The containers full of recycled copper inside Manitoba Corp. are like gold to Brian Shine.
Shine is president of the Lancaster-based metal recycling company. Trucks deliver scrap metal from as far as hundreds of miles away to be processed at the Central Avenue facility. Customers, including Aurubis Corp.'s mill in North Buffalo, then use the recycled product in manufacturing.
Shine is the fourth generation of his family to run the business, which dates to 1916 as S. Shine and Son, so he is well versed in the industry.
His peers recognize that, too: Shine has begun a two-year term as chairman of the Institute of Scrap Recycling Industries, an international trade organization with about 1,300 member companies. Travel comes with the role, including trips to India, China and England planned in the next few months.
As ISRI's chairman, Shine takes a global perspective on the industry. China intends to stop importing scrap metal by 2020, which would cut off a big market for exporters of those products.
Manitoba Corp. is named after a Buffalo street where the plant was once located, and the company also has a facility in St. Louis, Mo. The company has about 50 employees at its Lancaster operation. Shine reflected on his new duties and how his company has managed to compete in scrap recycling for so long.
Q: How does a typical transaction work?
A: We buy in truckload quantities, which are 40,000 pounds. We're not a retail place, like a lot of scrap dealers are, so we don't have people coming in off the street. We buy from recyclers throughout North America: East Coast, West Coast, U.S., Canada. We bring it in, process it, try to add value, make sure it's clean product when it goes off to be melted.
The minute we buy a truckload of metal, 40,000 pounds, ideally we'd hang up the phone and call somebody and sell it and not have market exposure, and make your profit. But that almost never happens to us. So instead of selling the physical [load], we sell a futures contract. And that locks in the relationship between what I paid and the market at the time.
Q: Where does the scrap metal come from?
A: Most of what we buy is within a 500 to 600 mile radius. But we buy from Western Canada — they might rail it across Canada. We've got suppliers in Winnipeg and Vancouver even. … They're getting (scrap metal) from peddlers that come into their yard. It could also be from industrial accounts that are in their area, maybe stamping out parts or extra wire that they're scrapping. Or it could be from other, smaller dealers and they act as a wholesaler, and they'd sell it to us.
Q: Who uses your recycled product?
A: A good example is Aurubis, here in Buffalo, a huge consuming facility and really important part of Western New York, not just for our business but a great community supporter. … We'll also send our product [as far as] 500 to 600 miles, Canada and U.S. Ninety-eight percent of what we do stays in North America. It's ready to melt. So export markets really never valued it that way. They look for things they need to put labor into, like motors or low-grade copper scrap they can deploy labor to extract.
Q: What kind of metals does Manitoba take in?
A: We've been really focused on copper. We're unusual that way. Normally scrap dealers are very broad-based. They take anything that comes their way: steel, aluminum, copper, brass, whatever it is. We've really created a focus on copper.
Q: What's going on with China's decision about scrap metal?
A: They are trying, first of all, to improve the environment for the world. That's great, that needs to happen. Secondly, they're trying to create a self-sufficient recycling infrastructure within China to be able to support their domestic manufacturing needs.
Clean, scrap products, whether paper, plastic or metals, are still needed at this point, but we all, throughout the world, have to address and make sure that we're providing clean, high-quality products so that they can consume them.
Q: What other markets could these exporters turn to aside from China?
A: India is a potential one. India, to their credit, is trying not to repeat the mistakes China made, just opening the floodgates and letting anything come in. India is trying to make sure that they set up a strong, well-thought-out recycling program, so that it's highly functioning and works well.
They're trying to do it right. That's why they've invited me along with staff from ISRI to come and speak.