As Steel Prices Soar, Slim Pickings for Home Mechanics

By Beacon Staff

For the do-it-yourself mechanic, these are sparse times.

Wrecking yards, which many home mechanics rely on for parts, have been crushing cars in the past year at an unprecedented rate, often without removing all of the parts, which get crushed too. The reason: Steel prices are at record highs.

The price of steel has nearly doubled in the last year and it makes more financial sense for wrecking yard operators to crush and cash in now than meticulously remove the parts, itemize them and operate a day-to-day retail business.

Corey Pilsch, who has been racing at Raceway Park for 20 years and frequently works on his car, said for the first time he’s been unable to find parts locally. He said he recently called around to wrecking yards in Kalispell to find a few parts and ended up having to drive to Ronan to get what he needed.

“It’s just tougher to get stuff,” Pilsch said. “All those cars that used to be over in the wrecking yard, they’re just not there anymore.”

Kevin Smith of R & J Wrecking in Kalispell said parts are the heart of any wrecking yard’s business, but they aren’t guaranteed money. Especially with older, more obscure parts, it’s just a matter of waiting to see if anyone comes in and needs them. On the other hand, money from crushed cars in a skyrocketing steel market is a sure thing.

“It puts money in your pocket right away,” Smith said. “It’s just quick money.”

R & J is no different than most other local auto salvage yards and has been crushing cars at a rapid rate. However, its motivation is two-fold: profit and space, because the neighboring city airport is expanding, so R & J is minimizing its property. The result is that the company crushed roughly 2,500 cars last year and an additional 1,000 this year, Smith said, leaving only a couple of hundred left.

“Every wrecking yard has to crush because you run out of room,” Smith said. “So you gamble and you decide which (cars) you want to save, which ones might make money later on, and which ones you want to crush.”

That gamble is becoming more vital as more cars leave the yard. Operators have to be careful with which cars they choose to save. Jim Swartzenberger, owner of Tri-City Auto Wrecking, said he usually crushes about 25 percent of his total supply and keeps the rest around for parts. This year, he said, he’s crushing about 75 percent.

“If they’re late model I’ll part them out, if they’re not, they go right to the crusher,” he said. “You make more crushing them than by letting them sit around eight or 10 months.”

Steel is the most widely recycled material in the nation. The Environmental Protection Agency estimates that recycling steel uses 74 percent less energy than making new steel from raw iron ore. Not to mention, it’s cheaper. Cars are a major resource for steel production, with a typical passenger car consisting of roughly 65 percent steel and iron, according to the Steel Recycling Institute (SRI).

Wrecking yards, if they have their own crusher, compress cars and then sell them to recyclers. Otherwise they sell them to a place with a crusher. Recyclers then shred the cars and send them off to steel mills where the ferrous material – meaning it’s derived from the iron ore and can be used in steel production – is melted down and used to create steel. SRI reports that all steel is made up of at least 25 percent recycled material.

Much of the rest of a car is recyclable as well, including wheels, catalytic converters and transmission casings, which provide metals like aluminum and platinum. High prices have encouraged recycling for these metals as well, but nothing like steel, said Jeff Millhollin, vice president of operations for Pacific Steel and Recycling.

The amount of ferrous material coming into Pacific’s yards has doubled in the past year, Millhollin said. Nonferrous metals like copper and aluminum have been popular as well, but Millhollin said “nowhere near the tune of double.”

Further fueling the steel craze, Millhollin said, is technology that now allows recycling companies like Pacific to shred and process machinery or appliances with tin bodies at a reasonable cost. Old combine harvesters and other farm equipment, along with household appliances like dishwashers and refrigerators, have substantial amounts of tin that was previously too difficult to extract and process before new technological advances in shredding capabilities, Millhollin said.

“The biggest difference is that the old junk that has been laying out across Montana forever is moving into our yards,” Millhollin said. “Some of that stuff’s been sitting out there for 30 to 40 years. It’s not being thrown in a coulee or landfill now; it’s being brought in and recycled.”

A big problem with the high metal prices, Millhollin said, is thievery. Thieves are targeting salvage yards and areas like construction sites where metal is abundant. Pacific’s yards have been hit hard recently.

“That’s something we battle every single day,” Millhollin said.

Pacific deals with a wide variety of recyclables, though steel is a cornerstone. Cars are always good for steel production, but Bret Ewer, nonferrous and fiber manager for Pacific, said it’s becoming increasingly difficult for wrecking yards to prosper off of parts, instead of recycling. Cars today, with their computerized systems and other advances, aren’t geared toward the home mechanic.

“There aren’t as many backyard mechanics and certainly if you open the hood of your car, unless you’re a better mechanic than I am, it’s hard to know what to do,” Ewer said.

With fewer parts available, backyard mechanics are often leaving wrecking yards empty-handed. Smith of R & J said it’s never been rare for somebody to be unable to find a certain part, but it’s occurring more frequently now.

“It happens everyday,” Smith said.