What drew you from investment banking to the metals industry, and why are metals so important?
It was an unexpected opportunity that led me to metals. I joined Schnitzer Steel, now Radius Recycling, in 2005 as Chief Strategy Officer after spending most of my career at that point as an investment banker, and prior to that as a lawyer. As a banker and lawyer, I had been an advisor to companies in the U.S., Europe and Asia. This move allowed me to get involved earlier and directly in driving growth strategies and living with the results rather than only advising. The growth opportunities were significant because I joined just before the steel industry experienced one of its biggest bull markets, driven by demand from China and other emerging markets. Metals, particularly recycled metals, were essential in meeting the demand of electric arc furnaces in these emerging markets. The recycled metals industry in the U.S. experienced great growth opportunities as a result of this supply-demand dynamic.
Metals are fundamental to civilization. They are crucial to both traditional and modern technologies—everything from smartphones to electric vehicles (EVs). Steel, in particular, is the most recycled material in the world, more so than paper, plastic, and glass combined. Metal can be recycled infinitely without losing quality. This makes metal, especially recycled metal, critical to advancing sustainability and low-carbon technologies.
How is the current market situation for metals, and how has it affected your operations?
Right now, current market conditions are tight, similar to the 2015-2016 period when China’s overproduction led to global tariff impositions. However, today's environment is different. Unlike a decade ago, the structural demand for recycled metals is very strong across industries. Companies increasingly want to incorporate recycled materials into their production processes, whether it’s glass, paper, or metals, and that demand is growing.
The challenge we're seeing is a constraint in scrap generation due primarily to lower manufacturing activity and higher interest rates. Consumers are holding onto their cars and appliances longer because financing replacements is more expensive. Additionally, construction activity has slowed as people wait for interest rates to drop. Manufacturing in the U.S. has also been in recession for over a year. Once interest rates ease and consumer activity picks up, we expect scrap generation to increase, which should help us expand our margins and stabilize supply flows.
Why is metal recycling critical for the green transition, and how will easing economic conditions impact your industry?
Metal recycling plays a pivotal role in the green transition, particularly for technologies like EVs, solar, and wind power.
Metals are essential for all these technologies, and in fact, EVs require more metals than traditional gas-powered vehicles. One of the most significant advantages of metals is that they can be recycled infinitely, unlike other materials like paper, which degrade over time. This makes them invaluable as we move toward a more sustainable future.
As economic conditions improve and interest rates fall, the demand for recycled metals will only increase. This is because industries ranging from construction to renewable energy will need more raw materials—both from recycling and mining—to meet the demand for low-carbon technologies. In the long term, we anticipate that easing financial constraints will boost scrap generation, benefiting both our operations and the broader green transition.
Can recycling help address the sustainability challenges posed by electric vehicles (EVs)?
Yes, recycling is crucial in addressing the sustainability challenges of EVs. The production of EVs, particularly their batteries, is resource-intensive, requiring large quantities of critical metals like copper, aluminum, and nickel. These metals are needed not only for the batteries but also for the entire vehicle’s electronics. Recycling these metals will be essential to mitigate the environmental impact of EV production and to meet future demand.
There has been a significant underinvestment in mining for these critical metals, so recycled metals will play a key role in filling that gap. That said, we will still need both increased recycling and mining to meet the needs of the growing EV market and other green technologies. Public-private partnerships will be essential in creating the infrastructure needed to support this increased demand.
How does Radius Recycling address supply chain challenges, especially with so many variables affecting scrap generation?
Our business model is highly dependent on both micro- and macroeconomic factors. Microeconomics come into play when individual consumers make decisions about replacing cars or appliances, while macroeconomic factors, such as interest rates, influence construction activity and infrastructure projects. We’ve structured our operations around regional hub-and-spoke models, where scrap metal is collected, pre-processed, and then transported to nearby shredding facilities. This reduces the inefficiencies and high costs associated with transporting unprocessed metals over long distances.
We’re also constantly managing the fluctuations in scrap metal supply and demand. It’s a spot market. We typically sell processed recycled metal three to six weeks forward and buy scrap metal daily. . Operational efficiency is key in maintaining profitability, especially in tight margin environments like we’re seeing now.
What policy changes could improve the metal recycling industry’s contribution to the green transition?
Public-private partnerships are critical in this space, both for mining and recycling. We need clearer regulatory frameworks that support recycling and sustainable practices, especially as the regulatory environment continues to evolve. Consistency in regulation would help businesses like ours operate more efficiently and invest in long-term solutions.
Education is another key element. Communities need to understand that recycling is just as vital as other utilities like water or electricity. We need to educate the public on the importance of metal recycling for sustainability, as it prevents end-of-life products like cars and appliances from ending up in landfills. A collaborative effort between governments, businesses, and communities will accelerate the transition to low-carbon technologies and create a more sustainable future.
