Fit to be shred.

With North America's shredder capacity growing in both number and output capabilities, will the sale of sheared and baled ferrous scrap decline dramatically?

That was the question considered by a trio of panelists at the Ferrous Spotlight session of the 2007 ISRI (Institute of Scrap Recycling Industries Inc.) Convention & Exhibition, which took place April 18-21 at the Ernest N. Morial Convention Center in New Orleans.

Metal Management's Matthew Parker, a director of ferrous trading based at the company's Newark, N.J., location, noted that net only are there more total shredders in the United States, but that as many as 39 of them are relatively new super-sized or mega-shredders with larger rotors and the ability to shred through as much as 60,000 tons per month of scrap.

Parker remarked that car bodies and white goods alone could not keep this added capacity busy, but that instead material that has traditionally been baled and sheared is being fed to these heavy-duty shredders. "The shift has already started ... away from cut grades," he declared.

Not all trends are unanimously in favor of shredding. Parker also said that Turkish steel mills, the largest ferrous scrap buyers off the East Coast, "do not particularly like shredded scrap" because of mill-specific technical reasons.

Nonetheless, Parker said, "We're going to produce more shredded scrap, and we are going to be able to sell it."

Gerdau Ameristeel Director of Technology Stuart Gray noted that electric arc furnace mills see advantages in melting predominantly shredded scrap because of the grade's density, which yields time and energy savings. In some cases, mills can charge their furnaces with just two charge buckets full of shred vs. having to make three trips with blended grades.

The disadvantages of using 100 percent shredded scrap, though, can include a higher feedstock cost and chemistry that can vary and be off-spec in the amounts of tramp elements such as copper and tin.

One of the world's largest-volume scrap buyers, John Harris of Mittal Steel Co., said North American shred is a good feedstock, especially if it is run through a bulk analyzer that can accurately portray the chemistry. "We want to know what the [chemistry] is; we have to know," said Harris.

Harris said that he foresees steel mills continuing to insist on such pre-analyzing, as well as seeing mills remain involved in producing or procuring scrap alternatives that can serve as "our control" on chemistry. Mittal Steel Co., he noted, is "doing extensive optimization ... in order to get the correct mix at the lowest cost."

Will there be enough scrap to keep all the shredders busy? Harris said, "It comes down to the market--it will determine whether your shredder runs one hour per day or 24 hours per day."

In response to an audience question, Harris also made a comment alluding to the notion that the number of shredders may be exceeding what the market can bear. He remarked that while there used to be a "gas station on every corner," a brutally efficient marketplace has led to a smaller number of larger stations.

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