This reduces the effectiveness of the scrap operation. Conversely, some scrap processors have entered the steel business successfully. Schnitzer Steel Corp., the Portland-based scrap processor, runs a profitable minimill operation that is entirely supplied by its own scrap yards. Last year Omnisource Corp., the Fort Wayne, Ind.-based scrap broker and processor, took an equity position in Steel Dynamics Inc., the new Butler, Ind., minimill. To hear scrap processors talk, the only thing preventing more of them from entering the steel business is their lack of liquidity.
Today there are probably four or five others in a position to do it.
Partnerships The line between brokers and mills has always been a shifting one. The David J. Joseph Co. has run Nucor's scrap operation almost exclusively for as long as Nucor has been in steel. Luria Bros. has exclusive relationships with Lukens and other mills. Tube City's exclusive relationship with Bethlehem's Steelton, Pa., mill has become closer this year than ever. Bob Garvey's own Birmingham Steel has launched a joint venture with Simsmetal America to run a processing operation to supply Birmingham's Seattle mill.