“You can drop a car in my shredder and in 30 seconds, you’ve got a pile of shredded-up metal with pieces no bigger than your fist,” observes Jerry Bailey from his office overlooking Rose Metal Processing in the Heights, the scrap metal yard he owns and operates.
He’s not exaggerating. The cars, refrigerators, stoves and metal pieces loaded into the
It is one step of many in an industry seeing an uptick because of Hurricane Harvey. After the
“It’s just the tip of the iceberg,” said Bailey. “This slog or cleanup, it’s going to take months.”
Scrap metal is a billion-dollar industry worldwide. About a third of the steel used to make cars comes from recycled scrap metal, and the metals Bailey recycles at his plant are shipped to countries like China, Japan,
Bailey has a tanned face and flowery gray hair and speaks in a low Texas drawl. Rose Metal Processing has one of the few automobile shredders in the city, so it runs as long as he has space in his yard. He receives scrap like construction debris and appliances, but he gets stranger items as well. Last year the FBI used his plant to recycle 7,000 pounds of AK-47s, he said.
But after a storm hits, there’s a surge in the amount of
“We don’t like to look at storms as being good for business, but after a storm, the reconstruction efforts do tend to lead to increased demand for material,” said Joe Pickard, a chief economist with the Institute of Scrap Recycling Industries.
The bulk of that scrap will come from flooded cars. As many as 500,000 vehicles flooded in Houston because of Harvey, according to Cox Automotive. Many of those cars are transferred by insurance companies to salvage vehicle auctions throughout the state and eventually bought by scrap metal recyclers and peddlers, the industry name for the people who locate and retrieve the scrap. Depending on the damage, cars can sell for less than $100 and up to tens of thousands if it is a particularly expensive model. At Rose Processing, Bailey said he has already signed a deal with Ford to recycle 400 to 600 brand-new F-150 pickup trucks that were flooded because of Harvey.
The rest of the scrap being collected will come as homeowners and commercial properties clear debris. Fridges, stoves, water heaters — or white goods, as appliances are called in the industry — will go to scrap metal yards across Houston. At South Post Oak Recycling Center, chief operations officer Brandi Harleaux has seen a small increase in goods since the storm. The center doesn’t accept cars (Harleaux said the regulation surrounding car recycling makes it more trouble than it's worth), so the uptick has come in
“People have scrap, [but] it’s low-value scrap,” she said. “I’m not necessarily like, ‘Bring it all in,’ because it’s bulkier stuff that’s worth very little, but it’s still a commodity.”
Calvin Edwards, who runs his own private trash-hauling business, stopped by Rose Processing on Monday to drop off a load he collected from a contractor clearing out a house. At this point he’s already collected debris from a flooded-out apartment complex in south Houston, but metal pickup isn’t his priority yet. With his truck and small trailer, he can carry about 5,000 pounds, but on Monday he brought in about 700 pounds. At the current rate of 4.75 cents per pound, he netted only $30. Edwards typically takes jobs from contractors, but he said he might pass on any scrap metal pickups until the prices go up. He said he knows of peddlers who will stockpile their metal until prices increase. But with the amount of trash out there, he’ll be receiving additional calls for the next few years.
“It’s going to happen, someone’s going to call me,” Edwards said. “I’ve been doing this for 16, 17 years. I’m going to get the call.”
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The per-tonnage price of scrap metal has dipped since Harvey, which can be expected because of the surge in supply, according to Pickard, the economist, and Bailey has already dropped his rate by about $30 because of pressure from steel mills, from $280 per ton to $250 per ton. But the general trend after storms observed in the past is that the need for
“There are some people who actually told one of my customers at the steel mill last week, ‘Well, all that hurricane scrap is already gone,’” Bailey said. “No, it’s just started.”