Metals Recycling

As one of the nation's largest recyclers of scrap metal, Schnitzer's Metals Recycling Business collects, trades, brokers, processes and recycles metal, both ferrous (containing iron) and nonferrous (not containing iron). Our continuous capital investments in advanced technologies and our strategically located facilities help make us a highly efficient, low cost scrap metal processor.

We purchase raw material from the Western U.S. and Canada, Hawaii, Alaska, the New England states, the Southeast and Puerto Rico. Our proximity to large industrial suppliers and major railroad routes, deep water ports and major highways provides us with a competitive advantage to deliver processed scrap supplies wherever demand is greatest.

Raw scrap metal is purchased from industrial manufacturers, railroads, auto salvage facilities, metal dealers and individuals. The metal typically comes from obsolete machinery and equipment such as autos, railroad cars, railroad tracks, home appliances and demolition metal from buildings and other obsolete structures. As part of the company's vertical integration, we also purchase crushed auto bodies from our Auto Parts Business facilities where geographically feasible. Purchased materials arrive at our metals recycling facilities daily by ship, barge, rail, truck, car and even individuals on foot.

Once the raw scrap metal arrives at one of our yards, it is processed by sorting, shearing, shredding, torching and baling. This results in metal pieces of a size, density and purity specified by steel mills and foundries for melting and use in the production of new steel and other metal products. Smaller, more homogeneous pieces of processed metal have more value because they are more easily utilized by steel mills and foundries.

One of the most efficient ways to process metal is to use shredding systems, such as those installed at nine of our facilities. A shredder can reduce auto bodies, home appliances and other metal into fist-sized pieces in seconds. Shredded material is then carried by conveyor under magnetized drums which attract the ferrous materials and separate them from the nonferrous materials. The remaining nonferrous metal is further sorted and graded before being sold. Recycled metals are sold to domestic and foreign customers, including our Steel Manufacturing Business which purchases ferrous metals to produce new steel. We ship to customers via bulk cargo ships, barges, railroad cars and trucks. We achieve cost efficiencies from our export facilities at seven deep water ports and locations close to major railroads and highways. Our recycling facilities have an aggregate processing capability of more than 5 million tons of ferrous metal and 600 million pounds of nonferrous metal annually.

We invest continually in our facilities in order to maximize cost efficiencies, to deliver the highest quality products and to ensure regulatory and environmental compliance. One major initiative has been the installation of mega-shredders at our export processing facilities in Oakland, California; Everett, Massachusetts; Portland, Oregon and Tacoma, Washington. This equipment has helped us lower conversion costs by increasing throughput while improving energy and labor efficiencies. In addition to the extra capacity, mega-shredders shred more efficiently and process a greater range of materials, including larger and thicker materials which result in an end product which is denser. In conjunction with new state-of-the-art nonferrous metals recovery systems, mega-shredders provide a more pure (refined) and preferable form of ferrous metal which can be used more efficiently by steel mills. We have also rolled out new induction sorting systems which have helped further improve the recoverability of stainless steel and other valuable nonferrous metal. Improvements have also been made to our port facilities to improve loading/unloading capacity and efficiency.

Our strategy is focused on enhancing the inherent synergies within our three integrated business units while continuing to grow in core regions where we have a significant market presence and competitively advantageous port access. Our Auto Parts Business is a key supplier to our Metals Recycling Business and we opportunistically look to enhance operating synergies between the two businesses. Our Metals Recycling Business is also involved in several joint ventures that provide us additional opportunities for recycling metals and other materials. These businesses provide metals recycling facilities; removal and disposition of surplus railroad assets (such as railroad track); and demolition, dismantling and environmental remediation services.