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Iron Giants

Features - Scrap Industry News

A global market leads to the creation of large-scale, multi-national scrap recycling firms.

Brian Taylor March 25, 2008

Throughout this decade, Recycling Today has compiled lists of the largest United States or North American recyclers in several market segments.

Ideally, these lists have provided some insight into which companies are most active in the collection, processing and consumption of scrap materials. (Click here to view the ranking of the largest multi-national scrap recyclers.)

Thus far, though, the lists have primarily addressed the flow of material on the North American continent.

The world of recycling continues to grow smaller, however, so the timing may well be right to take a look at the buyers and processors of secondary commodities who operate beyond North America.

KEY QUESTIONS

In compiling a list of the Largest Multi-National Scrap Recyclers, several key questions had to be asked and answered:

Q. What companies are eligible?

A. "Multi-national" has been defined as companies with processing operations in more than one nation.

Q. Which materials should be considered in the ranking?

A. To address the single largest segment of the magazine’s readership, scrap metal was identified as the first segment of the market to be examined.

Q. How would the size of companies be determined?

A. The volume of ferrous scrap accepted for processing or shipment has been made the measuring stick. In the case of three large, multi-national stainless steel recycling companies, a stainless steel volume figure was substituted. Sizable nonferrous specialists can ideally qualify for a separate list that Recycling Today may compile at a later date. 

The wide spectrum of the recycling industry ultimately means that several multi-national lists would have to be compiled to pay proper attention to the recycling of nonferrous metals, paper and plastics.

But even with a list concentrating primarily on iron and steel scrap, the difficulties of properly identifying deserving companies were many.

Even with the breadth of information offered by the Internet, the barriers of language and reluctance by privately held companies to publicize their activities assured that some deserving companies do not appear on the first edition of this list.

The editors of the Recycling Today Media Group, as always, are happy to call upon our reading audience for help.

If you know of or work for a company that qualifies for this list, please let us know and we will make sure we contact that company as well as let our readers know about it. Editor-in-Chief Brian Taylor can be contacted via e-mail at btaylor@gie.net or by phone at (330) 523-5324.

GLOBAL GOLIATHS 

Several of the companies on the list of Largest Multi-National Scrap Recyclers are publicly traded and have been growing by acquisition quite publicly.

Australia’s Sims Group is in the midst of a major attempted acquisition that would add another 5 million tons of ferrous scrap processing output to its total. Should it meet board of directors and regulatory approval, Sims will be acquiring Metal Management Inc., a Chicago-based scrap recycling firm with about 40 processing plants in the United States.

Sims has operations in Europe (in the United Kingdom), but not on the scale of TSR Recycling, the iron and steel scrap processing giant that was formerly part of steelmaker Thyssen-Krupp.

Western Europe is also the home of France’s CFF Recycling and the United Kingdom’s European Metal Recycling (EMR). Each of these sizable companies has been expanding their geographic footprints for several years.

CFF, based in Paris, has had facilities in Mexico and Texas for several years, while EMR has more recently been buying plants in the United States as well as the European continent. Interseroh is a German-based company that has branched out into neighboring countries. (See "Circular Logic" in the May 2007 edition of Recycling Today.)

American-based giants like Ferrous Processing & Trading, OmniSource and Gerdau Ameristeel qualify with a presence on the Canadian side of the border, while Canada’s Triple M Metal does the same with a New Jersey outpost.

Steelmakers have what could be a growing presence on the list. Among the large iron and steel recyclers owned by mill companies are: OmniSource, recently purchased by Steel Dynamics Inc.; David J. Joseph, Cincinnati, purchased by Nucor Corp.; Commercial Metals Co., Irving, Texas, a long-time steelmaker/recycler; Gerdau AmeriSteel Recycling, Tampa, Fla., which serves North American mills owned by Brazilian metals firm Gerdau; and Smorgon Steel Recycling, now owned by Australian steelmaker OneSteel.

To what extent steelmakers should control their raw materials supply networks is a management quandary almost as old as the industry. To some extent, electric arc furnace (EAF) steelmakers have played up their lean and nimble status by saying they were not encumbered by the vertical layers of integrated steelmakers.

To what extent owning scrap yards will begin to eat into this lean and focused attit

Making The List

Processing and trading on a global scale has been standard practice for the largest stainless steel scrap processors, with ELG, Cronimet and Keywell LLC all having facilities on more than one continent. Two of those firms make the inaugural version of this list, while Keywell fell just short.

One multi-national firm with largely solid waste industry operations and roots, Suez-SITA, also made the list, while several others, such as Veolia Environmental and Waste Management Inc., were in the running. These companies may handle far more solid waste by volume, but by collecting steel cans, appliances, electronic scrap, magnetic incinerator residue and, in some cases purchasing scrap yards, their scrap metal volume adds up.

ude remains to be seen, as the ink on the contracts of most of these acquisitions is not yet dry.

One of the examples that is longer-standing, Commercial Metals Co. and its CMC Recycling Division, has traditionally allowed its recycling division to have flexibility to buy material at the best price and sell material to the highest bidder.

Back in 1999 for a Recycling Today article, then-CMC Recycling head Harry Heinkele described it this way: "We basically keep things at arm’s length. They (CMC’s mills) buy from us as would any other steel mill. They have their own marketing team and do their own buying. They definitely buy more material from others than they do from us."

Regarding scrap buying, Heinkele said, "All of our purchases are done locally. Facility scrap buyers bid on [material] and set their own prices to compete locally."

In an era of real or perceived commodity scarcity, it remains to be seen whether the steel company CEOs of today have that same arrangement in mind.

NEW REAL ESTATE 

In another sweeping trend, shippers of scrap are aware that Asia is increasingly the destination for these metals.

While some of this scrap is put into consumer products that head back to Europe and North America, a great deal of it is helping build the infrastructure of the emerging economies of Asia.

Subsequently, the generation and processing of scrap metal in Asia is beginning to blossom in its own right. The existing industries in Japan, South Korea and Taiwan are being joined by emerging processing sectors in China, India and other rapidly industrializing nations.

Should the growth pattern of the scrap industries in these nations mirror some of the manufacturing efforts, a combination of overseas capital, government investment and native-born entrepreneurs will all be involved in setting up balers, shredders and other processing equipment at new scrap yards throughout Asia.

 
The author is editor-in-chief of
Recycling Today and can be contacted at btaylor@gie.net.

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