Wednesday, April 21, 2010

Nashville recycler PSC Metals makes recovery

Many Nashville residents consider the scrap yard on the east bank of the Cumberland River an eyesore, but it's also increasingly a moneymaker again as the economy and scrap metal prices stage a comeback from recession.
Mike Bowling, who runs the site for PSC Metals recyclers, calls the pile of crushed cars and discarded soda cans near the river "a beautiful view."

PSC is coming off a bad year in 2009 as profits plummeted amid weak prices for scrap, poor demand for most recycled metals and a lack of commercial construction nationally.

In recent weeks the scrap business has picked up along with better demand for steel and at least a doubling of prices for some other types of metals such as copper and cast aluminum.

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PSC Metals posted a loss of $51 million before interest and taxes last year, compared with income before interest and taxes of $103 million in 2008.

Starting in the final three months of last year, though, PSC Metals saw its revenues take a turn for the better as volumes and prices of some of its recycled metals improved.

For instance the price of No. 2 cooper scrap that processors deliver to end-users is around $3.10 per pound today, up from about $1.26 a pound in December 2008, industry data show. For scrap cast aluminum, the price has risen to 75 cents a pound from less than half that.

Other scrap metal prices are $100 per ton above what they were selling for at year-end, industry data show.

"The steel industry uses iron ore, scrap metals and energy and all these inputs have increased substantially this year. That has helped pushed the price of finished steel up as well," said Bob Garino, director of commodities at the Institute for Scrap Metal Recycling Industries in Washington, D.C.

"This is a commodity business and commodity businesses are based on supply and demand," Bowling said.

Still, the total volume of scrap processed at PSC Metals' site near downtown remains about 40 percent below peak levels seen in 2008.

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