Asian Demand Spurs Metal Recycler's Expansion

A Portland, Ore.-based metals recycler recently expanded its reach into Asian markets where an appetite for raw materials is seemingly insatiable.

Metro Metals Northwest Inc., via its Vancouver, Wash., subsidiary Pacific Coast Shredding, shipped 24,000 metric tons of ferrous scrap steel to Incheon, South Korea, Aug. 17. The company hopes the load -- bound for several metal products manufacturers -- is the first of what could be as many as half a dozen annual shipments to the country.

Manufacturers in South Korea and other parts of Asia are working to respond to strong demand from almost every sector of the economy. How long that demand will continue, and thus the frequency of Metro's South Korea-bound shipments in the future, is uncertain.

"The bottom line is, no one can tell whether this is going to last a month or 10 years," said Metro Metals President Victor Winkler.

Although Metro has shipped scrap to Taiwan and China from the Port of Portland, the Korea-bound shipment marks the first time that the company has charted its own cargo carrier.

Metro Metals is a conglomeration of several locally owned scrap companies that merged in 1999. Metro employs 160 people and dispatches a 54-piece fleet of trucks between Medford and Seattle to buy scrap metal.

Winkler said the company may broaden its services next year to include solid waste disposal and expanded recycling capabilities.

Meantime, the company is riding a wave of demand that has been building for years. World production of crude steel is projected to hit an all-time record of 1 billion tons this year, up from 964.8 million in 2003 and 903 million in 2002, according to Washington, D.C.-based Institute of Scrap Recycling Industries.

The rate customers in Korea and other parts of Asia are willing to pay for ferrous scrap recently hit a new peak of slightly more than $300 per metric ton. "The fact that scrap has gone up in this context is not much of a surprise. All the inputs required to make steel are seeing price increases, including coking coal, transportation, energy and the like," said ISRI director of commodities Bob Garino.

For Metro, global demand means Pacific Coast Shredding stays on track with plans laid earlier.

"When we opened Pacific Coast Shredding, we told the port that we anticipated to be doing some export shipping from Vancouver. We've grown enough that we have good volume and the timing was right," Winkler said.

Pacific Coast supports Metro by shredding oversize pieces of metal, mostly automobiles, at a $10 million facility built five years ago near the Columbia River on property owned by the Port of Vancouver. The shredder poses the only local competition for a similar operation owned by higher profile Schnitzer Steel Group. American City Business Journals