A couple of emails from readers wondering when I’ll next blog about scrap. Soon, I promise. In the meantime, how about a photo of a scrap motor processing venture up Jiangsu-way? I’m not going to name the company here, but I will say that they are likely China’s largest importer of ferrous scrap, and – in search of a means to diversify – they have just entered the non-ferrous scrap markets with a vengeance. Not only are they scaling up to become one of China’s major low-grade copper importers, but they are actually sending head-hunters down to Zhejiang to pick-off that province’s rich store of experienced motor processors by offering salaries in excess of RMB 2500/month (US$350). That’s more than many (most?) Chinese school teachers make out of university. When I first started following this industry five years ago, a Chinese motor processor was lucky to earn RMB 800/month.
How long can this last? Is copper demand in China strong enough to justify those kinds of salaries? More pressing: At US$2+/pound, can’t somebody in the US justify keeping those motors in the US for processing? As it happens, I’ve heard from several sources that a group of Albanian refugees (congrats on Kosovo) are setting up a motor processing operation in the Midwest. I don’t know the scale, but I suppose, if they’re successful, someone else in the US might take a crack at that US$2 copper.