The say­ing that one man's waste is an­oth­er man's trea­sure cer­tain­ly ap­plies to the scrap met­al busi­ness. That dis­card­ed met­al gate, the man­gled steel from a torn down com­mer­cial build­ing and re­ject­ed air con­di­tion units are ma­jor com­po­nents of a scrap­yard. Trinida­di­ans came to know all too well how big the scrap met­al busi­ness is from bur­geon­ing scrap op­er­a­tions along the east­bound lanes of the Beetham High­way. Those op­er­a­tions were ground­ed late last month when the En­gi­neer­ing Bat­tal­ion of the De­fence Force re­moved scrap met­als from at least five yards at Beetham Es­tate, over re­ports of il­le­gal gun-mak­ing from scrap met­al ac­tiv­i­ty.

Chief of De­fence Staff Brigadier Ken­rick Ma­haraj said said the army had up to Au­gust 30 seized 32,280 kilo­grammes of scrap iron through­out T&T. Make no mis­take: the scrap met­al trade is big busi­ness. Let's start with some lo­cal fig­ures. Un­of­fi­cial fig­ures ob­tained from the Port of Port-of-Spain on Mon­day in­di­cat­ed that be­tween Ju­ly and Au­gust, 2011, lo­cal scrap met­al deal­ers ex­port­ed about 800 tonnes of scrap iron in 40-foot con­tain­ers, most­ly to In­dia, Chi­na, Tai­wan, In­done­sia and Brazil. In April, The Econ­o­mist said that its in­dex of met­als prices hit a cri­sis-time low at the be­gin­ning of 2009. It has since risen by 160 per cent, and is now ap­proach­ing its March 2008 peak. The prices of some of the com­modi­ties in the in­dex, which ex­cludes pre­cious met­als, have risen even faster. That of cop­per, for ex­am­ple, has risen by 236 per cent since it bot­tomed out, dri­ven large­ly by gal­lop­ing de­mand in Chi­na and In­dia.

Over­all, the scrap in­dus­try process­es more than 145,000,000 short tonnes (129,464,286 long tonnes; 131,541,787 tonnes) of re­cy­clable ma­te­r­i­al each year in­to raw ma­te­r­i­al feed­stock for in­dus­tri­al man­u­fac­tur­ing around the world. Wikipedia stat­ed that in 2007, the Unit­ed States ex­port­ed more than US$10 bil­lion worth of scrap steel. When the 2008 re­ces­sion hit the mar­ket, the scrap met­al price dropped from US$700/met­ric ton to US$250/met­ric ton, due to the fact that the re­ces­sion slowed down the econ­o­my and re­duced com­pa­nies' de­mand for raw ma­te­r­i­al. On the oth­er hand, the sup­ply of scrap met­al al­so de­creased be­cause peo­ple want to hold on­to big-tick­et item longer. As a re­sult, a short­age of iron and steel scrap has in­flat­ed its val­ue by 70 per cent in the past year.

At the same time, Chi­na and oth­er emerg­ing mar­ket have in­creased their de­mand for scrap, fur­ther rais­ing the price. Now the price of scrap met­al has re­bound­ed to about US$400/met­ric ton. Giv­en that Trinidad scrap met­al deal­ers are ex­port­ing in the range of 800 tonnes with­in a two-month pe­ri­od, that works out to US$320,000. That means scrap deal­ers are mak­ing US$1.920 mil­lion for the year or TT$1 mil­lion for the month. Ac­cord­ing to the Lon­don Met­al Ex­change, "Due to the fast growth in in­dus­tri­al­i­sa­tion, nat­ur­al re­sources are di­min­ish­ing. Scrap and re­cy­cling al­le­vi­ate a lot of the pres­sure. This is ev­i­dent in the fact that some ten mil­lion tonnes of scrap met­als are im­port­ed in­to Shang­hai an­nu­al­ly," says James Po, chief ex­ec­u­tive of Ter­ra Nos­tra, which has stakes in two Chi­nese cop­per and stain­less steel joint ven­tures.

"The Chi­nese gov­ern­ment is in favour of re­cy­cling; they un­der­stand the ben­e­fit of pre­serv­ing the en­vi­ron­ment and its nat­ur­al re­sources," adds Po. He be­lieves Chi­na's de­vel­op­ing au­to­mo­tive in­dus­try could help do­mes­tic scrap pro­cess­ing to ri­val or sur­pass that of the Unit­ed States, whose scrap in­dus­try is val­ued at US$250 bil­lion an­nu­al­ly. Shang­hai, Chi­na, will be host­ing the World Scrap Met­al Con­gress 2011 from No­vem­ber 1 to 4. Glob­al scrap met­al re­cy­clers, traders and in­dus­try stake­hold­ers are ex­pect­ed to link up with Chi­na and Asia's lead­ing met­als man­u­fac­tur­ers for the four-day event.

Re­gion­al scrap met­al trade

With­in the last three months, three Cari­com coun­tries-Ja­maica, The Ba­hamas and Guyana-have banned the scrap ex­port trade. Ja­maica's In­dus­try Min­is­ter Christo­pher Tufton an­nounced on Ju­ly 29 that cab­i­net had de­cid­ed to place an in­def­i­nite ban on the scrap ex­port trade as a re­sult of wide­spread theft across the is­land. The prac­tice, Tufton said, had cost the Ja­maican gov­ern­ment and the pri­vate sec­tor around US$11.7 mil­lion over the past three years. "Rail­way lines, wa­ter pipes, tele­phone ca­bles, bridges, road signs, gates, and even han­dles from ex­humed coffins were van­dalised by scrap met­al thieves to sell to rogue deal­ers for ex­port," Tufton said. He said said in­dus­tri­al scrap had been a ma­jor part of scrap met­al ex­ports with ma­jor com­pa­nies, such as: Caribbean Ca­ble, LIME, Ja­maica Pub­lic Ser­vice Com­pa­ny, Ja­maica Rail­way Cor­po­ra­tion, Caribbean Ce­ment Com­pa­ny, sug­ar fac­to­ries as well as baux­ite com­pa­nies, have suf­fered from van­dal­ism be­cause of the scrap met­al trade.

The next day, The Ba­hamas gov­ern­ment an­nounced it was plac­ing a 90-day ban on the ex­port of scrap met­al and that it would meet with the coun­try's le­git­i­mate scrap deal­ers to agree on a process of cer­ti­fi­ca­tion to per­mit and ac­com­mo­date the le­git­i­mate trade in scrap met­als. In the same state­ment, the au­thor­i­ties in Nas­sau list­ed a slew of con­se­quences that have re­sult­ed from met­al theft, par­tic­u­lar­ly cop­per theft, in­clud­ing the loss of broad­cast abil­i­ty in the south­ern Ba­hamas for up to a month, the loss of man­hole cov­ers by the coun­try's Wa­ter and Sew­er­age Com­mis­sion and oth­er pri­vate sec­tor com­plaints of loss of rev­enue on ac­count of cop­per theft. Like in the rest of the Caribbean, Guyana's telecom­mu­ni­ca­tions, elec­tric­i­ty and sew­er­age and wa­ter sec­tors have suf­fered con­sid­er­able loss­es at the hands of met­al thieves.

The Guyana Tele­phone and Tele­graph Com­pa­ny's in­su­lat­ed cop­per ca­ble has been a prime tar­get for thieves. In Ju­ly, the In­sti­tute of Scrap Re­cy­cling In­dus­tries (IS­RI) re­leased the out­comes of a study high­light­ing the sig­nif­i­cance of the eco­nom­ic im­pact of the scrap trade in the US. The analy­sis pro­vid­ed by the study in­dus­try in­di­cates that scrap re­cy­cling in the US ac­counts for more than 450,000 jobs, a rel­a­tive­ly small num­ber for the US. How­ev­er, the study said that apart from the fact that the scat­tered na­ture of the in­dus­try means that it pro­vides jobs for peo­ple across the coun­try, it al­so gen­er­ates around US$10.3 bil­lion in tax rev­enues for gov­ern­ments across the coun­try while mak­ing old things new again.

Re­search has shown that it has be­come one of the fastest grow­ing crimes in the US. Cop­per theft, for ex­am­ple, in­cludes gut­ters, flash­ings, down­spouts, wa­ter lines and elec­tri­cal wiring, all of which can be quick­ly stripped from aban­doned build­ings, in­dus­tri­al fa­cil­i­ties, com­mer­cial build­ings and con­struc­tion sites.

Air con­di­tion­ing units are par­tic­u­lar­ly at­trac­tive, and are of­ten tam­pered with or stolen for their cop­per coils and pipes for a huge prof­it. In the Unit­ed King­dom, ever ris­ing de­mand has dri­ven met­al thieves to tar­get cop­per sig­nals and pow­er ca­bles from the coun­try's rail­way net­work. This de­vel­op­ment has led to the au­thor­i­ties mount­ing a ma­jor po­lice op­er­a­tions us­ing he­li­copters and a spe­cial­ly adapt­ed "qui­et train," ther­mal imag­ing equip­ment, mo­tion de­tec­tors, po­lice dogs and mo­tor­cy­cles in a bid to nab the cul­prits.