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Canned Goods

Posted on July 2nd, 2006 at 4:17 PM
Canned Goods

Skyrocketing scrap metal prices have made fund raising a little easier for the junior high youth group at Erie’s Our Lady of Peace.

Prices for the aluminum cans the group collects are at record highs and they added roughly $20 to the check the group got for its most recent collection.

“The last two times we had a collection, aluminum was like 15 cents or 20 cents more a pound,”said Tim Hoffman, head of the group’s adult committee. “That helps.”

But the youth group is hardly the only one paying attention to higher scrap metal prices.

After all, Hoffman often has to wait in line on Saturday mornings when he takes his cans to Lincoln Metal Processing Inc. on Selinger Avenue.

“We are averaging well over 100 peddlers a day here in Erie,” said Jeremy Lincoln, vice president of Lincoln Metal Processing, which was paying 68 cents for a pound of scrap aluminum on Thursday. “It takes 33 cans to make a pound … and we buy at least 5,000 pounds of cans a day.”

“Peddlers” include anyone who shows up with metal for sale.

The sellers range from church youth groups to manufacturers. There are also homeowners and “scrappers” who follow the refuse collection routes.

And, sometimes, they are thieves trying to get rid of stolen metal.

“There is no such thing as a typical customer,” said Barry Rider, executive vice president of Liberty Iron and Metal on East Avenue. “We get municipalities, individuals, groups, businesses.”

And, lately, what has brought more and more of those peddlers to the scrap yard doors are prices that Erie-based metal broker Edward Verdecchia said remain at unprecedented levels.

Prices for some metals, such as aluminum and copper, have backed off a bit over the past month, but Verdecchia said they are still in the stratosphere.

“Over the past five years, iron has doubled in price, copper has quadrupled in price, and aluminum has doubled and tripled in price,” Verdecchia said.

Prices can bounce up or down daily, sometimes hourly, said Rider, who on Thursday was paying “in the 70-cent (a pound) range” for aluminum cans.

Even with the recent decline in prices over the past few weeks, dealers are still paying in the $1.90- to $2-a-pound range for copper.

Steel comes in many grades, but Lincoln said it probably averages out at $100 a ton -enough to prompt farmers and manufacturers to pack up and sell old equipment that might have been sitting around for years.

Verdecchia said a robust domestic and worldwide economy is the basic reason for the skyward movement of scrap prices. Factors like the emergence of China and India and the weak U.S. dollar fire up metal prices, just as they do oil prices, he said.

Verdecchia said the market is in a boom cycle for scrap dealers.

Lincoln Metal recently hired about 10 new employees and now has a combined work force of about 45 at its Erie site and Meadville Metal operations. The company also renovated its offices, lobby and peddler receiving area in Erie.

Liberty is running full bore with its maximum 100-person work force.

“We have been very busy,”Rider said.

The scrap dealers said the boom is welcomed in a cyclical industry where business droughts can last for years.

But dealers and brokers said the volatility of the markets makes it hard to keep prices firm and anticipate what will come next.

“Before my crystal ball worked pretty good, but not any more,” Verdecchia said. “Now it’s broken.”

JIM CARROLL can be reached at (814) 724-1716, 870-1727 or by e-mail.