High scrap prices are a mixed blessingby Mark Steil, Minnesota Public Radio
This is a great time to be in the auto salvage business. With scrap metal prices near all-time highs, old cars and trucks have never been worth more. But for one southern Minnesota salvage operator, it's a mixed blessing. Theft is a big problem.
St. James, Minn. — In his auto salvage yard in St. James, John Kuebler is working a forklift. He scoops up cars flattened into neat rectangles by a hydraulic crushing machine. He piles them onto the bed of a semi-trailer. The stacks of cars are so tidy even the truck driver is impressed.
"Hey, that's a good looking load though, John," says the driver.
Peering out from the cab, Kuebler counts the stacks. Normally he puts 18 cars on the trailer. This load is a little smaller because of some extras tucked in between the vehicles.
"Actually there's only 12 on there," says Kuebler. "There's a lot of farm machinery in between them. About 24 ton."
The car body is what's left after a careful disassembly process. There are all sorts of metals in an automobile or truck. Some are worth more than others. Nearby is a pile of tire rims.
"Of course we take them off the car before we crush it, because they're aluminum and they're worth more money than the car material," says Kuebler. "So they're ready to go anytime we want to load them."
The rims are worth $10 or more apiece, depending on that day's scrap market price. Catalytic converters bring $30 and up. They contain a precious metal, a type of platinum. Even the smallest cars are worth at least $150 in scrap metal. Big cars can be worth two or three times that value or more.
"There," Kuebler says, pointing. "The boys are stripping one."
As he watches his workers carefully remove a gas tank, Kuebler says the high metal prices bring headaches as well as profit. Theft is a constant worry. Kuebler owns two yards in St. James, roughly a half-mile apart. He says watching, protecting both yards proved impossible.
"We don't store too much over at that yard anymore," says Kuebler. "We used to store, we smelted aluminum and stored it over there. We lost 80,000 pounds one night, which kind of hurts us."
The aluminum was worth about $64,000. Kuebler believes it was a professional job. The thieves drove a truck into the yard and loaded every 40-pound ingot they could find. No one was caught in that case. The chief deputy in the local sheriff's office, Lee Bouma, says another aluminum theft from the yard was solved.
"It wasn't too long ago one of our deputies had found a vehicle nearby and in the back of the car was the ingots that he was, recycling aluminum, and melting them into ingots and that's what was found in the back of that car," says Bouma.
Bouma says scrap-metal theft seems to rise in lockstep with scrap metal prices. That seems to be true everywhere.
In Duluth, one landlord lost thousands of dollars in copper wiring. The nation's metal thieves have favorite targets: aluminum house siding, copper air conditioner coils, aluminum beer kegs, even bronze statues.
The scrap is recast into new products. John Kuebler says the scrap metal from his St. James business can go anywhere in the world. About half of all U.S. scrap metal exports go to one Asian nation.
"I think most of it will wind up in China," says Kuebler. "They're just upgrading their whole country and they're using a lot of this stuff."
The booming world market means continued good times for this salvage yard in southern Minnesota. The auto parts taken off the junkers are also valuable. In fact, they're still the most profitable part of the business. Walking through the yard, John Kuebler says he's always on the lookout for good metal.
"I can tell you aluminum, stainless, copper," says Kuebler. "I can tell 50 feet away I can tell you. But I've been in it for 40 years."
One of the biggest changes he's experienced is linked to high scrap prices. Kuebler says he sees more relatively young cars in his junk yard than in the past. Vehicles that are maybe 10 years old or so. It's a simple equation. The scrap metal and parts value of the vehicles is more attractive than paying for repairs.
- Morning Edition, 05/21/2007, 7:38 a.m.