Doing the work

Columns - Editor’s Letter

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September 3, 2019

Scrap processors know that aluminum markets have presented challenges in the form of pricing and spot sales for the last year at least. The trade situation with China has contributed in part to the overabundance of aluminum scrap available on the North American market. That country has imposed tariffs on U.S. aluminum scrap imports as well as scrap import restrictions that have affected the flow of this material.

While it might be tempting to use that old chestnut, “It is what it is,” to describe the market for aluminum scrap, that particular phrase “abdicates responsibility, shuts down creative problem-solving and concedes defeat,” writes Peter Economy in a column that appeared in Inc. in November 2015.

“A leader who uses the expression is a leader who faced a challenge, failed to overcome it and explained away the episode as an inevitable, unavoidable force of circumstances,” Economy writes.

Rather than adopt that mindset of inevitability, it might be more helpful to remember that some things are within your control and to focus your actions in those areas.

As one scrap processor says in the Aluminum Commodity Focus, “Out of balance,” starting on page 44: “It is tough, don’t get me wrong. But it doesn’t have to be the doom and gloom that a lot of people are talking about.

“Rather than adopt that mindset of inevitability, it might be more helpful to remember that some things are within your control.”

“Prices are low and demand is not great for certain grades,” he says. “But there are things we can do to survive that.”

This processor reminds us that sometimes you just have to do the work, no matter how difficult that work might be. And in the aluminum sector, this is one of those times.

While his company traditionally did not export much aluminum scrap, it has been exporting more of this material in 2019. “We’ve been able to keep material moving and keep prices as high as possible because of our global network,” he says. “We can find a sale that is a little better than here going export.”

Another source also mentions how his company has focused on establishing relationships with aluminum scrap consumers in developing markets, which has helped it maintain the flow of material.

The low-price environment also has affected scrap processors’ margins as mills’ spreads have softened. But one processor says his company has been able “to pass along some of those price changes to our customers, too.”

In difficult markets, it’s also important for company leaders to look to their entire team for possible solutions, Economy writes. He adds: “Even if a leader racks his brain for a solution to the challenge, yet can’t find one ... he should realize that his team contains a wealth of unique experiences and perspectives to contribute. It is what it is negates their value.”