Scholz International Trades Secondary Metals

By Nicole Zaro Stahl, Hacienda Network Staff Writer

Green Business Takes Scrap Steel, Aluminum, And Puts it Back to Use

The Scholz International Inc. office, which just relocated to 5976 W. Las Positas Boulevard, is the United States-based international trading arm of Scholz AG, a 160-year-old German firm with 7,500 employees at 500 locations around the globe. The parent, a provider of secondary raw material, is among the world's leaders in its field, collecting some 10.5 million metric tons of scrap steel and non-ferrous metal and then processing and returning it to the economic cycle every year.

Darrell Wong staffs the Hacienda trading office, matching buyers and sellers in transactions that wrap around the world, from Europe to Asia and all points in between.

Interestingly, the automotive industry is both a large consumer of and a source for the materials Wong trades. From the consumer perspective, auto manufacturers are the purchasers of the largest quantities of refined, or secondary, aluminum, used in new cars. This is in part prompted by the overall move from steel to lighter-weight metals, as in the production of engine castings.

On the supply side, when a car reaches the end of its life, it is crushed and transported to sprawling shredding operations, where components are separated. Three different material streams emerge: ferrous metals, non-ferrous metals, and plastics. Scholz focuses on the first two.

Recycling companies that generate several grades of non-ferrous metals are another source of traded material. Wong describes the scenario of an electrician who might find himself with five tons of copper wire to recycle. The material would be brought to one of the specialized plants to be processed and packaged according to the international standards of the metal recycling industry. Loaded into rail containers, the material is then shipped to far-off destinations.

Recycled metals used to remain inside the United States, where there was demand. "Now that we've moved from an industrial to a service-based economy, there is less and less industrial raw material," Wong notes. "Our auto industry is not producing the same sorts of products anymore."

As the economies of other countries mature, they step in to the market, becoming net exporters rather than importers. Much of their supply is harvested from old construction that is being dismantled to make way for new development. Wong points out that an active, vibrant economy is needed to continue to supply these types of metals. "The demand is cyclical," he notes. "We now depend a lot on Europe and Asia as the market for much of our raw material."

Scholz continues to keeps its edge in this highly competitive business by maintaining and expanding its network of reliable sources of quality material. "The amounts of scrap generating secondary material are declining with miniaturization in manufacturing. Think of how little metal there is in a smart phone - not very much. But there will always be a need for recycled metals," Wong says.

For more information, go to www.scholz-ag.de.

Photo: Darrell Wong staffs Scholz International's Hacienda office. (Photo: Vicki Salinas)

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