Going after scrap deals

For decades the local scrap metal industry, a by-product of the energy sector, has gone unnoticed. That may soon change. According to the CSO Trade Bulletin for the period of January to April 2003, the scrap iron industry shows a resurgence. Trinidad and Tobago, it said, exported approximately $2.8m million in metal ore and scrap. Local scrap metal dealers, numbering somewhere around fifty persons, are quietly going about their business in an industry that is gradually gaining recognition. Their materials are basically sourced from large energy companies such as the National Gas Company (NGC), Damus, Welfab, United Engineering and Petrotrin, among others. Terrance Belton, Superintendent of Materials at NGC, said that the company has been selling scrap metals since 1995, following the development of a scrap metal policy. The company periodically holds scrap metal sales, advertising in daily newspapers for bids on the metal. “We hold these sales when we find that the company has a surplus of materials which are no longer required for company use. We then do a listing and try to monitise it,” he explained. “We will advertise to scrap dealers,” Belton continued, “who will then sell to ISPAT or export to foreign companies. Scrap is sold  where it is and the buyers are required to provide their own transportation. What they do with it is their choice.” However, local dealers are complaining that the prices they receive for the sale of metal both locally and internationally, are somewhat disheartening as they say they are not receiving their fair share.

Their main complaint is that Caribbean Ispat Limited, which is the major local market for these dealers, is not adhering to the international prices for scrap metal which presently stands at between US $138 to US $145 per tonne. Caribbean Ispat is willing to pay US $54 per tonne for scrap metal, although dealers have been asking for US $70. ISPAT, they claim, is holding them at ransom. Earlier this year, suppliers of scrap iron and steel decided to stop selling their metals to ISPAT as a result of these complaints. However, according to Secretary of the Scrap Metal Association of TT, Baldath Chabilal, meetings between the two parties in September resulted in a temporary resolution of the problem with the dealers agreeing to recommence selling to ISPAT. For the month of October, approximately 2600 tonnes of scrap metal was sold to ISPAT, he said, adding that the group was looking forward to a larger figure this month. He said, “we are asking ISPAT to deal with the local scrap dealers in a more efficient manner. We presently have to beg them to get things done in terms of price increases and the receipt of scrap.” No one at ISPAT could be reached for comment. Chabilal noted that apart from local buyer ISPAT, some dealers were involved in the export of the scrap materials to an Asian market but withheld the name of the country. Approximately 300 tonnes of metal is exported from TT per month, he said. Chabilal said that when he first entered the scrap metal market in 1993, he was of the view that it had no real future. This since changed. Scrap metal is now being generated on a large scale since a number of large companies have been closing down their refineries, which are eventually allocated as scrap. Caroni’s closure  has resulted in the closure of the Woodford Lodge and the Reform Factory, both of which have to be cut down for scrap, he said. “Also, Petrotrin has allocated 20,000 tonnes of scrap and we are also on stream with them to cut down some plants in Marabella,” he added. India and China have been named as two of the most prominent markets for scrap metals globally, with China having a steel output of 182 million tonnes and a non-ferrous output of over 100 million tonnes.

Ramnarine Heetai, CEO and Managing Director of Premier Metal Limited, located at the O’Meara Industrial Estate, Arima, is of the view that the performance of the scrap metal industry is highly dependent on the state of the local economy. Heightened production leads to heightened waste, he noted.  Heetai explained that before successful general elections in 2002, political instability had resulted in most large energy companies dropping their production of non-ferrous materials, which lead to a decline in the likes of  copper, brass and aluminum. The industry, he maintained, has been “up and down” since then. Raphael Culpepper of Caribbean Salvage Limited, Sea Lots, said that he had refrained from salvaging non-ferrous metals for export because this practice had become uneconomical, attracting low prices on the international market. Instead, his company now deals in the ferrous scrap metals which are salvaged from its spin-off company, Caribbean Steel Mills, which manufactures Steel and Roofing supplies throughout the Caribbean, Latin and South America. CSM also sells scrap materials to ISPAT and includes among its export markets Mexico, Columbia, Panama, Venezuela and the United States.