Harvey leaves shredder feedstock in its wake

The hurricane and tropical storm known as Harvey, which drenched parts of Texas and Louisiana with historic amounts of rain, could create more than 500,000 totaled vehicles and a significant number of junked appliances that will eventually make their way to auto shredding plants.

A Sept. 3, 2017, article by the Washington Post cites “auto industry experts [who] estimate that 500,000 to 1 million vehicles will have been damaged by water” after Hurricane Harvey, “with most being total losses.”

The newspaper’s reporters also write that insurance firm State Farm “has already received almost 20,000 claims” on flood damaged vehicles from the Houston area.

Figures for large appliances—washers, dryers, refrigerators and air conditioners—also are not yet available, but based on aerial photographs of southeast Texas and southwest Louisiana, the count is likely to be high.

Cincinnati-based David J. Joseph Co. (DJJ) operates four scrap facilities under the Texas Port Recycling name in the Houston area. Ann Dewert, director of corporate services with DJJ, says, “Thankfully, all of our staff have been accounted for and are safe. In addition, our facilities were spared significant damage.“

She continues, “All four of our Houston area recycling facilities (Houston Port on Manchester Street, Pinemont, Conroe and Victoria) remain open to serve our valuable customers and the people of Southeast Texas. Our thoughts and prayers will continue to be with the people of Texas and Louisiana.”

Hurricane Katrina in late August 2005, which left New Orleans and other parts of southern Louisiana under water, resulted in an influx of scrap that kept recyclers busy into 2006. A manager at Louisiana-based Southern Scrap Recycling, in a December 2005 Recycling Today article, said authorities had estimated more than 1 million appliances and 150,000 vehicles “in New Orleans alone” were scrapped because of that natural disaster.

A commodities market summary by Milan, Italy-based T-Commodity says the Platt’s news organization

foresees price support in the steel sheet market in the wake of Hurricane Harvey.

Also, according to Platt’s SBB (Steel Business Briefing), if 500,000 vehicles end up at auto shredding plants, that would be double the number that were shredded after Superstorm Sandy in the eastern United States in 2012.

Adds Gianclaudio Torlizzi of T-Commodity, “Depending on the replacement demand for those vehicles, the overall impact longer term could be supportive for steel prices despite the increased scrap supply, as demand is usually the bigger driver of prices. Near-term scrap prices are expected to firm, given the difficulty of moving scrap in the affected regions.”