U.S. automobile shredders are grappling with falling feedstock availability as COVID-19 containment measures reduce car accidents, trade-ins and auto auction inventories.
According to Argus Media, sparse availability of obsolete vehicles combined with slow flows of other forms of ferrous scrap have substantially reduced shredders’ feedstock throughout April, forcing many across the US to operate on limited and sporadic schedules.
Scrap volumes are not coming in fast enough to maintain normal operations, according to shredders surveyed by Argus. Some are building up inventories for days before operating shredding equipment and others have idled operations entirely.
“Inbound flow is poor with many yards not accepting peddler scrap,” one shredder in the southern U.S. said. “When demand picks up this will be an issue. [There is] not much inventory in the pipeline.”
Auto repair shops and towing operators have been classified as essential businesses and have so far been immune from state mandated closures. But as shelter-in-place orders extended through April, the vehicles on roads have dwindled, cutting the flow of cars and parts to the recycling industry.
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