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Published: 10/7/2004

Strong demand pulls prices near record at area scrap yards

BY MARY-BETH McLAUGHLIN
BLADE BUSINESS WRITER
Business in aluminum is brisk, officials at State Paper & Metal, on Central Avenue in Toledo, report. Business in aluminum is brisk, officials at State Paper & Metal, on Central Avenue in Toledo, report.
ALLAN DETRICH / BLADE Enlarge

Prices for scrap metal, especially steel and iron, are flirting with all-time highs, local recyclers say, thanks to a rebounding economy and a building frenzy in China.

"It's a good supply-and-demand market," said Chuck Carr, a spokesman for the Institute of Scrap Recycling Industries in Washington. "The scrap industry is very cyclical and we're seeing prices that are appreciably at the high end of our peaks."

The institute said the American scrap recycling industry's products are worth at least $20 billion a year.

Recyclers last year handled more than 125 million tons of products destined for use in the United States and overseas. That figure included 47 million tons of scrap paper and paperboard, prices for which are staying steady.

Sixty-eight million tons of scrap iron and steel also was recycled last year, as well as 4.3 million tons of scrap aluminum, 2 million tons of scrap copper, and 1.4 million tons of scrap stainless steel, all of which are in demand and fetching their highest prices.

"The economy is turning around because there's more construction, but there's also an awful lot of scrap going overseas," said Steve Fischer, account executive with Metal Management Ohio Inc. in Toledo.

"China is a huge market. They're building their infrastructure, the things that this country built at the turn of the last century."

All of that takes ferrous metals, such as steel and iron, pushing prices for these products that were well below $100 a ton just a decade ago up to an average of $150 a ton. Mr. Fischer said that because of the number of grades of metals it's tough to predict an average record high for the industry, but he said he wouldn't be surprised if prices keep rising.

Looking at the increasing prices of "number one heavy metal," a bellwether indicator in the industry, shows that "these are good days in terms of prices," said Bob Garino, director of commodities for the recycling institute.

He said that at the start of 2003, a ton of number one heavy metal was selling for around $100, was at $180 during this year's first quarter, and then peaked at a record $240 in March.

It is now around $200 a ton, and expectations are that soon it will climb again to $240 or above.

Nate Segall, vice president of State Paper & Metal Co. Inc. on West Central Avenue, said business is brisk in nonferrous metals, including aluminum from siding and cans.

Customers bringing scrap to his site are a cross-section, from people pushing shopping carts to construction workers, he said.

Kevin Little, co-owner of Lake Erie Recycling on Matzinger Road, said he has sold a great deal of material to a broker who then sells it in China.

Metal Management's Mr. Fischer said many of his customers gather metal from a number of sources. He predicts they will be busy for awhile.

"I anticipate the current need is going to continue at least through the end of the year," he said. "Who knows after that?"

Contact Mary-Beth McLaughlin at

mmclaughlin@theblade.com

or 419-724-6199.



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