Scrap metal recyclers

Everything from vinyl records to spandex leggings has seen a resurgence in one form or another, and heavy metal is no different. No, not the music genre; we’re talking the recycling of steel, aluminum and tungsten by scrap metal recyclers such as Metalico (AMEX:MEA) and China-based Sutor Technology, Ltd. (Nasdaq:SUTR).

An estimated 90 million tons of scrap metal are recycled in the United States each year, at a value of more than $60 billion. While the United States has become increasingly reliant on other countries for manufactured goods, scrap metal has become a vibrant export market. Domestically, according to the Institute of Scrap Recycling Industries, two of every three pounds of steel produced in the United States is made from scrap.

Demand for ferrous (iron-based) scrap will likely continue to climb because the world’s steel producers are replacing virgin iron ore blast furnaces with electric arc furnace mini-mills that use scrap as their primary feedstock. Electric arc furnaces are more energy-efficient and environmentally friendly, and produce much less air and water pollution. Demand for non-ferrous (aluminum, copper, stainless steel, brass, nickel and other alloys) is also rising. Secondary smelters using non-ferrous scrap can produce metals at much lower costs than primary smelters using ore because of lower labor costs, energy consumption and environmental compliance expense.