The scrap recycling business is so bad people aren’t even stealing copper to sell anymore, according to one local dealer.

The industry hit record highs and record lows in the last year and remains on the downside, according to industry experts and local recyclers.

“Sale pricing has fallen off 50 percent to 75 percent, depending on the item,” said Glenn Yaffe, president of Yaffe Companies, Inc.

Businesses, such as scrap recyclers and pawnbrokers, who usually see an upturn in business during slow economic times, say that’s not happening in the present economic slowdown. Both types of business owners have to be more selective about buying because there are fewer companies buying from them.

“Last year was certainly one of the most tumultuous the scrap recycling industry has experienced in modern history,” George Adams, chairman of the Institute of Scrap Recycling Industries, Inc., wrote its more than 1,600 members in late January.

The downturn started in August and snowballed from there, said Tim Wheeler of Wheeler Scrap Metals.

Bankruptcies are occurring almost daily in the industry but not in this area, Yaffe and Wheeler both say. Both are top officials in longtime Muskogee scrap metal businesses.

“We’ll see some more go out of business — but I don’t think we’ll see it in our region. There’s only a couple of us here,” Wheeler said.

Yaffe began in Fort Smith, Ark., in 1907. Wheeler Metal has been in business in Muskogee since 1968.

“We’ve not laid anybody off, not due to a slowdown or the economic situation,” Wheeler said last week.

Yaffe has had no layoffs, but said Feb. 9 was the effective day for a cutback in work hours from 40 hours to 35 hours per week.

During visits to both metal recycling businesses last week — no trucks were in line to sell scrap metal.

“I’ve never seen this type of scenario,” Wheeler said. And there’s no consumers — they’ve totally quit buying or cut back on spending.”

The price of iron, aluminum and copper is so low few people bother to bring it in, he said.

“It’s terrible,” Yaffe said. “We can’t sell it, therefore, the buying prices are so low it’s not worth people bringing in.

“Even the easy scrap has quit flowing, prices are so low. Copper’s down as well — haven’t even heard of any copper thefts of late.”

One area businessman, Gary Welch of Welch’s Tires in Wagoner, has been in the business for years.

He used to sell old tires at the two big recyclers in Muskogee. But when prices dropped 50 percent or more, he said he started doing some stockpiling of his own on his 10 acres.

The price of scrap commodities went sky high about two years ago but hit bottom about four months ago, Welch said.



Scrap trickling

in to recyclers

A reason for the downturn on old autos coming in may be because the Muskogee beautification probably kept the flow going of the old autos when prices were higher, Wheeler said.

“There’s a few obsolete farm implements coming in — very few autos,” he said. “Most of the area was cleaned up and gone through thoroughly when prices were good and everybody was picking it up.”

The domestic steel industry is operating mills below 50 percent capacity, some in the low 40s, Yaffe said.

“It fell off in September and October. It’s been depressed since,” he said about business.

Both Wheeler and Yaffe blame general economic conditions — the downturn in the automotive and housing markets — but said all commodity markets are affected.

As part of the domino effect, the appliance market dived.

Over the last several years, customers at Wheeler were within a 250-mile radius, Wheeler said.

“Now, we’re more spread out — up to thousands of miles,” Wheeler said.



No plans

to close up shop

“The consumer is out of credit. Until credit eases, I don’t see any of that changing,” Yaffe said.

He said originally, he was shooting for the situation to ease by the end of the second quarter.

“I’m not that optimistic now,” he said.

Will they stay in business? Both Wheeler and Yaffe say yes.

“We can go (forward) — but it won’t be pleasant,” Yaffe said.

Yaffe employees are sticking with their jobs, despite the cut in hours. Most are longtime employees.

“They’re scared — we’re all scared,” Yaffe said.

At 49, Yaffe has been around the business all his life.

“We’ll batten down the hatches and cut expenses,” he said.

But Yaffe will still be buying scrap metal.

“We’ll stockpile it,” Yaffe said.

The company is still getting some cars and operates three shredders.

The bulk of Yaffe business is industrial business, the product of manufacturing, Yaffe said.

When companies press punch something, Yaffe gets the skeleton, he said. Some ranchers and farmers and people cleaning up still come in.

Pop cans Yaffe used to pay 60 cents a pound for now bring 20 cents to 25 cents a pound.

“People won’t pick them up for that — some will,” he said.

There hasn’t been enough buying and selling of scrap metal to keep workers busy, so they’ve been doing housekeeping and maintenance chores, Yaffe said.

“We’re about over that, so we reduced hours,” he said.

The industry is a highly capitalized one, so it costs a lot to be in the business, Yaffe said.

“Some of our customers are closing up, moving or consolidating.

“The aluminum sector seems particularly hard hit,” he said. “Die casting business ... tied to the automotive business, and we all know what’s going on in the automotive sector.”

Wheeler said the company continues to buy scrap metal, and there are opportunities to turn a profit — “not the same profits there were a year ago. But I don’t anticipate not buying scrap metal on our site.

“We’re still a full-family operation, and barring any crazy situations will continue to be that way.”

At this point, he said there are a lot of ideas on how to pick up the overall economy, but “I don’t believe anybody has a good answer.”

Yaffe also contends there is light at the end of the tunnel.

“As soon as our politicians quit politicking, they’ll start sending money out of Washington,” Yaffe said. “I hope the stimulus plan will help — if they can get the crap out of it.”

Reach Donna Hales at 918-684-2923 or Click Here to Send Email