Action baby, action.
From InfectiousGreed:
The following is a co-post, researched and written by Paul Kedrosky and Gregor Macdonald.
Schnitzer Steel of Portland, Oregon reported record revenues earlier this month. No surprise. The recycled-metal giant, which has roots going back over 100 years to the Alaska Junk Company, is uniquely positioned for the ongoing commodity supercycle. With iron ore, copper, and a selection of other metals now exceeding their 2008 price highs, the demand for salvaged metal is soaring. 2011, so far, pressages more of the same as the worst copper deficit since 2004 is set to unfold over the next two years. With production from mining under pressure, industry will have to turn increasingly to scrap.
The world of salvage and scrap is filled with memorable images. In Sebastaio Salgado’s classic series of photographs, human shipbreakers attack hulks on the warm beaches of Chittagong, Bangladesh. A load of chopped-up American junk from tools to kitchen blenders, resembling a dirt pile, heads out to sea from the port of Los Angeles. Upon arriving in Guangdong Province it will be transformed into appliances for export, starting the cycle all over again. There is even the legendary portrait of a central banker (Alan Greenspan), sitting in his bathtub and scanning the latest price reports for No. 1 Heavy Melt Steel Scrap.
Scrap is an essential part of industrial civilization. We buy stuff; we scrap stuff. As Robin Nagle, the New York City Department of Sanitation’s anthropologist-in-residence, recently said, “Every single thing you see is future trash. Everything.” The question, in other words, isn’t what is scrap – everything is – but what we do with it all, and what that says about us. Do we toss it into landfills? Do we recycle it? Do we send it others, or do we do it ourselves?
We can get part of the answer from the illegal drug market. Of all the parts of the economy touched by scrap, among the most surprisingly instructive is this one. Why? Because as any narcotics officer or addiction counselor will tell you, a primary source of capital for the drug addict is found by rummaging (or stealing) discarded metal. The word junkie actually goes back to the early years of the 20th century, when heroin addicts turned to scrap to finance their habits.
In John Seabrook’s absorbing 2008 New Yorker essay, American Scrap, he references the connection between metal-theft and drug dealing operations, noting that:
….hot spots of crystal meth abuse—Hawaii, the Southwest, San Diego, Oregon, and increasingly the rural Midwest and South—map to hot spots of metal theft.” One of the conditions of a meth high is extreme focus, which is just what you need to unravel lengths of copper wire from a tightly corded braid of other metals. Not only does meth give you the patience to do the job but the reward—money for more meth—is right there in the metal.Others have learned from the junkies’ focus. In 2008 during the last bull market in global metal and steel prices, the FBI produced a report titled: Copper Theft Threatens U.S. Critical Infrastructure. Don’t laugh....MORE
