March/April 1996
In the past four years, PMX Industries Inc. has melted and rolled its way into the U.S. brass mill industry, establishing itself as a sizable player in strip production and scrap consumption. Here’s an inside look at this youngest mill in the domestic market.
By Robert J. Garino
Robert J. Garino is director of commodities for ISRI.
It’s a far piece from Korea to the U.S. heartland.
But Poongsan Corp., a Seoul-based integrated brass strip producer, saw opportunity in the open expanses of Iowa—and in the U.S. brass industry. As a result, beginning in 1990, the firm set about building PMX Industries Inc., a greenfield brass strip mill, on a 380-acre parcel on the outskirts of Cedar Rapids.
This was a bold move. According to several brass mill officials, the brass strip industry was already in overcapacity at the time. What’s more, the PMX facility would be the first fully integrated brass mill commissioned in the United States in more than 50 years.
But Poongsan followed its business instincts, investing an estimated $250 million to construct what it views as the most modern semicontinuous cast strip mill in operation. The facility, which employs 500 non-union workers, opened in the summer of 1992, producing copper and copper alloy/brass strip to customer specifications inside its cavernous 800,000-square-foot operation.
While the Cedar Rapids facility is PMX’s showcase U.S. mill, it isn’t the firm’s only one. Also in 1992, the company took over managing a 500,000-square-foot continuous-cast specialty brass alloy and rerolling plant in Euclid, Ohio. This operation, which Poongsan had acquired in 1990, was originally owned by Chase Brass and later known as, first, North Coast Copper, then Great Lakes Metal. PMX says it plans to spend $20 million in the next two years to modernize the Euclid operation and increase its capacity.
Although PMX is hesitant to divulge production and capacity figures, industry analysts estimate the combined output of PMX’s two plants to be around 20 million pounds a month of finished rolled product.
A Growing Reliance on Scrap
Brass mills such as PMX rely on refined copper—such as spent anode and cathode—and copper/ brass scrap as raw material to make their products. Of the 4 million tons of refined and copper/brass scrap consumed in 1994 by all U.S. copper-consuming sectors—wire rod mills, brass mills, ingot makers, foundries, and others—nearly 1.4 million tons went to brass mills, with scrap accounting for 730,000 tons of that total, according to the Copper Development Association (New York City). In 1995, U.S. brass mill consumption of copper and brass scrap through October averaged 65,000 tons a month, or 5 percent lower than comparable 1994 numbers, reports the American Bureau of Metal Statistics (Howell, N.J.).
Brass mills primarily look for clean, dry No. 1 copper scrap, as well as several common alloys such as 70/30 and 80/20. Mills clearly prefer bare bright copper scrap and are less interested in, say, No. 2 or mixed brasses. This is because, as direct-melt operations, they usually can’t refine out the impurities contained in lower grades of scrap. Copper tubing, for example, is often an objectionable item due to its phosphorus content, which limits its use in mill production of alloys.
As for how much copper and brass scrap mills buy, the amount varies based on numerous factors, including the end products requested by the customer—which, in some cases, may preclude the use of scrap altogether—and the relative value of the scrap constituents. Primarily, however, scrap purchases are based on activity levels at the mill and the relative price difference between cathode and No. 1 scrap. In short, while scrap is the preferred feedstock, it may not always be the least expensive or most desirable raw material in terms of metal composition.
One interesting trend in the copper and brass scrap sector is that U.S. brass mills are using a higher percentage of scrap in their raw material mix than ever before. According to the Copper Development Association, brass mill consumption of scrap has increased from 32 percent of its total raw material use in 1961 to 40 percent in 1971, 48 percent in 1981, and more than 50 percent today.
PMX is no exception to this trend. While the firm used more cathode than scrap in its early years, its raw material mix now stands at 60 percent scrap and 40 percent cathode, says Joe Sara, metal procurement manager. And Chung Ryu, president, says the company, as it matures, will increase its reliance on scrap vis-à-vis cathode. This change, he states, is a “logical outgrowth” associated with PMX’s “growing pains” experienced throughout the past four years. “Our primary mission,” he remarks, “was to first make certain that this state-of-the-art facility could consistently produce quality sheet and strip”—a goal he feels the company has accomplished. “I believe that we’ve proved our production capabilities. Now we’re concentrating on our raw material purchases, especially our open market scrap buying.”
Building Supplier Relationships
Speaking of PMX’s scrap buying practices, it may be surprising to note that fewer than 10 scrap processors are regular shippers of prepared material to the Cedar Rapids plant. One explanation for this small number lies in the firm’s growing emphasis on quality assurance in all areas of its operations. “We have to be more selective today with our suppliers because our customers have become more demanding,” Ryu explains. PMX, in fact, is undergoing a pre-audit en route to achieving ISO 9000 certification, which some of its customers are requiring.
In trickle-down fashion, PMX is, in turn, more closely monitoring its scrap suppliers to help reduce or eliminate downgrades or discrepancies. The company, in fact, grades its scrap suppliers each month and issues a “report card” that specifies how they scored on such performance criteria as product quality, packaging, and completeness of paperwork. And, as if that weren’t enough, PMX is planning to develop a more formalized quality scrap audit program, which it hopes to have under way later this year.
In addition, Sara notes that PMX plans to visit its suppliers to reinforce the serious nature of ensuring quality raw material flows. “We firmly believe in the concept of ‘partnering’ with our scrap suppliers,” offers Ryu. “A close working relationship is one way to ensure a lasting relationship.”
From Scrap to Finished Product
If you were a piece of scrap in a brass strip mill such as the PMX facility, you could expect to be melted, poured, and flattened on the way to becoming a new copper/brass product.
In general, virgin and secondary raw materials begin their journey by being melted, then cast into intermediate shapes called slabs, or cakes. These slabs are, in turn, hot-rolled, then subjected to a series of cold-rolling, annealing, and pickling operations. The resultant flattened copper is rolled into coils for further processing. Some 90 percent of the copper and copper alloy strip, sheet, and plate made in the United States is produced by hot-rolling slabs, while the remaining 10 percent is produced by horizontal continuous-casting operations.
As a subset of the entire brass mill products industry, sheet, strip, and plate account for around 35 percent of all brass mill products annually shipped. Approximately 12 U.S. companies produce products similar to PMX’s, but only a handful have the technology to produce hot-rolled sheet and strip, including Ampco (Milwaukee), Brush Welman (Elmore, Ohio), Hussey Copper (Leetsdale, Pa.), NGK (Reading, Pa.), Olin Brass (Indianapolis and East Alton, Ill.), Outokumpu American Brass (Buffalo, N.Y.), and Revere Copper Products (Rome, N.Y.).
At PMX’s Cedar Rapids facility, virtually all inbound scrap is delivered by truck—and by appointment—to the 150,000-square-foot melt/cast shop. The material is visually inspected, weighed, and reweighed after unloading, then it is tagged, sampled, and held until an analysis can be verified. Only then is it ready for melting.
After being loaded into bins, prepared scrap is physically reduced at one of three melting stations that, together, house seven Channel & Corless electric furnaces situated next to one another. The first station, with three furnaces, produces brass products, while the second two-furnace station makes copper/nickel products and the third, also with two furnaces, serves as a “catchall,” catering to both copper and brass customers. (PMX is reportedly planning to install a fourth melting station.)
The molten metal from each furnace is poured into water-cooled vertical molds, with each heat producing three slabs, or cakes, that weigh around 10 tons each and stretch more that 18 feet long. To ensure quality, several samples are taken during the pouring. Dross generated from the melting operation is processed internally and remelted when possible. What can’t be recycled internally is sold as scrap.
From the melt shop, the cooled slabs are moved to the adjacent 75,000- square-foot hot-rolling mill and reheated for processing in a Steckel mill, which is capable of flattening a 6-to-8-inch-thick cake to a half inch at the initial stage of rolling. Intermediate cold-rolling operations are followed by finish rolling lines that bring the coils to the gauge and temper specified by the customer. The material may be rolled and annealed a number of times depending on the alloy being worked and the desired gauge reduction.
The resulting product is then sent to the company’s 400-foot-long horizontal annealing/pickling line, which is said to be one of the largest flotation flow furnaces in operation. PMX often also further processes the coils by slitting them before final packaging and shipping.
Field of Dreams
Thus far, PMX’s gamble in building a new brass mill seems to be paying off.
Despite the keen competition among the few remaining producers of strip, the company has quickly carved out a place in the market by using the most modern technology available, cutting costs while adding value to its products, establishing close relationships with its scrap suppliers, and giving personal attention to the needs of its customers. And the firm plans to continue to grow in the future based on these business fundamentals.
For PMX, Iowa has indeed been shaping up to be a field of dreams. •
Editor’s note: This is the first in an occasional series of articles profiling consumers of different types of scrap materials.
In the past four years, PMX Industries Inc. has melted and rolled its way into the U.S. brass mill industry, establishing itself as a sizable player in strip production and scrap consumption. Here’s an inside look at this youngest mill in the domestic market.