morris.
More than a few equipment suppliers have lately been emphasizing, or re-emphasizing their service offerings from maintenance and upgrades of existing systems to plant-wide optimization and even construction. There has also developed a growing trade in used equipment from yards that have been closed. That said, vendors maintain they are still selling a fair volume of new equipment.
New technology will likely continue to be a key item in the decision-making process of scrapyard operators and dealers when it comes to prioritizing capital expenditures for new equipment. And whether its spending money on back-to-basics items like cranes and rolling stock, or the latest x-ray systems for downstream separation, operators will take a long hard look at how that new equipment will help them optimize performance at a time when efficiency and customer satisfaction are at a premium.