Local metal recycling firms see boost in business

Rick Wagner • Aug 9, 2008 at 12:00 AM

KINGSPORT — Scrap metal is a big and growing business these days, with prices and demand both high.

In 2007, the recycling industry — including more than metal — was a $71 billion business in the United States. Of that, $21.7 billion worth of scrap was exported, according to the Scrap Recycling Industries Inc., a trade association for the recycling industry.

The association represents 1,600 metal recycling businesses in the United States, about 50 percent of the metal recyclers in the country. That group handles about 80 percent of the volume in this country, said Bruce Savage, vice president of communications for the institute.

Savage said prices paid for bronze and copper, already high, jumped about a third in six months, while aluminum went up 25 to 30 percent in the same period. As for steel, he said it’s doubled in the past six months. “That’s just going out of sight,” Savage said.

He said recent spikes and continuing high prices for most metal is a perfect storm of sorts for the industry.

International demand, including metal needs for massive infrastructure going into China and India, is driving up demand for metal worldwide much as they are helping drive up fuel prices.

He said BRIC — Brazil, Russia, India and China — account for much of the demand, joined by Korea and Taiwan as well as Canada, South Korea, Mexico, Germany, Turkey, Japan and the United Kingdom.

“They (China and India) have a huge manufacturing base that needs those materials,” Savage said of demands in addition to infrastructure.

A weak U.S. dollar makes American metals even more competitive on the international market. Domestically, Savage said the demand for recyclable metals remains strong because it’s less expensive than getting metal from virgin ores. That also makes it environmentally friendly.

Metal recycling businesses report drastic increases

Area recycling dealers report that business is simply booming.

“My volume of business has tripled since February,” said Bradley Thompson of Thompson Metal Services Inc., a member of the metal association.

Thompson co-owns Thompson Metal Services with his father, Brad Thompson, and the business takes about all non-precious metals except for vehicle batteries, whole cars and catalytic converters. Since the Thompsons bought Kingsport Iron & Metal in 2004, he said their metal recycling business in Kingsport has grown 600 percent. It is located at 424 Riverport Road and is open to the public from 7:30 a.m. to 4 p.m. Monday through Friday.

“It started booming around the middle of 2004” for industries scrapping out obsolete equipment, said Thompson, vice president of the company, which also has a location in Piney Flats.

“A lot of times it was worth more as scrap than what they originally paid for it,” Thompson said.

“As far as the traffic off the street, it started picking up a little later when fuel began increasing,” Thompson said. “A lot of people that have been laid off or don’t have jobs are scrapping for a living,” Thompson said.

Thompson Metal buys from the public. The Thompsons also own Kingsport Iron & Metal, which serves industrial customers and is co-located with Thompson Metal.

“Dad started out with a pickup,” Thompson said of the company’s 1981 start.

He said one new source of metal for his business is loggers who don’t have timber to harvest but are using their trucks and equipment to pick up scrap metal.

While steel often ends up going overseas, Mark Sourbeer, Bristol, Va.-based area manager for Wise Recycling, said the aluminum cans collected by Wise and some other recyclers, including Rogersville Recycling, are sent to a Wise facility in Alabama.

That Wise facility is part of the third-largest can sheet producing operation in the United States.

In as little as six weeks the aluminum can be put back in new cans. With 25 years in the business, Sourbeer said he’s paid as little as 25 cents a pound for aluminum cans that now sell for around 75 cents or 80 cents a pound.

“Mostly in the past six months, we’ve had an increase of traffic,” Sourbeer said of the Kingsport business location at 3229 E. Stone Drive, open Tuesday through Saturday 8:30 a.m. to 4:30 p.m.

“People are simply going to basements, barns and backyards and gathering up stuff to get money for gas.”

The Jones’ business takes non-ferrous metals, including copper, brass, aluminum, batteries, radiators, and bronze — but no catalytic converters.

The same goes for Wise in Kingsport, although in Bristol it takes steel.

Linda Jones, who with her husband, Mickey Jones, started Rogersville Recycling nine years ago, has a drive-through recycling service. The business started after the recycling company where she worked as a buyer closed.

The business has grown from their basement to a separate location. She is the purchasing manager; he is the president. She said the drive-through service attracts all sorts of people, from the environmentally conscious to those needing money for gas or food.

“I have people coming in here to sell enough cans to buy a gallon of milk,” Jones said.

About half her accounts are industries.

Asked about interesting items taken, the Smiths recalled bags of cans with snakes in them, while Sourbeer said Wise in Bristol, Va., bought all the brass items from Dixie Pottery when it went out of business.

However, Sourbeer said he once bought an empty copper casket. “The strangest thing I ever bought was a copper casket. It looked like it had been used,” Sourbeer said. “It had a little dirt on it.”

Thompson said he’s bought steel caskets and that other odd things included a running bulldozer he’s going to try to sell intact and an old carnival ride he bought from another dealer a few years ago that was cut up and recycled.

Officials at Kingsport Auto Recycling, which takes whole vehicles, declined comment for this article. It is part of a company based out of Bluff City.

But in an interview earlier this summer, an employee at the Kingsport operation said people would drive in cars to be recycled, and trailers with cars often are lined up waiting to get in the business, which pays $12.50 per 100 lbs. for vehicles — up from $11.50 earlier this year. The payment is slightly less if the fuel tanks are not removed and punctured to let out any residual fuel.

To catch a thief

Sourbeer said the casket wasn’t stolen. But in the recycling business, copper and catalytic converter thefts have made the news nationwide, with thieves using metal cutting saws to take a converter worth $25 to $75 in scrap but costing hundreds or more to replace. The platinum, paladium and rhodium in the converters are what have value for recycling.

However, Savage said some savvy thieves, including some who recently hit Toyota of Kingsport, have simply unbolted the converters, likely for resale as “refurbished” converters worth more than the scrap value.

More recently, in Kingsport copper was stolen from homes on Dorothy Street, and Kingsport authorities have charged a man with those crimes.

And Jones said it turned out a man who recently brought more than 25 batteries to the business allegedly took them from a Hawkins County convenience center. The county ended up getting the money for the batteries, not the alleged thief.

The business pays $3 each for automotive batteries or 10 cents a pound for 10 or more.

Another Hawkins County man recently was charged with stealing $57,000 worth of pure tin — nearly three tons — from his employer, AGC Flat Glass near Surgoinsville and trying to recycle it, but authorities said the recycling center where he took the metal cooperated with authorities.

Thieves also have targeted bronze cemetery urns, brass plaques at churches and aluminum high school football field bleachers across the nation.

“You name it, if it’s got any perceived value it’s a target,” Savage said, adding that some plastic or concrete outdoor items with a fake patina resembling bronze or other metal have also been stolen.

Tennessee July 1 put into effect a law requiring a five-day waiting period for people to be paid when bringing in copper and non-can aluminum, and refrigeration or air conditioning condensers can no longer be sold in Tennessee except by licensed heating and cooling contractors.

However, another problem has been beer kegs made of stainless steel and sometimes stored in alleys or back parking lots of bars and restaurants. The kegs cost hundreds of dollars to replace but are well-marked as property of beer companies or distributors.

Savage said that aside from thieves trying to sell stolen metal to recycling dealers, the recycling centers themselves are the target of theft.

“The scrap industry has become a major target of theft,” Savage said. “About 60 percent of our members reported they’d have thefts in their own yards in the last six months. You can’t write anything more bizarre that we hear.”

Recent news reports from New Zealand recounted how some metal thieves were taking up railroad track to recycle.

In many parts of this country, he said foreclosed, abandoned and vacant homes are targets for thieves who take aluminum siding, copper wiring and metal from air conditioners and heat pumps.

Municipalities and utilities are not exempt, with manhole covers — including some in Kingsport — electrical wiring from power lines and even brass nuts on fire hydrants being stolen and sold for scrap.

He said the scrap association works with the American Public Power Association, which along with public utilities point out that substation and even residential power lines can carry high voltages that can kill.

Alleged manhole cover thieves were charged after selling the covers at a local recycler.

Savage said that thieves will take metal and cut it up to alter or hide its appearance and bury it in the middle bottom of loads.

And in the illegal drug trafficking business, Savage said police report that some drug dealers prefer or demand to be paid in recyclable copper.

On the bright side, he said some localities across the nation are reporting a positive outcome: old appliances and other metal left on roadsides or illegal dumps are starting to disappear as people cash them in for scrap.

“These prices are also driving a new benefit. All these things sitting out at the curb are disappearing,” Savage said.

No signs of wane in boom

The association has predicted a bright future for scrap metals. During an April 2008 convention, industry analysts predicted the outlook for domestic and international steel markets to be “stronger and stronger.” Meanwhile, concerns that energy shortages in China and South Africa may curtail aluminum production could drive aluminum up slightly. And copper, which has inventories at all-time lows, is expected to continue at or breaking price records.

“Every indication is these will continue for the foreseeable future,” Savage said.

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