Entrepreneurs meeting the demand for raw materials, not environmental virtue, drives the expansion of the recycling industry.
The first thing to do when you open up a small American scrapyard in the morning is unlock the safe and count the money. Back in the 1980s and 1990s, I was active as a teenager and young college graduate at my family’s scrapyard in Minneapolis. During the summer months, my younger sister Amy would join my father and my grandmother at the front desk, counting money. After college, I joined them, too. But for most years it was just the two of them, my father and grandmother, at 6:30 a.m., counting money into the register, the short paunchy man with the circle of hair atop his head counting the big bills, and the hundred-pound whip with the ice-blue eyes counting the small ones. Inevitably, though, the mother-son moment was interrupted by a ringing phone, and my father left his mother to finish the job on her own, while he took the call in his office.
There were two features to that office: a tacky wall clock made from a slice of a giant tree stump, purchased at the Minnesota State Fair, and a very large window that looked out upon the front desk and its cash register. From there, my father could not only watch his mother and whoever she might be paying but also see the television screens that pointed at his metal warehouse filled with aluminum, copper, brass, and lead, the scales where his scrap was bought and sold, and the metal yard where people dropped off everything from old cars, to mainframe computers from the 1970s, to giant drill presses from the 19th century.
As he slipped into his ratty office chair, he’d glance at the television cameras and then hit the line-one button on the phone. “Scrap Metal Processors. How can I help you?” It could be anything: aluminum cans, baseball bats, copper mesh from a chemistry laboratory at the University of Minnesota, whole automobiles, half of a refrigerator, silver-plated wire, a load of bathroom scales. Nothing was surprising, and everything had a price. “Tuning forks?” he’d ask the person on the other end of the line. “Maybe 15 cents a pound, but I’ll need to see them. Ask for Mickey when you get here.”
Right around that time, the cash register drawer slammed shut, ready for business, and my grandmother retreated into the glorified broom closet that she called her office. It was notable for a handful of features: the microwave oven, the refrigerator where she kept her stash of kosher hot dogs, and the odd array of brass figurines and loosely defined antiques that she had stolen from my father’s employees, who in turn had stolen them from the metal warehouse, hiding them in places that only she seemed to know. It was the one room in the office with the scrapyard smell known to scrap men (and grandmothers) all over the world: tangy like metal and thin like wire. I’ve smelled it on four continents, from small towns in Thailand to warehouses on the edge of Chicago. Each time, each breath, reminds me of my grandmother’s office, and the piles of metal just beyond it.
While she cooked the hot dogs, one for my father and one for herself (and one for me, if I could be bothered to show up so early), my father would leave his office, cross the hallway, open the metal warehouse door, turn on the lights, and raise the loading dock door. While the lights buzzed to icy life, he’d take a walk around, squinting in the darkness at his inventory.
If he had a moment, my father might run his fingers along the edge of a carton filled with brass shavings generated by a factory in St. Paul; then peek into the bottom of a carton filled with automobile radiators delivered by a suburban repair shop. Near the front, there were always boxes of brass “drippings”—literally, the brass that dripped on the floor of a factory during the casting process; aluminum clippings, the clean scraps that fell away when a machinist cut a widget from a piece of aluminum; boxes of copper tubing delivered by plumbers; boxes of water meters; boxes of fine, shiny copper wires, dropped off by defense manufacturers who’d completed their smart bomb orders; steel bins full of aluminum cans dropped off by neighbors; cartons full of old PCs dropped off by well-intentioned environmentalists; more cartons overflowing with brass bullet shell casings picked up from a local gun range favored by cops, gangbangers, and, in my experience, dentists; printer plates from the local printer responsible for our business cards and letterhead; and forks, knives, and spoons that my father had bid for, and won, from a major airline.
It was fairly typical, though small, as scrap warehouses go. Still, it was more than enough to pay for two private college educations (mine and my sister’s). To my young eyes, though, the most amazing thing about that warehouse wasn’t the scrap or the wealth, necessarily, but how quickly it all turned over. What that warehouse contained on Monday was never what it contained on Friday. The supply of scrap, and the demand for scrap, just never seemed to end.
In 2012, the 7,000 or so businesses that constitute the US scrap recycling industry were responsible for transforming 135 million metric tons of recyclable waste into raw materials that could be made into new stuff. That’s 135 million tons of iron ore, copper ore, nickel, paper, plastic, and glass that didn’t have to be dug out of the ground or cut out of a forest. It also exceeded, by an astounding 55 million tons, the volume of recycled municipal solid waste—that is, recyclables dumped into blue, green, and single-stream bins—generated by homes, government offices, and businesses during that same period.
What’s the difference between what a scrapyard recycles and what gets transported to facilities that deal with municipal solid waste? There’s some overlap, but in general the scrap business handles everything that’s not generated in the daily course of life in an office or home. Your old automobile ends up in a scrapyard; so do the metal grindings that fall away when an automobile manufacturer makes a new engine; the old electric meter on the back of your house ends up in a scrapyard (if the power company has the good sense to sell it); so do the power and telephone lines that connect to your house when they’re replaced; the cardboard packing boxes behind your local supermarket go to a paper scrapyard; so do the unsold newspapers in newspaper boxes.
Altogether, according to the Institute of Scrap Recycling Industries, the American scrap recycling industry, a set of companies that buy, pack, and process everything from metal to rubber, employed 138,000 people in 2012. But for all of the traceable businesses, with traceable employees, there are just as many untraceable ones: everything from the organized gangs of scrap thieves who roam Detroit to panhandlers who stick their hands into subway waste bins in search of a Coke can. It’s hard, I know, to think of a panhandler as part of any industry, but believe me, if the panhandler didn’t pull that bottle from the subway bin, nobody else would. He’s the bottom rung of the chain that moves up through your home recycling bin (he might steal the contents to sell rather than allow you to give them away) through my father, a processor and packer, to the companies that melt and transform scrap into new metal, paper, and plastic.
On weekday mornings at my father’s scrapyard, the customers who showed up before 7 a.m. were strongly represented by plumbers, electricians, and contractors with scrap that they’d acquired on recent jobs—usually plumbing, wire, siding, and window frames. They weren’t panhandlers, but they too were at the bottom rungs of the American recycling chain, collecting what a large company would never have bothered to collect because the volumes were just too small to be worth the trouble. Sometimes they brought a mere day’s worth of stuff, just enough to be cashed in for a couple cases of beer; and sometimes it was enough to pay for a first-class barbecue to go with that beer. Usually, though, the transaction fell somewhere in between those two extremes. A handyman, for example, might arrive with several white plastic buckets. One might be filled with copper tubes used for bathroom plumbing; another might have old brass plumbing fixtures and perhaps a few brass electrical connectors; and the last might be filled with a lightweight mix of wires and an electrical meter or two.
My father, a man with a talent for gabbing with the random characters who appear on scrapyard docks, would saunter over with a gambler’s confidence. “What’ve we got?” Then, without waiting for an answer, he’d pick up one of the buckets and place it on the kitchen-table-sized metal scale built into the concrete floor.
As the electrician looked on, my father would slide the scale balances down the beam, achieve a very quick weight, and write the weight on an invoice. Then it was time for the second bucket, and my father would reach for it, quite often before that customer could get around to asking what the day’s price on copper tubes was. “Ah, so what’re you paying for copper these days?” the electrician might ask as he watched the second bucket slide onto the scale.
This always took some reckoning. Scrap metal, despite its association with trash, is as much a commodity as bushels of corn, barrels of oil, and ingots of gold. Pre-Internet, my father would just go to the Wall Street Journal, look for the price of copper on the London Metal Exchange (LME) or the metal trading division of the New York Mercantile Exchange (COMEX), and offer that, minus a few cents to allow himself a profit. Then he’d sell it to a company that melts copper—perhaps the nearby foundry that cast copper into pots and pans.
A pound of wires isn’t quite so simple to buy. After all, a pound of wire isn’t a pound of metal; it’s a pound of metal (often more than one kind) and insulation. The insulation doesn’t weigh much, but you’ll have to pay somebody to remove it, and separating different kinds of metals costs even more. So the price paid for the wire needs to reflect those costs. The experienced scrap buyers—people like my father—know by experience, if not instinct, what the metal recovery will be from a certain kind of cable. Once a scrap buyer knows, or thinks he knows, the percentage of metal in a load of scrap, he then formulates a price by looking up the LME or COMEX price for, say, copper, and subtracting the cost of processing it.
Meanwhile, one of our delivery trucks might be arriving, loaded down with several washing-machine-sized boxes of copper shavings, generated during the overnight shift of a factory across town and picked up 20 minutes ago. That load would be worth more than all of the scrap collected by the plumbers and electricians who wandered in during the course of the week (and there would be tens more such loads from various factories over the course of the week). My father, meanwhile, would take the contractor’s ticket into the office, where more likely than not there was a hot dog and a kosher dill waiting on a paper plate next to a list of what he had in inventory, available to sell.
I can’t recall, precisely, when the first Chinese scrap buyer appeared at the front window of my father’s scrapyard. It was probably around 1994, right around the time that China had begun to deregulate key industries, and private entrepreneurs had decided that scrap metal was the business where they’d strike it rich. It was a good bet: China was at the front end of a drive to become one of the world’s great economies. It had labor and government support; the only thing it needed was raw materials. Digging mines was one way to obtain those raw materials; the other was to go to the United States, the place that many scrap traders call the Saudi Arabia of Scrap, the land where there’s more scrap than the people can handle on their own. It’s a funny nickname, Saudi Arabia of Scrap, but it’s not meant as a compliment. Rather, it’s an opportunity to exploit.
Those first Chinese traders are a blur to me. I just remember Chinese faces, broken English, and a willingness to buy everything in our inventory. “You have number-two wire?”
Sure, we have number-two wire. We also have customers for it. “How much do you want?”
“Can we see it?”
So we’d go out to the warehouse, and after a quick inspection, they’d ask to buy all of it. My father would offer a price—one significantly over what our customers in North America were paying—and they’d accept on the spot, no question.
In the mid-1990s, when the family scrap business started trading in earnest with China, the transactions were all but local. Chinese traders arrived at our door, paid cash, and left with the scrap. It was international trade, sure, but it was trade that we could do from home. In the midst of the 1990s boom, my father flew to China for a couple of quick trips, returning with photos of Chinese scrapyards filled with people and colorful piles of wire. But I always suspected those trips were nothing more than excuses to travel, if not enjoy some big nights out on the (Chinese scrap) town. The only lessons learned, so far as I could tell, were that the Chinese were becoming rich, and that they’d be hungry for scrap metal for a long, long time. They weren’t bad lessons—over the last two decades, giant fortunes in scrap metal have been made on those observations.
Ironically, though, my family didn’t manage to make one of those fortunes. The fact that the family business remained in business at all through that period is an accomplishment in its own right.
Credit belongs to my father. He’s a talent, a scrap man to the core, one of the great wheelers and dealers in an industry that sends them spinning off like tires down a hillside. But that was not enough to make him happy.
For much of the 1990s, in fact, while I was associated with the business, he was heavily intoxicated with booze and other substances. Back then I was a young, inexperienced honors graduate in philosophy, ambivalent about the idea of devoting myself to the scrap-metal industry. There were other things I wanted to do: write songs, write novels, get a PhD in evolutionary biology, and fall in love with depressive women. But when your family—and your family business—is in trouble, you do what you can. So I made one of the best choices of my life and went to work closely with my grandmother at the scrapyard. We did our best to keep cash from disappearing, and we labored to send my father to some of the finest chemical dependency treatment centers in the United States.
By my late 20s two things were becoming painfully obvious to me: first, my father was never going to embrace sobriety as my grandmother and I had hoped; and two, I had no future in a business where the top manager was extraordinarily talented but mostly absent.
It wasn’t exactly a lost cause—my father had demonstrated a talent for doing just enough to keep the company afloat—but it wasn’t a future. I needed a life, something beyond the scrapyard, even if “beyond” meant that I couldn’t have lunch with my grandmother several times a week.
In Minneapolis, I started out freelancing for magazines, quickly working myself into bigger and bigger assignments. Then, after a year or two, I was given the opportunity to do a freelance assignment on scrap in China, and I took it without hesitation.
What a terrible idea.
First, I didn’t know the language. Second, I’d never been to Asia. And third, the family business was still flailing in Minneapolis. But my grandmother, daughter of the scrap industry, encouraged me to go. “You have to live your life,” she told me. I don’t think she expected that I’d remain in China for a decade; I sure didn’t.
Globalization of waste is now a permanent feature of the world economy. So long as goods are made in one place, and consumed and thrown away in another, there will be companies that specialize in moving that waste to where it’s most valued as a raw material. More often than not, those companies belong to what my grandmother called the junk business.
First America Metal in Joliet, Illinois, looks like any other American machine shop. It’s located at the end of a cul-de-sac, surrounded by a green lawn, and accented by a tall flagpole that flies the American Stars and Stripes. Nothing about the place suggests it’s one of the most successful Chinese American–owned and –run scrapyards in the United States. In fact, most people don’t realize that scrap men with a deeper personal connection to China—and they’re almost all men—are quietly buying up and running scrapyards across the United States. The motivation isn’t hard to discern: they want to cut out the middleman—in this case the American scrapyard standing between China’s raw materials importers and the Americans who toss all that metal and paper into their recycling bins.
The Joliet scrapyard is owned by James Li, a naturalized American from Hangzhou, China, and he’s giving me a tour of his warehouse. We pause beside a box of defective home food processors. James picks up one that’s been broken apart and shows me the baseball-size motor inside it. The best way to get at the copper is by hand, using a pincer and perhaps a hammer and screwdriver. That’s not going to happen in the United States, so—predictably—that box is bound for one of James’s scrapyards in China, where it can be done cheaply.
James stops beside another box. “You know what this is?” he asks with a big smile.
I peer into it: there’s an oily mix of gray metal shavings of the kind left over when a factory grinds a block of metal into a rounded shape. “No. What are they?”
Titanium is an expensive, extremely strong, lightweight metal commonly used in aerospace—and in golf clubs. A few years ago, while traveling in Taiwan, I visited the island’s biggest titanium recycler. It was a memorable visit: I was shown sheets of titanium from which putter heads had been punched out like cookies from dough. The scrap at First America, however, looks more like oily confetti, and I suspect it’s not easy to find somebody who wants to buy it. James, however, has the potential to surprise. “Fireworks,” he tells me. “Titanium burns white. So you sell them to the fireworks makers. They make white fireworks with them.”
Maybe those shavings were ground off an airplane jet engine part destined for Boeing. Whatever the source, they’re now bound for a central Chinese fireworks factory. “How do you find those fireworks buyers?”
“I know where to look,” he answers. “The American scrap guys don’t know where to look.”
James leads me through the warehouse doorway and into muted offices that could belong to a small real estate company. “The face of the company is American,” James explains as we walk the single hallway. “But the office is Chinese.”
It is, indeed. The receptionist is a white American; but the small handful of offices behind the receptionist are occupied by Chinese, speaking Chinese.
According to James, First America Metal ships 3.2 million pounds of metal per year, making it one of the top five nonagricultural exporters of any product, by volume, from the American Midwest.
I’m aware that people outside the industry—especially in the environmental community—don’t view the globalization of the waste and recycling trade with warm feelings. They view it as outsourcing, dumping, an encouragement to pollute.
I understand their concerns: recyclers in developing countries don’t generally meet the standards that rich countries impose upon themselves. The question is, though: Are they able to conserve more, even if they operate dirtier? Is it better to reuse a computer chip in China, or shred it in a warehouse in North America?
In the end, those questions aren’t going to be answered by wealthy recyclers in the developed world. Rather, they’ll be answered by people in developing countries who need raw materials.
Recycling is better—I won’t write “good”—for the environment. But without economics—without supply and demand of raw materials—recycling is nothing more than a meaningless exercise in glorifying garbage. No doubt it’s better than throwing something into an incinerator, and worse than fixing something that can be refurbished. Placing a box or a can or a bottle in a recycling bin doesn’t mean you’ve recycled anything, and it doesn’t make you a better, greener person: it just means you’ve outsourced your problem. Sometimes that outsourcing is near home; and sometimes it’s overseas. But wherever it goes, the global market and demand for raw materials is the ultimate arbiter.
If—as seems inevitable—China becomes the world’s biggest generator of waste, why shouldn’t it then become the biggest recycler, too? If China remains the world’s biggest manufacturer, why shouldn’t it be the biggest harvester of raw materials from the cast-offs of other countries? Why shouldn’t it be the capital of Junkyard Planet?
Adapted from Junkyard Planet: Travels in the Billion-Dollar Trash Trade by Adam Minter. Copyright 2013 by Adam Minter. Published by Bloomsbury Press. Reprinted with permission.