'Clunkers' will bolster scrap supply
By Anna Stablum, Bloomberg
August 6, 2009, 1:07 pm TWN
The U.S. “cash for clunkers” program, aimed at supporting automakers, will also bolster supplies to recyclers contending with a decline in scrapping, an industry group said.
U.S. scrap companies had expected to shred 10 million to 11 million vehicles this year, down from an annual average of 14 million to 15 million, said Bruce Savage, an official at the Institute of Scrap Recycling Industries. The clunkers program will add about another 250,000 vehicles, potentially rising to 750,000 if the government expands the plan, he said.
“We have the capacity to handle those cash-for-clunker cars without any major impact,” Savage said by phone Tuesday from Washington. “The intention is that the material will be recycled and provided back to steel mills and others who will be producing new automobiles and new consumer products.”
The program proved so popular that an initial US$1 billion was exhausted in less than a week. The House approved an emergency measure on July 31 that would add US$2 billion to keep the program going.
The Car Allowance Rebate System provides credits of as much as US$4,500 for new, more fuel-efficient vehicle when turning in an older car or truck to be junked.
“What we need is the economy to pick back up and new building projects and new highway infrastructure, all those kinds of things that would demand the commodities,” Savage said. “So we are more than willing to assist in the program, but it is not a hugely significant number for us.”
The Institute of Scrap Recycling Industries is based in Washington and represents 1,600 member companies.