Left to right: Keith Churchill, Vice President of Marketing and Business Development; David Gutierrez, Board Member; Janice Hall, Board Chairwoman; Robert Hall, Senior Board Member; and Robert Hall Junior, President/CEO; and Tina DiRenzo, local dignitary, Palmdale Chamber of Commerce. Not present in the photo Steven Hall, Board Member.
with random issues. Our 2018 wasn’t horrible, it was just flat.”
In 2014, scrap went from $500 to $40 a metric ton because the Chinese flooded the market with U.S. billet and tanked the market. Billet is created from scrap and/or iron ore. Billet and/or scrap are the feedstock of EOF consuming mills, thus, Billet price is a competitor of scrap price. Then China backed out of the U.S. scrap market almost altogether, pro- ducing enough internally to meet their own need. Since then, the major scrap buyers are Turkey, Tai- wan, India and the rest of Asia. These new market players demanded higher levels of quality product, but the U.S. suppliers were slow to fulfill quality de- mands. This has artificially driven down scrap profits that were once through the roof.
“In 2018, we got hit with the issue of downgraded materials, the 80/20 mix. Foreign steel mills began rejecting the California blend. We also experienced a hiccup in transportation, which we overcame,” he says, “but was caused by a legal scrap container ship- ment sent from South America to a Vietnamese port that was full of illegal cocaine. The result slowed the transport process, because every load received in certain ports is now inspected before it is released. Therefore, it made prices go down for everyone in that emerging market.”
“There is still a depression in the market now be- cause of issues with the mills. The electric arc furnace mills require carbon arc electrodes to melt the metals. In one month last year, the carbon arc electrodes went
AUTOMOTIVE RECYCLING • January-February 2019 61
from $1,700 a metric ton to $17,000 a metric ton,” says Churchill. “While these are unexpected, we can plan for cyclical occurrences, such as the Chinese New Year in February, where Asian countries take off almost the whole month. On our side, the end of year holidays slow down everyone’s business as well.” “Looking forward, 2019 is going to be an interest-