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Scrap dealers are taking steps to combat theft brought on by soaring secondary metals prices.

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March 24, 2006

The surge in prices for many scrap metals, especially historic high prices for copper and aluminum, has had an unsavory side effect that is plaguing the scrap industry: theft. Throughout the past several months, a number of metals thefts have made the news.

While the consumer media occasionally has taken a somewhat humorous look at the antics of criminals, which includes the stripping of aluminum siding from houses, pilfering of manhole covers from city streets and the taking of statues and monuments, for many scrap recyclers, such thefts aren’t a laughing matter.

Although stealing for scrap value is not new, with the record-high secondary commodity prices, incidents of theft have become more rampant. And the issue is not isolated to the United States. Manhole covers also have been disappearing in major cities throughout the world.

In the United Kingdom, several famous bronze statues have been stolen during the past year, with the recent theft of "The Watchers," a bronze sculpture, having an estimated value of £600,000 ($1 million). According to British reports, roughly 20 bronze statues and sculptures have been stolen in the past six months. Other high-profile thefts include bridge structures, rails from rail lines and various metals from power plants and other buildings.

The prevalence of scrap metal theft cases can cast a less than flattering light on the scrap recycling industry. Several scrap dealers say many people perceive that the scrap dealers are complicit in the thefts.

UNDER SCRUTINY. Companies that primarily deal with commercial accounts are less concerned about theft because many of these recyclers have long-established relationships with their industrial customers and do not rely on the peddler trade. This gives them better control of what comes into their yards.

But for companies that have a sizable street or peddler business, the challenges are quite significant. One Midwestern scrap dealer says the key to avoiding problems with stolen material is to keep strong business practices in place. "With problems growing, it is more critical for you to buy material from people who you know," he says.

Some of his company’s policies include getting addresses from peddlers along with signed receipts. "We also take it seriously when we receive calls about potential stolen material," he adds.

More scrap dealers are also photographing and noting the license plate numbers from the peddlers who bring in material to their yards. This is most common in cases when the peddler is a person with whom the company does not have a long-standing relationship.

In Minneapolis, American Iron has received some recognition for helping in the recovery of bronze plaques that were stolen from the area. According to Daryl Parks, general manager for American Iron’s Minneapolis yard, the company has been making attempts to reduce or eliminate the theft of scrap metal and its sale in the Minneapolis area.

While acknowledging that theft is on the upswing because of higher prices, American Iron has been working on maintaining a theft communication line in the area with the help of other local scrap yards. While this system has been in place for several years, its use has increased lately.

Regulating Recyclers

While many companies that handle a sizable volume of street traffic say they are scrutinizing loads more carefully and requiring identification and information from customers, some cities are considering imposing more regulatory control over scrap yards because incidents of theft are so high.

 

The city of Wichita, Kan., is considering imposing a number of regulations on scrap recyclers in the city, which the city says will help to reduce the theft problem.

 

Along with requiring additional information from customers, city lawmakers discussed requiring scrap recyclers to provide the city with information on every sale and to adopt a tag and hold policy, whereby a scrap recycler would be required to hold material it has purchased for a certain time.

 

Several dealers have noted that market uncertainty for a grade like copper makes it foolish to hold scrap copper for any period of time.

 

Another city that is debating toughening local ordinances to combat metal theft is Tucson.

 

Mike Anderson, a spokesman for the Tucson City Attorney’s Office, says that a draft ordinance is slated to go in front of the mayor and city council at the end of February for consideration. The ordinance would mandate that scrap metal recyclers provide more information on sales and purchases to the city. The ordinance also would put a number of other steps in place to prevent the stolen scrap metal, principally scrap copper, from being filtered through the scrap recycling industry. Beverage cans and non-metallic recyclables would not be included in the ordinance.

 

Anderson says Tucson has seen a sharp increase in metal theft as drug problems grow throughout the country.

 

The ordinance being considered would make it unlawful for scrap metal dealers to fail, neglect or refuse to provide a report to the chief of police within two business days of a transaction. The report would also need to include the license number and state of issuance of the vehicle used to deliver the scrap along with a description of the material and its weight.

While violating the standards of the ordinance would be a misdemeanor, the ordinance also stipulates that the city could either revoke or refuse a license if the scrap company failed to act according to the city ordinance.

Parks says that when American Iron is told of material that has been stolen from the area, it sends out an alert to recyclers in the region. This move will result is fewer places for a thief to sell stolen material.

"We encourage manufacturers to contact us if they have a theft," Parks says of the theft line process. In addition to providing a list of missing material, Parks also says submitting a drawing of the material is also encouraged. The notice is then sent out to scrap dealers, oftentimes the larger operations in the area.

While many larger scrap yards may be on the lookout for material that could be stolen, a number of scrap dealers imply that some smaller facilities, on the fringes of the scrap industry, see the purchase of stolen scrap as an opportunity to get the material at bargain prices.

Parks says the majority of the thefts are local in scope. It isn’t likely that thieves who steals aluminum siding will shop regionally for the best price. Rather, they will look at selling the material to a local processor. Some scrap recyclers say that local theft hotlines could be effective in deterring theft in these cases, because preventing people from selling the scrap makes the material less valuable.

Parks says American Iron probably receives four or five requests per week notifying the company that something is missing and that it be added to the list.

Mike Melton, general manager of White City Metals, White City, Ore., says his company is vigilant about the procedures it uses to reduce the amount of stolen nonferrous scrap coming to its yards. Melton takes pictures and gathers enough information on the potential seller as a way to ensure that the material has not been obtained illegally. Melton also says that when a suspect load comes in the yard, he will contact local law enforcement offices to alert them.

While working more closely with the aggrieved parties is a step for some scrap recyclers, it isn’t always the case.

NO COOPERATION. Rutherford Electric Membership Corp., a Hickory, N.C., electric cooperative, has seen a significant jump in the amount of theft taking place at its substations.

Colon Saunders, manager of operations for Rutherford, says that while in the past the company might have a theft every year or so from one of its 42 substations, it has seen seven incidents in the past two months, as copper prices continue to increase.

Saunders says that following the thefts, employees from Rutherford have approached nearly 20 scrap yards located near the thefts to see if any of the material had turned up. However, he notes that no company has come forward to report the thefts. "They seem to have a non-caring attitude," Saunders says.

He estimates that the seven break-ins so far have resulted in the theft of around 4,000 pounds of copper. Repairing and replacing the stolen material has cost Rutherford around $7,000.

To reduce theft, Saunders says Rutherford Electric has taken a number of steps, including increasing inspections of its stations, talking to local police, installing cameras at the substations, painting the copper gray and offering a reward to anyone who reports a theft. But so far there has been little in the way of any leads.

CAUGHT RED HANDED. While being on the lookout for stolen material is one issue, some scrap dealers also are confronted with more audacious thieves who may go so far as to scale fences to attempt to steal metal from the yards themselves. American Iron’s Parks says in one instance a would-be thief was caught in the company’s yard and asked if he could take the material because "he worked so hard to get it."

To guard against such instances, more scrap recyclers are hiring security guards, including off-duty policemen. Some scrap dealers have also installed security cameras at their facilities to deter would-be thieves from raiding their yards when they are closed.

While theft will likely continue as long as many grades of scrap metal are at such high prices, Melton suggests that companies lock away any equipment or material in an enclosed facility as a preventative measure.

However, for the theft that takes place at exposed new housing construction sites, there are fewer options. One, says Melton of White City, is the possibility of hiring security guards to patrol housing developments, though this comes at an additional cost.

Even more troubling, some scrap dealers have been robbed at gunpoint by people who were well aware that some companies keep money on hand to pay customers who may bring in material across the scale.

From a national perspective, Chuck Carr, vice president of member services with the Institute of Scrap Recycling Industries Inc. (ISRI), Washington, notes that the association sends out scrap theft alerts via e-mail to its members and to other parties when a significant theft takes place. The alerts provide a description of the missing material and give association members an opportunity to keep on the lookout for stolen goods. "No reputable scrap dealer wants to take it," Carr notes.

For the time being, it seems, watching the metals markets may also mean watching out for stolen goods.

The author is senior and Internet editor of Recycling Today and can be contacted at dsandoval@gie.net.