September/October 2008
Bouncing back from the Asian financial crisis, Thailand's healthy manufacturing sector and growing middle class are fueling a demand for metals. The country's steel mills are competitive in the containerized ferrous scrap market, but the nonferrous sector lags in comparison.
By Adam Minter
On a humid weekday morning in central Thailand, I stride onto a catwalk four stories above the scrap bays at G J Steel's sprawling mill in Rayong Province, roughly two hours' drive southeast of Bangkok. Far below, a minivan-sized magnet slowly lowers from an overhead crane onto a pile of shredded scrap. As the scrap attaches to the magnet, it sends up a cloud of orange dust that wafts across other bays filled with still-shiny bundles and rusty heavy melt. The magnet rises, and Sathporn Varongchayakui, the mill's senior manager for steelmaking operations, leans over and suggests, in the interest of my health, that I cover my face with the company-issued dust mask. As I do so, he points at the piles of shredded scrap in the distance, on the other side of the truck road that runs alongside the scrap bays. "We have 120,000 ton on the ground right now," he says. "Is that a lot?"
I assure him that it is. The distant magnet rises and moves toward me and toward the conveyor belt that carries the scrap into Thailand's largest electric arc furnace.
Varongchayakui points past the brown piles of shred to Thailand's only fully operational shredder, on a horizon defined by a lush, green mountainside. "Over there is Suntech [Metals]," he says. "We buy a few thousand ton every month from them. Their scrap is like imported quality," he adds, "not like this." He nods at the magnetload of scrap that draws closer. Just as the magnet is about to drop its load, he grabs my arm and rescues me from being engulfed in dust. When the dust clears, he nods me forward to watch as the metal moves along the conveyor that disappears into a system currently producing 100,000 mt of hot-rolled coil a month for Thailand's thriving automobile and appliance manufacturers.
In 2007, the United States exported 761,586 mt of scrap steel to Thailand, nearly double the 383,489 mt it sent in 2006. That volume is expected to grow—and already is growing—in 2008. Yet Thailand is not like other Asian economies hungry for exports to fuel their rapid economic development. More than a dozen years ago, Thailand was already a growing and dynamic export destination for bulk shippers. Were it not for the financial crisis that tore through Asia starting in 1997, today Thailand might be one of the world's foremost ferrous scrap importers. That decade-long credit crunch led to the decline of Thailand's steel industry, and China (and, more recently, Vietnam) took the country's place as the favored destination for U.S. ferrous scrap. While the world was looking elsewhere, however, Thailand slowly consolidated and rebuilt its steel industry into a competitive and dynamic player ready to take advantage of the new global trade in containerized ferrous scrap.
Despite its greater level of economic development, Thailand still faces many of the problems that afflict less-developed countries, including vast corruption, a shaky financial system, and a lack of transparency that makes statistical data difficult to gather and even harder to present. In contrast with its regulation in other Asian nations, scrap moves freely in and out of Thailand, yet it's nearly impossible to find information on volumes or destinations for anything other than ferrous. Nonferrous scrap, essential to Thailand's manufacturers, is just as likely to be exported to nations with lower-cost labor as it is to be processed domestically, leaving Thailand with a relatively undeveloped nonferrous processing sector that's a sharp contrast to the sophistication of its ferrous side.
Growing Interest in Imported Steel Scrap
Varongchayakui leads me down a metal stairway and into the dark and dusty maze of walkways and platforms that surround a massive 330-mt Consteel furnace. I feel it before I see it: Outside, the temperature has already reached 95 degrees F; inside, it's at least 15 degrees warmer. I'm relieved when he veers to the left and opens a door to an air-conditioned control room. There, protected by steel grating and extra-thick glass, five engineers in T-shirts monitor Asia's largest EAF via a newly installed Danieli automation system. "Here's the recipe," Varongchayakui tells me, nodding at one of the room's computer screens. As the muffled sounds of cranes and crashing scrap rumble around me, I read the recipe for charge No. 22466: "HMS, 20 mt; crop ends, 5 mt; busheling, 30 mt; No. 1 bundles, 20 mt; pig iron, 65 mt; imported shred, 60 mt." Suddenly, the room begins to shake as the melt begins.
Planned in 1995 and commissioned in 1998, G J's massive furnace only began operating at full capacity last fall, after years of financial troubles, changes of ownership, and uncertainty. That timing coincided with a global race for scrap steel the company's managers had never imagined when they designed the plant. In 2007, Thailand imported more than 1.7 million mt of ferrous scrap; had global prices been lower, mills surely would have imported more to supplement and sweeten the poor-quality domestic ferrous scrap that feeds this furnace.
Varongchayakui leads me out of the control room and up a staircase that looks out upon a vast, sunlit loading area. The walls are slightly buckled from the heat of the two 180-mt ladles of molten steel the cranes carry to the adjacent rolling mill. "Over there will be our expansion project," he tells me, nodding at a distant wall. When the expansion is complete in late 2009, the plant—already Thailand's largest—will grow from an annual capacity of 1.2 million mt to a planned 3.4 million mt. "So we will need the [imported] scrap very badly," he says. G J Steel is not the only Thai plant feeling the pressure. Within a 10-km radius of here is another 5 million to 6 million mt of steel production, and all of it is scrap-based.
Siam's Sole Shredder
Outside the warehouse, a white fence separates G J's shredded piles from darker piles of HMS and the unmistakable profile of Suntech's shredder. Next to it, on the other side of a paved road, is an eddy-current system that, on the day that I visit, is working through a dirty load of mixed, rusted metals, including sheet metal, that has been shredded, and will be reshredded, into a clean premium product. Gary Dowling, Suntech's CEO, strides between the two machines and points to the stormwater runoff system that surrounds the 3,000-hp shredder. He proudly points out the berms that surround the device and the drainage channels that lead into a holding and evaporation pond at the back of the yard.
The environmental controls look familiar to a U.S. visitor. "This is how we do it back home," says Randy Goodman, director of international marketing & logistics for OmniSource Southeast (Spartanburg, S.C.), as he surveys the site approvingly. "Right, right," Dowling answers in his Australian accent. "Actually, this is the most advanced recycling facility in Thailand. To be honest, you don't need anything this advanced here. So we've been figuring out ways to make it work profitably."
By all accounts, Dowling has more than succeeded in working profitably during his two years at the helm. The ownership consortium that founded the adjacent steel mill built this facility in 1995 to process low-quality Thai scrap into suitable melt for its EAF. Only now, 10 years later, is it beginning to fulfill its potential. Like so much else related to Thailand's metal industries, Suntech was badly damaged by the Asian financial crisis, and, as a result, two years ago it came under the management of Smorgon Steel (which last year merged with OneSteel, both in Sydney, Australia). By law, Suntech—like all Thai joint ventures—remains majority Thai-owned, but OneSteel owns 20 percent of it and recruited Dowling, who spent 25 years with Sims Group (Sydney, Australia), to run the operation.
From the beginning, Dowling insisted on raising the facility's already-high standards. Workers now earn an average of US$5 a day. Dowling points to the line of employee motor scooters as evidence of their relatively high standard of living. Next door, G J is perhaps Thailand's highest-paying mill, where workers earn an average of US$10,000 a year. "So there's the middle class driving all of this steel consumption," Dowling tells me.
He leads us onto the shredder, which has been shut down for maintenance. As we peek into the rotor box, he tells us that, despite the founders' original goals, he typically shreds only imported material. "Most of the domestic material, the production scrap, the imported HMS, can go right to the mill," he says. "Why add the cost of shredding it?" He points toward the edge of the Suntech property, where trucks are unloading loads of clean HMS that workers are torching. "That's not the type of material we normally get here," he says, "though we'd like more."
Dowling explains that 30 to 40 dealers dominate the domestic Thai scrap markets. They, in turn, buy from networks of small scrap peddlers. Thai scrap tends to be too expensive for Suntech's cost structure, he says, but his company does have an edge over some other domestic buyers. "Well, we pay on time," he chuckles. "Credit is tight here, so prompt payment can sometimes get you a discount on material."
Despite that slight advantage, Suntech's success depends upon the import market and the company's ability to procure material that needs preprocessing. The facility has the capacity to preprocess 500 mt a day. We pass a pile of imported bales laced with foam, for example, that need to be separated before the material is shredded. On the whole, Dowling notes, such material provides him with a US$20 margin, while the Thai material might give him little more than a US$10 margin. "Car bundles," he says authoritatively. "Those are easy. I'd like more of those."
Suntech currently imports 4,000 mt of scrap each month—from where, Dowling declines to say. His goal, he says, is to raise that volume to 10,000 mt to 15,000 mt a month while also expanding the company's reach into the domestic market. Of the many variables that will determine whether he can meet that goal, the most important—scrap demand—is not a concern. "I can count our customers on two hands," he says. "This isn't hard to figure out."
We walk through the center of the yard, turn left, and pass a soccer pitch Dowling constructed for his employees. Across from it, in an open warehouse, a small group of laborers is using wrenches and hammers to separate nonferrous from plumbing scrap. It's labor-intensive work. The Thai workforce, though more expensive than Vietnam's or China's, is still cheap enough to justify a domestic nonferrous industry, though not the large-scale processing of imported nonferrous that you see in China. "We don't do much processing of that kind of material here," Dowling says. "It's with the smaller players."
Capitalizing on Containers
A large photo of G J Steel's Rayong EAF dominates the glass-walled conference room in the company's 18th-floor corporate headquarters on a side street in downtown Bangkok. Seated beneath the photo are Goodman and Justin Chu, the Hong Kong-based founder and general manager of Lee Cheung Steel and Metals. Goodman is on his first marketing trip to Thailand, in search of new buyers for his company's increasingly valuable ferrous scrap stream. Chu, a broker who often works with OmniSource Southeast, has brought him to meet G J's scrap purchasers and founder.
In his yellow flower-print shirt and canvas shorts, Chu hardly looks like one of the top suppliers of ferrous scrap to Thailand, not to mention one of the largest ferrous brokers in Asia. But Chu doesn't need to dress to impress at G J Steel: The company buys roughly 15,000 mt of high-quality HMS and shred from him each month. Most of the material comes from the U.S. West Coast—in containers. "Justin is one of the real innovators in containerized scrap," Goodman says.
Chu speaks quietly but confidently about his role in bringing containerized ferrous to Thailand. "I opened this market to anyone who wants to sell and doesn't have direct contacts and the chance to ship bulk," he says.
His history is one of Asia's great untold scrap stories. In the early 1980s, as an employee of a South African steel mill, Chu began marketing finished steel products throughout Asia and Russia. Later in the decade, he founded his own steel marketing company, and in 1988 he was making his first trades into Thailand, developing relationships that he still calls upon. It was not until 2000 that he shifted into scrap, however.
"I saw the opportunity that all of the empty containers on the U.S. West Coast presented for scrap importers," he explains. "So, because I had contacts in finished steel, I was able to sell to markets where others were not selling containers." Today Chu supplies ferrous scrap to eight Asian markets, with Thailand taking 30,000 mt to 40,000 mt a month, or roughly 20 percent to 25 percent of his total supply. (Taiwan takes 50 percent, with Korea, Vietnam, and Indonesia taking most of the rest.)
"Sometimes it's not the price of the material," he says, explaining his process for determining the destination of the large volumes of material his company controls. "Sometimes the container price is more important." In fact, he seems just as proficient in the paths and prices of containers moving through Asia as he is in the price of the scrap in those containers. In late spring, Chu says, shipping prices were roughly US$10 per container more to Thailand than to Taiwan, and they were expected to rise to a US$20 differential. "But even if the price is good, if Randy has 10,000 ton and no containers are available to Thailand, then there's no point in discussing it," he adds.
"The longer I do this," Goodman says, "the more I see the advantages of working with someone like Justin and not shipping direct. He's able to look at the whole Asian market and decide whether a trade makes sense. It takes away some of the risk."
A secretary enters the conference room to ask that we wait a few minutes more. Justin nods at her and continues. "Another problem for the small shipper is that, financially, Thailand is not strong." Consequently, many mills prefer to barter—scrap in, finished product out—which favors large traders and brokers like Chu, who are in a position to market finished products. It is no accident that, in addition to selling scrap to G J, Chu markets 20,000 mt a month of the company's finished product in Hong Kong.
Somsak Leeswadtrakul, the founder and chairman of G J Steel, breezes into the conference room with a toothy smile and business cards arrayed. "Mr. Chu is the pioneer of containerizing scrap," he says as he hands me his card. "But in the beginning, everyone laughed at him."
The growing price difference between bulk and container shipping—it reached US$70 a mt in 2007 and has widened to more than US$100 a mt in the first half of 2008—drove G J Steel's switch to containers, he says. "Now we prefer the flexibility of a 1,000-mt purchase to a 50,000-mt bulk purchase."
In 1995, after four decades in the Southeast Asian steel industry, Leeswadtrakul founded G J Steel as a management and distribution company. Today, the company sells 7 million mt of hot-rolled steel a year and purchases 3 million to 4 million mt of scrap, 70 percent of which is imported. His goal, he says, is to replace the 2.3 million mt of hot-rolled products Thailand imported in 2007 with G J-produced steel.
With Thailand's economic growth at 4.8 percent in 2007, there's some doubt as to whether scrap supply and steel production can keep up with demand in an economy fueled predominantly by construction (60 percent of total steel consumption) and automobile manufacturing (12 percent). In fact, in just the first quarter of 2008, the Thai automotive industry increased production 25 percent. At the same time, Thailand's growing middle class still consumes less steel per capita—just about 200 kg per person in 2007—than its counterparts in developed, Western countries.
Leeswadtrakul must cut the meeting short, but before walking out he tells me the company's scrap future is in the hands of the small shippers who depend upon containers to get their ferrous to Thailand. "We have good relationships, long-term relationships, with [large] companies like Cargill and EMR," he tells me. "But the future is secured with the smaller exporters. They have the opportunity to grow the volume to us."
The News on Nonferrous
When I ask Chu whether he has considered adding nonferrous trading to his repertoire, he shakes his head. "I do steel. Nonferrous has other issues." There are no accurate statistics on Thailand's nonferrous industry. The scrap import numbers are both negligible and—due to corruption and misreporting—totally unreliable. Anecdotally, there is strong evidence that the Thai nonferrous business is becoming more international, with strong export and import components.
To find out more, I head east out of Bangkok on the elevated highway that passes over a flat landscape of rice fields, housing developments, and sprawling light-industrial complexes. The region is developed and relatively affluent by Asian standards, and when the road reaches Chonburi, about 60 miles away, the scenery takes on the busy and crowded characteristics of an Asia boomtown: expensive German cars, KFC outlets, and a maze of roads that run among countless two-story manufacturing buildings. My destination, ThaiCatBuyer, is at the edge of the affluence, the lime green, four-story office, warehouse, living quarters, and processing site accessible only by making a hairpin turn back in the direction of Bangkok.
Dean Durbin, the company's American founder, watches as two of his employees carry re-enforced bags filled with aluminum auto parts into the first-floor warehouse. "If you'd come yesterday or the day before, you would have seen the whole place filled with catalytic converters," he sighs. "I just shipped them out to California." He points to the loft above the warehouse, where iron cages hold a few remainders. "We buy them from the Thai muffler shops, maybe 3,000 or 4,000 per month."
As we stand in the blazing Thai sunlight, Durbin explains to me the complicated Thai catalytic converter market: ThaiCatBuyer's printed buying catalog includes more than 200 different prices for 200 different converters. "It's a competitive market," he says. "And you've gotta get the material wherever you can." The other night, he tells me, he, his wife, and several workers brought 175 converters, worth over US$33,000, "in a cart over the Thai border" from Cambodia. He shipped those, along with thousands of others, to his buyer in California, who will later sell them to a processor in Japan. Eventually, he says, he'd like to cut out the middleman and sell directly to Japan.
Durbin's appearance and history are equally colorful. Attired in black shorts, a fanny pack, a black Ferrari baseball cap, and a long, black ponytail that falls nearly the length of his back, he tells me his story. Born in Canada, he moved to Hawaii with his family when he was 12. Years ago, he and his brother ran "Hawaii's biggest junkyard," he says, until he was "screwed over" and out of the recycling trade. He took a job running a Hawaiian strip club for 23 years while his brother and a cousin near Ontario, California, remained in scrap. When the strip club went under, Durbin moved to Thailand and went into catalytic converters. Last year, he expanded his business to other scrap. Durbin says he doesn't buy much on the local market. Instead, he prefers to import low-grade, hard-to-process material from the United States, process it in Thailand, and then send it up the Thai scrap chain to bigger domestic buyers.
He leads me into the warehouse, where I notice several cages filled with computers, printers, monitors, circuitboards, and miscellaneous capacitors and other e-scrap. "We buy that from the U.S. military," he tells me. "We bid on the online military auctions, and they ship it over here unless there's some kind of security problem." When I ask him what he does with it, he shrugs and says there are "some buyers," but he doesn't appear to have much interest in their identities. We slip around the cages and peer into barrels of imported lead wheel weights, which stand beside several auto batteries and piles of imported, sealed compressors.
When I ask him whether he has any trouble importing this kind of material, he shakes his head with frustration. "It takes a while to figure out the Thai way of doing things," he sighs. "Everything is under the table." Last year, when he first started importing scrap from the United States, he had "big problems" with Thailand's big, established brokers, he says. The breaking point, he recalls, was a container of imported scrap that sat at the port for the better part of two months. Try as he might, he couldn't get it out. But then he bought a forklift from a "village man" whose wife was well-connected with customs. For a 50,000-baht fee (US$1,666), "she got [the container] out in five days." Now the biggest problem, he says, is the odd hours at which customs releases containers to his truckers: "I get phone calls at 11:30 at night saying the container is on its way from the port."
Among the more recent, challenging shipments Durbin has handled is a 40-foot container of spent aluminum shell casings, also purchased from the U.S. military. "That was a tough one," he admits. Currently, several of his employees spend their days pounding "the rings" off the casings. Even though the shell casings are clean, he's having trouble finding a local smelter willing to risk his furnace on potential gunpowder residue. "So we'll probably try to get them shredded," he says.
Durbin leads me upstairs, past his office and the apartment that he shares with his daughter and wife, past the floor that houses his employees ("I got [rural] people, rice farmers," he says), and onto the roof, where small, charred wire fragments surround two grills. "Yeah, we barbecue some wire up here," he says. He points across his property at several nearby small-scale scrap processors, including at least one plastics recycler. Next door, in an open-sided warehouse, a forklift moves between piles of ferrous. "They all pretty much operate like me," he says of the neighboring scrap companies.
We descend the stairs, turn the corner, and walk through the neighboring yard's gate to find the owner, a man who goes by the name Siroj, watching as a grapple unloads a truck full of steel turnings. Siroj doesn't speak much English, and Durbin doesn't speak much Thai, but somehow they do business. ("I pay people to know Thai," Durbin later tells me.) Siroj leads us around the back of his office to where three workers are using hammers to beat carbon steel cores from stainless "doughnuts." Durbin imported the material from the United States, and he'll export the carbon steel back there when it's all been separated. "The carbon steel is worth 500 baht [US$16] per kilo," he says.
"I'll try to get some more of this material in California next week," Durbin tells Siroj, who clearly doesn't understand him.
"Labor is cheaper in Guangzhou"
After two hours, I'm ready to go back to Bangkok, but Durbin suggests that I visit a yard run by a woman he calls Toom. He sells to her, he tells me, as he reaches her by phone.
About 20 minutes later, I am bouncing on the middle seat of a van that negotiates the bumpy road to the V.P. Lohakij Co. facility halfway between Bangkok and Chonburi. The van stops at an open gate revealing a truck scale and a large, well-organized yard dominated by piles of clean, baled copper wire, baled UBCs, and—in the distance—several small balers which employees are packing with window frames and even more UBCs.
I walk up the stairs to the office, where I'm greeted by Sales Manager Sirirat Seaouy, better known as Toom. A small woman wearing shorts and a T-shirt decorated with a one-horned devil, Toom invites me into a conference room for a Pepsi and introduces me to Nuengnuch Leunarukul, daughter of the Chinese founder of the business. Conversation is difficult due to the language barrier: The three of us have maybe 100 words in common, most of which are numbers and ReMA specifications. Still, I'm able to learn that the scrapyard is 16 years old, that it buys more than 1,000 mt a month of nonferrous metals from small dealers —including Dean Durbin—and that it has a thriving export business. "Half the aluminum goes to China, Korea, Japan," Toom tells me. "The brass goes to China, but most stays in Thailand." When I ask why they export instead of selling in Thailand, Toom tells me the markets are better and "the labor is cheaper in Guangzhou."
She offers me a tour while Leunarukul slips back into her office. "We have 100 workers here," she says, as we amble down the raised truck scale and stop beside the clean bales of copper wire, "and we have 10 trucks" which she sends as far as 1,500 km to pick up scrap. We pass exceptionally clean bales of UBCs purchased from the hotels and restaurants that serve Thailand's booming tourist trade, bales of window frames, and, finally, greasy piles of dirty aluminum auto parts procured from the country's many auto garages.
At the back of the yard, I find ingot molds for the small aluminum smelter the company operates for materials it can't export profitably. The furnace is locked behind a pile of greasy aluminum breakage. A worker sits beside it, breaking ferrous pieces off aluminum parts. I stare up at the unfiltered smokestack that rises above this exceptionally clean, hard-surfaced yard. "We don't run so often," Toom tells me. "Maybe we make 10 to 20 ton of base metal ingot per month." She looks back at a truck arriving with a load of aluminum window frames and smiles politely at me.
"How We Will Grow"
Ayutthaya, roughly 45 minutes' drive north of Bangkok, was the capital of Thailand for more than 400 years. Today the historic city is a UNESCO world heritage site, a tourist destination, and home to 70 to 80 local scrap dealers of varying size. These facilities sell to companies such as V.P. Lohakij or—due to their size and savvy—they sell directly to the numerous Chinese scrap dealers combing the area for motors and aluminum. At the very top of the local pyramid are Thawin "Twin" and Triyaporn "Jang" Jitkavinkul, a young couple who run a 6,400-square-meter yard that handles, on average, 200 mt a month of aluminum and copper.
On the day I visit, a pickup truck has just arrived with a load of aluminum transmission parts stuffed into large plastic bags. The driver and the owner of the scrap is Khun Mana, a burly 40-year-old man who tells me he started scrapping one year ago, after quitting his job working for an antiques dealer. "It's a better living," he says, while watching as some of the company's 25 laborers unload the materials from the truck onto the scale. After they weigh the parts, the workers dump them on the floor and begin working through them, searching for ferrous.
Twin, 41, guides me into the offices where his wife, Jang, a 36-year-old former nurse, is watching the truck scale and keeping an eye on the yard via security cameras. They started the business in 1998, after Twin lost his job as a bond salesman in the wake of the financial crisis and after an aborted attempt to enter the restaurant business. "I always had this scrap business in mind," he tells me, as we walk out of the office and around back to the yard. "I used to see scrap in the neighborhood." We pass a Mercedes parked behind the two-story building that serves as both office and home for the couple and their 6-year-old son.
Accompanying us is Thanaphat "Akber" Watthanakrai, Jang's tall and lanky Burmese brother-in-law. After 23 years in the gem business, he's just begun working with Twin and Jang and trying to establish a scrap import company, Akber tells me in English, which he seems to speak as fluently as Burmese or Thai. Recently he's sourced aluminum scrap from Indonesia and Malaysia, he says, which Twin and Jang's yard sorts and sells up the chain. "But it's hard to compete with the Chinese," he admits. "They have more to spend, and they are exporting from here."
Akber later tells me of the many twists in his career path that have led him to scrap. With a master's degree in physics, he moved to Thailand to work in oil and gas before getting into gems. Ever since the Asian financial crisis, however, the gem business has been slow, and he's been looking for an alternative. By luck, last year he came across an advertisement for an intensive, five-day course in scrap. "Here's my graduating class photo," he says, unwrapping a photo of more than 100 students. Despite the competition from China for scrap imports, he remains confident about his prospects. "Right now, there's a good opportunity for me," he predicts. "For metals, there isn't a good service like this yet."
Ahead of us, in an open shed, five workers sit in a circle dismantling transmission casings using electric screwdrivers and hammers. The men and the ground are covered in oil and sweat. "Skilled workers like these make 10 to 12 dollars per day," Akber says. "Unskilled make eight." I remark that the salaries are higher than I expected, and Twin smiles. "If you don't pay, things disappear," he says. We enter the yard's new, hard-surfaced 3,200-square-meter plot. It's a mostly empty, dotted with piles of aluminum bags of motor parts and barrels of hard-drive parts bought domestically. At the far end are piles of ingots Twin buys and sells—"they are only trades"—when the market feels right. "I am thinking about a furnace," he says. "But I am not sure yet. Margins are difficult."
Twin tells me he makes 1 percent to 2 percent on most of the scrap he processes. Motors provide a 5 percent to 6 percent margin —if he can beat the Chinese exporters to them. As we leave, a truck carrying a load of auto parts arrives from northeast Thailand. The drive is seven hours each way, and Twin assures me that—if the scrap is good—distance is no issue. "The future of our business is trading far away," he says. "That is how we will grow." •
Adam Minter is a journalist based in Shanghai, where he writes about business and culture for U.S. and Chinese publications and maintains a blog, www.shanghaiscrap.com.
Bouncing back from the Asian financial crisis, Thailand's healthy manufacturing sector and growing middle class are fueling a demand for metals. The country's steel mills are competitive in the containerized ferrous scrap market, but the nonferrous sector lags in comparison.