ARCA Recycling Looks to Share Costs with Retailers and Manufacturers : US Appliance Recycling Firm Shifts Business Model in Face of Falling Scrap Prices
ARCA Recycling, a wholly owned subsidiary of Appliance Recycling Centers of America, Inc. (NASDAQ: ARCI), is adapting to the sharp decline in scrap metal prices by negotiating contracts with utilities and manufacturers that reflect the industry’s changing landscape.
The company explained that scrap steel prices have fallen 22% over the past year and are down 57% over the last two. Nonferrous metals have also suffered similar price declines.
According to ARCA, compounding the situation, U.S. steel imports have dramatically increased over the past year – a situation mirrored in the European Union which recently launched new probes into Chinese steel imports, claiming unfair competition.
The firm also noted that the American Iron and Steel Institute called on the U.S. Government to “address injurious import surges.”
“We’ve become less reliant on scrap metal revenue by adjusting our utility contracts and raising our pricing over the past six months,” explained Edward R. (Jack) Cameron, ARCA Recycling’s president. “We’ve been very busy with new utility contracts.”
“Utilities, manufacturers, retailers and consumers are all realizing the landscape has changed dramatically, evidenced by many private and public recycling programs struggling financially,” added Cameron.
“Sharing costs ensures the long-term viability of a recycling market that delivers important environmental benefits,” he concluded.
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