Early American immigrants' role in evolving the US-steel industry into the greenest in the world.

The US is the world’s largest exporter of scrap metal. The scrap metal recycling industry in the US recycles more than 130 million tons of scrap metal annually.

The David, J. Joseph Company (DJJ) is a large metal recycler in the US started by a German immigrant in 1863 in Cincinnati as a hide and wool trader. It was in 1885 the company, then owned by the brothers Joseph switched form hides and wool to scrap metal. Today DJJ operates multiple regional scrap recycling companies across the US with shredding capacity of ~5.8 million tons of ferrous scrap annually.

DJJ is owned by Nucor, North America’s largest recycler and the king of vertical integration in the steel-industry. Nucor makes steel predominantly (~92%) using scrap metals and scrap substitutes as the primary raw material. Scrap has the benefit of being easily processed by a more efficient smelting process in electric arc furnaces (“EAFs”). EAF's require scrap as the raw material, so scrap enabled the EAFs. Nucor and most mills in the US have invested in and continue to build EAF facilities across the US.

The chart image above is from Nucor’s 2022 sustainability report. It shows how superior steel-made-from-scrap and processed in EAFs is, compared with the carbon-intensity of mining and processing steel from traditional raw materials in blast furnaces. The greenhouse-gas emissions-profile for steel from scrap is inherently and considerably lower than iron ore, coke and coal. This is not the place to describe the exact differences between Scope1+2 v Scope1-3 emissions in the image, but scope 3 emissions refer to a products' supply chain carbon intensity - which for a mill refers to scrap collection, shredding and supply. While recycling scrap itself is way less carbon intensive, scrap collection and recycling itself may have a significant footprint with room improvement. But comparisons using any metrics have scrap and EAF significantly more sustainable.

The abundant availability of affordable local scrap is the key ingredient, a sine qua non for America’s leadership in sustainable green-steel.? While bigger US scrap players and mills have been acquiring metal recyclers consistently for decades, the US scrap market remains diffusely owned. No single company accounts for more than 5-6% of total market-share, with different reports having the current number 400 to 3000 scrap companies in the US. Behind each company is at least one immigrant and story, but generally these companies are made of many immigrants, whom while living local lives in their state and county chose to merge or sell, or pass it onto family and employees.

Publicly listed company Schnitzer Steel for example, rebranded as Radius this year, sold 1.8 million tons of ferrous scrap domestically and exported 2.8 million long tons in 2022. Schnitzer was started by Sam Schnitzer, a Russian immigrant in 1906 in Portland Oregon – a one-man scrap business called Alaska Junk yard.

Small scrap metal companies have even grown into huge vertically integrated mill operators like CMC Metals. Moses Feldman established his first scrap operation in Dallas in 1915. CMC has acquired itself into the position of a fully vertically integrated behemoth with $7 billion in net sales in 2022.

There is no doubt the US steel industry rests on the local scrap-metal industry in general, and certainly when it comes to decarbonizing the steel industry. I wonder how many of the thousands, maybe tens of thousands of immigrants who built the scrap metal industry, would be proud of helping the US achieve the greenest steel in the world.