Chaparral Steel, which has run a shredder at its Midlothian, Tex., mill since the mill opened in 1974, is served largely by long-distance truck haulers. You have to tend carefully to hundreds or thousands of unique suppliers, pricing each one's flow at a level that will keep the material coming and still let you run enough of a surplus to run your processing operation and take home a profit. The scrap business is very labor-intensive. The uniqueness of all the sources means you need many more people per ton of volume processed than a mill. The process is simply outside the grasp of the Taylorist mass-manufacturing techniques that have made modern steelmaking possible.
Scrap dealers deploy some of their top talent in the buying and selling operations.
Steel mills, by contrast, run their scrap operations as a sideline. Successful scrap companies function on many levels, only one of which is selling to steel mills. At Luria, our yard managers are like kings. This reduces the effectiveness of the scrap operation. Conversely, some scrap processors have entered the steel business successfully.