Steel Dynamics Inc (SDI) continued its quest for vertical integration with the purchase of another shredder in Indiana, which will increase the self-sufficiency of its three Midwestern steel mills.
The Fort Wayne, Indiana-based steelmaker's metals recycling arm, OmniSource Corp, has acquired Scrap Metal Services LLC's (SMS) auto shredder in New Carlisle, Indiana, which is capable of processing up to 20,000 tons per month.
"It was a sale from SMS to Omnisource. This is part of the SMS transformation as we focus more on our mill services business. We continue to retain strategic commercial industrial accounts and locations," SMS' chief executive officer Jeremy Kirchin told Fastmarkets on Monday February 24.
A source familiar with the situation said the location was closed on February 24 and will reopen the following day under the OmniSource banner. This news did not surprise market participants since rumors of this acquisition have been circling the industry for a few months. Further consolidation of the scrap market is expected to continue throughout this year.
This will be OmniSource's third shredder in Indiana - the other two are located in Fort Wayne and Indianapolis - that will supply its steel mills in Indiana. The New Carlisle shredder is located 90 miles from SDI's structural and rail mill in Columbia City, 115 miles from its flat-steel mill in Butler and 160 miles from its bar mill in Pittsboro.
This is the third time that the New Carlisle shredder has changed hands. It was originally owned by the now-defunct Randy's Metal Recycling Inc, before it was sold to SMS in September 2014, after Randy's ran into financial trouble.
Fastmarkets' price assessment for steel scrap No1 busheling, consumer buying price, delivered mill Chicago was $290 per gross ton in February, down 3.3% from $300 per ton in January.