Metals

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Recent news from the various sectors of the recycling industry

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September 1, 2016

SDI cites ‘positive momentum’ in 2Q 2016 earnings report

Fort Wayne, Indiana-based electric arc furnace (EAF) steelmaker Steel Dynamics Inc. (SDI) has announced second quarter 2016 net income of $142 million, or 58 cents per share, on net sales of $2 billion. SDI says its second quarter 2015 sales were $2 billion, but its net income was just $53 million, or 22 cents per share.

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SDI’s net sales in the first quarter of 2016 were $1.7 billion, garnering a net income of $63 million, or 26 cents per share.

Mark D. Millett, SDI president and CEO, says the company’s scrap recycling operations, operating as OmniSource, turned in a better quarter than several previous ones. “We saw improved volumes and profitability in our metals recycling platform for the second quarter 2016,” he says.

SDI says its metals recycling operations “achieved a meaningful improvement in profitability based on a 30 percent improvement in ferrous metal margin, combined with increased shipments.”

Operating income from its metals recycling operations in 2Q was $15 million compared with $6 million in the first quarter of 2016.

Foundry, forging company consolidates its brands

Southfield, Michigan-based Metaldyne Performance Group Inc. (MPG) has announced it is consolidating its portfolio of metals production and component manufacturing brands under the MPG name. Among the companies to adopt the MPG name will be the Grede iron foundry business unit. (Ferrous scrap consumer Grede was profiled in the April 2010 issue of Recycling Today, available at www.RecyclingToday.com/article/ferrous-consumer-feature-april-2010.)

MPG says some of the consolidating brands have been in existence for nearly 100 years. In addition to Grede, the list of companies and brands includes HHI, Cloyes, Metaldyne, Jernberg, Impact Forge, NovoCast and FormTech.

“Our business was formed nearly two years ago through a combination of three metal-forming technology manufacturing companies,” says MPG CEO George Thanopoulos. “Integration has gone exceptionally well and exactly as planned. As such, we can now take the next step to brand ourselves solely as MPG.”

Doug Grimm, the former Grede Holdings chairman, president and CEO, says the commitment to one brand reflects a unified organization, but all the legal entities and reporting segments in the company will remain intact.

“The change to MPG reflects an ongoing integration of great companies that provide global customer solutions using advanced engineering and product development expertise,” says Grimm, who is now the president and chief operating officer MPG. “Our former iconic brands combine to make a stronger ‘One MPG’ and will further enhance our progress toward our long-term growth targets.”

MPG describes itself as a leading provider of highly engineered lightweight components for use in powertrain and suspension applications for the global light, commercial and industrial vehicle markets. It uses metal-forming manufacturing technologies and processes that include aluminum die casting, forging, iron casting and powder metal forming. The company’s global operations encompass more than 60 locations in 13 countries in North and South America, Europe and Asia staffed by approximately 12,000 employees.

Aleris inks contract with Airbus

The aluminum manufacturer Aleris, headquartered in Cleveland, has signed a multiyear contract with the France-based airplane manufacturer Airbus to supply aluminum plate and sheet to be used in the production of all Airbus aircraft programs. The contract starts in 2017 and includes the supply of technically advanced wing skin material, Aleris says.

“This vote of confidence from Airbus validates our strategy to expand our global rolled products footprint and invest in technology as we are now able to extend our range of aerospace products and better serve Airbus,” says Sean Stack, president and CEO of Aleris. “With world-class facilities strategically positioned in Koblenz, Germany, and Zhenjiang, China, we are in a strong position to support the significant growth projected in the aerospace industry, particularly in the Asia-Pacific region.”

The agreement extends Aleris’ relationship with Airbus to include applications such as aircraft fuselage, wing structures and wing skins—a highly specialized product that requires additional processing and premachining.

The supply to be used for the Airbus contract will come from Aleris’ facilities in Koblenz and Zhenjiang, the latter of which represents a $350 million greenfield project for Aleris. The Zhenjiang facility was qualified by Airbus for the production of aerospace material in 2015.

ISRI inquires about loose change

The Washington-based Institute of Scrap Recycling Industries (ISRI) has made a request to U.S. Treasury Secretary Jacob Lew and U.S. Mint Principal Deputy Director Rhett Jeppson to reconsider the current blanket moratorium on the repurchase of mutilated coins.

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The moratorium is having a significant detrimental impact on U.S.-based recyclers who, suffering from low prices and very slim margins for several years, are facing additional financial difficulty because of their inability to redeem mutilated coins in their inventories, according to ISRI.

U.S. recycling facilities have been recovering coins from scrap for decades. The business started when recyclers would find loose coins that had fallen to the ground during the recycling process for cars, vending machines and other products. The business evolved with advances in sorting technology and the advent of new machinery capable of identifying very small items. As a result, the ability to purposefully recover coins in significant quantities grew quickly and became an integral part of many recycling firms’ operations and product lines, ISRI says.

“U.S. domestic recyclers, who have been suffering from low prices and very slim margins over the past few years, are facing additional financial difficulty because of their inability to redeem the mutilated coins they have in inventory,” says ISRI President Robin Wiener. “While ISRI fully supports enforcement activities against those companies that abuse the redemption program through the attempted sale of counterfeit coins, there is no need for a blanket moratorium that effectively punishes all those who legitimately rely on the program for their ongoing businesses.”

AMG Resources buys stake in stainless recycler

Pittsburgh-based AMG Resources Corp. has announced its affiliate’s acquisition of a 50 percent interest in Allegheny Raw Materials LLC (ARM), a processor and marketer of stainless steel, alloys and other specialty scrap metal products.

“Allegheny Raw Materials has an unmatched reputation in the scrap industry for delivering value-added products and services to its specialty customers and will be a tremendous complement to AMG, which has a strong focus on supplying known-analysis scrap and other specialty products,” says Eric Goldstein, president of AMG Resources. “This transaction will strengthen both ARM and AMG and enable both to better serve their customer bases.”

ARM, also based in Pittsburgh, operates five scrap processing facilities in western Pennsylvania, as well as a ferrous and nonferrous scrap brokerage business. In addition, ARM’s mill services division develops and delivers specialty blends and optimized least-cost charges and performs on-site processing, handling and testing services for specialty steelmakers.

With this transaction, AMG and its affiliates operate 17 scrap processing facilities and 17 commercial offices in the United States and United Kingdom. AMG also is a marketer of prime and secondary steel in the United States and internationally and, through its International Steel & Counterweights affiliate, manufactures counterweights and other steel fabrications for a variety of applications.