Philip's aggressive acquisition campaign, which tied up big chunks of its treasure in such notable prizes as Intermetco and Luria Bros., had as much to do with its current trouble as any damage done by the employees now accused of trading adventurously in copper. But liquidity isn't a problem for only the big players. Dealers and processors in general have been operating on much thinner cash cushions than their forbearers did, they say. Today, many independent brokers and dealers say they have the money to operate for only four to six weeks if their sources of credit go dry. The company has slowed down its acquisition campaign, although it purchased the rest of PerlCo L.L.C. in mid-November.
Computers have a lot to do with the current state of the scrap business.
Ambitious, statistically driven management techniques make it possible for mill buyers to predict ever more exactly what they will want in what grade. The need to lay in a percentage of heavy melt over one's expected needs, therefore, is far less pressing today than it was when a buyer's job was to walk around his intake yard with a clipboard. The result is that the scrap processor who owns inventory that isn't mostly already sold almost certainly is going to be the one to soak up the cost at the end of the year. Return to New Steel home page.