22 / 24
Page 22
Recyclers News Press
Low Scrap Prices Adversely Impacting All
Segments of the Auto Recycling Industry
The continued slump in the scrap metals market is
adversely impacting many segments of the automotive
recycling industry, including automotive self-service
and hybrid recyclers. Not surprisingly, the low scrap
metal prices create a domino effect in the professional
automotive recycling industry, affecting prices and buy-
ing practices throughout the automotive parts supply
chain. For example, buyers of salvage vehicles might
hold onto inventory for longer than usual to wait for an
increase in scrap metal prices. In addition, the core
market demand could decrease, resulting in a shrink-
ing business product line. Indeed, today's professional
automotive recycler must be aware of these market
changes to be able to make smart buying choices and
sustainable inventory practices.
Large ARA corporate mem-
ber companies such as
Schnitzer Steel Industries
Inc. are not immune to the
impact of falling scrap pric-
es, with Schnitzer recently
announcing that after sus-
taining a $196 million loss in
the company's second quar-
ter of fiscal year 2015, it has
merged its metal recycling business with its auto parts
business as part of a cost reduction program. The inte-
gration of its auto parts and metal recycling divisions
"intended to further optimize the efficiencies in [its] op-
erating platform, enable additional synergies to be cap-
tured through our supply chain and global sales chan-
nel, and more effectively leverage [its] share services
platform". The company said that the quarter saw the
lowest prices for recycled metals since 2008 and that
ferrous metal prices likewise dropped approximately 30
percent from the first quarter. According to the Scrap
Pricing News April Price Update, steel pricing is ex-
pected to stay flat for the month with no indications as
to when prices might turn around. Global steel markets
have suffered from overproduction, a strong U.S. dollar
and weaker demand. Non-ferrous metals prices have
likewise remained flat but fears exist that the prices
could still continue a further downward slide.
GRP Members to Partner with CAR Program
As of July 1, 2015, ARA is requiring that all
Green Re-
cycled Parts (GRP)
members must be Certified Au-
tomotive Recycler (CAR) program members and vice
versa. There is no cost to join GRP. Membership in an
ARA-approved state CAR program makes you eligible
to be in the GRP program. Once approved by either a
state or the national program, you will have access to
the GRP brand to supplement efforts to market your
business and increase sales. ARA recently updated
the CAR application which is now an easy to use
points system. If you are currently a CAR member and
not yet signed up for GRP benefits, please go to the
GRP website and join today. ARA staff are on hand to
help you through both processes. In 2012, ARA
launched Green Recycled Parts
as a solution to members’ mar-
keting needs and to help pro-
vide a brand identity for the pro-
fessional automotive recycling
community. Through Green Re-
cycled Parts, ARA is building a
global brand synergy that offers
consumers quality recycled
OEM parts at reasonable costs.
Certified Automotive Recycler (CAR) Program member
facilities support this brand identity by adhering to es-
tablished best management practices, promoting con-
tinuous improvement and complying with all regulatory
environmental, quality and business requirements.
Miami-Based Auto Recycling Conglomerate
Files for IPO
The Miami, Florida-based Fenix Parts, established in
2014 to combine eight professional automotive recy-
cling companies and create a network in key regional
markets in the US and Canada, has filed with the U. S.
Securities and Exchange Commission (SEC) to raise
$100 million in an
initial public offering
(IPO). The stock
will list on the Nasdaq Global Market under the symbol
FENX.
ARA Updates
Industry news from the national association