Scrap From Top To Bottom
Where It’s Been And Where It’s Going
The first Newell Shredder.
At the end of 2011 there were 300 shredders in the United States that processed 35,000,000 tons of scrap. Today, just four years later, 100 of those shredders are shut down as scrap prices are at an all-time low. The scrap industry has certainly had its ups and downs and while it’s currently at a down, history shows that anything can happen in the future.
Bobby Triesch is the Vice President of Operations for Newell Recycling, LLC, headquartered in Atlanta, Ga. He is also the grandson of founder Alton Newell, who started the business in 1937. Triesch recently spoke about the history of shredding at the 2015 ARA Convention & Expo in Charlotte, N.C. and his grandfather’s incredible contribution to the industry which changed how auto recyclers processed vehicles even today.
In 1960 an auto recycler had to scrap a car completely by hand. Seats and upholstery had to be removed before shearing or baling. There was dangerous open burning. At most, four to five cars could be scrapped a day.
Triesch’s grandfather Alton Newell started scrapping cars this way. According, to Triesch, Newell knew there had to be a better way. He invented the Newell Shredder, which was patented in 1969.
“He wasn’t an engineer, he grew up as a sharecropper and only went to school through the 10th grade,” said Triesch. “He was in the scrap business and he wanted to improve the process so he could do more.”
Newell’s process used hammer mills to pulverize the vehicles into fist-size nuggets which melt quicker, cleaner and safer. Prior to this the only other shredder out there was a Proler shredder, which shredded the entire car at once, including the engine, and wasn’t widely available to the masses. The Newell shredder allowed vehicles to be entered from the side so “teeth” could slowly shred it. At the time, it processed a car in about 10 minutes, plus it used less energy.
“My grandfather’s shredder just nibbled away at the vehicle as it was feeding it through,” Triesch explained.
In 1994 the American Society of Mechanical Engineer designated the Newell Shredder as the 111th National Historic Mechanical Engineering Landmark. The award is given to inventions and developments that change an industry. Today it only takes 15 seconds for a car to be shredded.
“Every shredder that’s made today looks like a Newell Shredder,” added Triesch.
Newell Recycling of Atlanta, Inc. was opened in 1976. Its current operations include the shredder, metal recovery plant, nonferrous warehouse, iron yard, aluminum can receiving center, and the Newell Transportation facility.
Triesch joined the company in 2004 as Vice President, Director of Ferrous Operations. Prior to that, he owned his own scrap businesses in San Antonio, Texas and Denver, Colo., which he sold in 1998 to Metal Management. After working as a regional president for that company, he started his own consulting business, Shredder Dynamics. Constant travel took its toll and Triesch decided to come home and work for the family business.
Triesch acknowledged that current scrap market has been difficult, as prices are at an all-time low. There are several factors which have caused this downturn, including the expense of government regulations, which affects operating costs without adding tangible value, the cost of hiring U.S. workers, which includes covering unemployment benefits, and overseas competition which has pushed supply above demand.
“I would say times are going to very tough for a while,” he said. “Part of what’s caused this problem is all of the steel mills in China.”
China produced more than 800 million tons of steel in 2015 and exported more than 100 million tons, which is the equivalent of the entire U.S. steel industry. Triesch explained that China can produce steel at a much lower cost than anyone else because its government manipulates its currency to counteract market changes to allow it to pay its employees whatever it wants.
“It’s very tough for the rest of the world to compete with this,” he added. “One-third of U.S. shredders are shut down. There will be a lot of consolidations and closings. It is going to take actual growth in multiple parts of the world to counteract this.”
Triesch said prices have reached as low as they are going to go simply because steel can’t be manufactured any cheaper than it is right now. But there are some things auto recyclers can do to counteract these low prices.
Newell Recycling has been receiving pricing requests for whole cars, versus hulls so auto recyclers can save time pulling motors, transmissions, wire harnesses, etc. A whole car contains 64 percent ferrous steel and 6 percent nonferrous compared with 53 percent ferrous and 2 percent nonferrous for a hull.
Auto recyclers can also look as scrapping cast iron, like in brake rotors and drums, transfer cases and clean motor blocks. If cast iron is segregated, it can bring $30 to $40 more a ton over shredder feedstock.
Removing plastic bumpers, fenders and glass will also increase value as consistency of supply quality is critical. And, of course, sell the cores out of vehicles. Newell Recycling buys five grades of irony aluminum - 20, 35, 50, 65 and 80 percent. Prices range from $.10 a pound to $.37 a pound.