Upstate Shredding-Weitsman Recycling is partnering with Canadian recycler Combined Metal Industries (CMI) to transition its New Castle, Pennsylvania, ferrous shredding facility to focus on aluminum.
Upgrades will include modifications to the existing ferrous-focused shredder, as well as installation of a new pre-shredder and sorting and polishing equipment, company owner Adam Weitsman told Argus.
Compass Metal Trading, the US trading division of CMI, will manage all commercial activities. This includes the purchase of all aluminum feedstock and the sales of all segregated aluminum shredded scrap grades into the aluminum sheet and extrusion markets.
"With our knowledge of shredding on the production end and CMI's expertise on the commercial non-ferrous scrap buying and selling end, it was the perfect opportunity for us both," Weitsman said.
The companies expect the new facility to be fully operational within the next six months.
Owego, New York-based Upstate Shredding's decision to transition the New Castle shredder to aluminum scrap will help it focus on a more profitable market, given increased competition from regional mill-owned shredders for ferrous feedstock. The acquisition of shredders by US steel mills to strengthen their raw material supply chains has led to intense pricing battles for shredder feed in some regions.
Mill-owned shredders have different cost and pricing structures than privately-owned operations because they can absorb higher feedstock costs, market participants said.
"Competing against steel mill-owned shredders in that region was very challenging because their pricing structure would not allow any margins," Weitsman said.
