About Schnitzer Steel Industries

Radius Recycling, Inc. operates as a recycler of ferrous and nonferrous metal, including end-of-life vehicles, and a manufacturer of finished steel products in North America. As a vertically integrated organization, the company offers a range of products and services to meet global demand through the company's network that includes 50 retail self-service auto parts stores, 54 metals recycling facilities, and an electric arc furnace ('EAF') steel mill. The company's steel mill produces finished steel products using internally sourced recycled ferrous metal as the primary raw material and sells to customers located primarily in the Western United States and Western Canada. On November 18, 2022, the company acquired the operating assets of ScrapSource, a recycling services company that provides solutions for industrial companies that generate scrap metal from their manufacturing process. The acquired business expands the company's national recycling services operations and utilizes primarily long-term contracts through which ScrapSource charges a fee to suppliers of scrap material in exchange for its services. Revenue-Generating Activities The company acquires, processes, and recycles end-of-life (salvaged) vehicles, rail cars, home appliances, industrial machinery, manufacturing scrap, and construction and demolition scrap through the company's facilities. The company's retail self-service auto parts stores located across the United States ('U.S.') and Western Canada, which operate under the commercial brand-name Pick-n-Pull, procure the significant majority of the company's salvaged vehicles and sell serviceable used auto parts from these vehicles. Upon acquiring a salvaged vehicle, the company removes catalytic converters, aluminum wheels, and batteries for separate processing and sale prior to placing the vehicle in the company's retail lot. After retail customers have removed desired parts from a vehicle, the company may remove remaining major component parts containing ferrous and nonferrous metals, which are primarily sold to wholesalers. The remaining auto bodies are crushed and shipped to the company's metals recycling facilities where geographically practical, or sold to third parties, for shredding. At the company's metals recycling facilities, the company processes mixed and large pieces of scrap metal into smaller pieces by crushing, torching, shearing, shredding, separating, and sorting, resulting in recycled ferrous, nonferrous, and mixed metal pieces of a size, density, and metal content required by customers to meet their production needs. Each of the company's shredding, nonferrous processing, and separation systems is designed to optimize the recovery of valuable recycled metal. The company operates seven deepwater port locations, six of which are equipped with large-scale shredders. The company's largest port facilities in Everett, Massachusetts; Portland, Oregon; Oakland, California; and Tacoma, Washington each operate a mega-shredder with 7,000 to 9,000 horsepower. The company's port facilities in Salinas, Puerto Rico, and Kapolei, Hawaii operate shredders with 1,500 and 4,000 horsepower, respectively. The company's port facility in Providence, Rhode Island does not operate a shredder, but exports recycled ferrous metal acquired in the regional market. In addition, the company operates a 2,500-horsepower shredder at its non-port facility in Lithonia, Georgia, which the company acquired as part of the purchase of the Encore Recycling business in April 2022. The company's shredders are designed to provide a denser product and, in conjunction with advanced separation equipment, a more refined form of recycled ferrous metal which can be used efficiently by steel mills in the production of new steel. The shredding process reduces auto bodies and other scrap metal into fist-size pieces of shredded recycled metal. The shredded material is then carried by conveyor under magnetized drums that attract the ferrous metal and separate it from the mixed nonferrous metal and other residue, resulting in a consistent and high-quality shredded ferrous product. The mixed nonferrous metal and residue then pass through a series of additional mechanical systems designed to recover and separate the nonferrous metal from the residue. The remaining mixed nonferrous metal is then further sorted by product and size grade before being sold as joint products, which include mainly zorba (primarily aluminum), zurik (primarily stainless steel), and shredded insulated wire (primarily copper and aluminum). The company sells further separated products with higher metal content, such as twitch (light gauge recycled aluminum) and shredded copper and brass. The company also purchases nonferrous metal directly from industrial vendors and other suppliers and aggregate and prepare this metal for shipment to customers by ship, rail, or truck. The company invests in nonferrous metal extraction and separation technologies to optimize the recovery of valuable nonferrous metal and to meet the metal purity requirements of customers. The company has a major strategic initiative in progress and partially completed to replace, upgrade, and add to the company's existing nonferrous metal recovery technologies in order to increase metal recovery and the volume of nonferrous material from shredding operations, provide additional product optionality, create higher quality furnace-ready products, and reduce the metallic portion of shredder residue disposed in landfills. The company's program comprises seven primary nonferrous recovery systems at the company's major shredder facilities. Of these systems, three are major aluminum and four are major copper recovery systems. The company's initiative also includes two aluminum separation systems, one on each coast, and four copper separation systems. In addition to the sale of recycled metal processed at the company's facilities, the company provides a variety of recycling and related services, including brokering the sale of ferrous and nonferrous scrap metal generated by retail and industrial entities and demolition projects to customers in the domestic market, among other services. The company also leases machinery assets to customers primarily to facilitate the provision of reverse logistics and other recycling services. The company's steel mill melt shop includes an EAF, a ladle refining furnace with enhanced steel chemistry refining capabilities, and a five-strand continuous billet caster, permitting the mill to produce special alloy grades of steel not produced by other mills on the West Coast of the U.S. The substantial majority of billets produced are reheated in a natural gas-fueled furnace and are then hot-rolled through the rolling mill to produce finished steel long products. The rolling mill has an effective annual production capacity under current conditions of approximately 580 thousand tons of finished steel products. Products and Services The company's nonferrous products include mixed metal joint products recovered from the shredding process, as well as aluminum, copper, stainless steel, nickel, brass, titanium, lead, and high temperature alloys. The company also sells catalytic converters to specialty processors that extract the nonferrous precious metals, including platinum, palladium, and rhodium. The company provides recycling and related services involving scrap metal and other recyclable materials to a range of customers, including large retailers, industrial manufacturers, original equipment manufacturers, and owners of end-of-life railcars. These services include primarily scrap brokerage, certified destruction, automotive parts recycling, railcar dismantling, and reverse logistics. During the year ended August 31, 2023 (fiscal 2023), the company expanded its recycling services operations through the company's acquisition of ScrapSource. Also in fiscal 2023, the company launched its integrated recycling services activities under the company's trademarked 3PR brand, which stands for third-party recycling and encompasses all the company's recycling services offerings. Each retail self-service auto parts store offers an extensive selection of vehicles (including domestic and foreign cars, vans, and light trucks) from which customers can remove and purchase parts. The company employs proprietary information technology systems to centrally manage and operate the geographically diverse network of auto parts stores, and the company regularly rotates the inventory to provide customers with greater access to parts. The company's used auto parts inventory is also searchable on the company's Pick-n-Pull public website. The company enter into limited duration contracts with public entities and other third parties for vehicle dismantling and asset recovery services, which provide a source of low-cost salvage vehicles. The company's steel mill produces semi-finished goods (billets) and finished goods, consisting of rebar, coiled rebar, wire rod, merchant bar, and other specialty products, using recycled ferrous metal sourced internally from the company's recycling and joint venture operations and other raw materials. Semi-finished goods are predominantly used for the manufacturing of finished products. Rebar is produced in either straight length steel bars or coils and used to increase the strength of poured concrete. Coiled rebar is preferred by some manufacturers because it reduces the waste generated by cutting individual lengths to meet customer specifications and, therefore, improves yield. Wire rod is steel rod, delivered in coiled form, used by manufacturers to produce a variety of products, such as chain link fencing, nails, wire, stucco netting, and pre-stressed concrete strand. Merchant bar consists of rounds and square steel bars used by manufacturers to produce a wide variety of products, including bolts, threaded bars, and dowel bars. The company's steel mill is also an approved supplier of high-quality rebar to support nuclear power plant construction and has a license to produce certain patented high-strength specialty steels. Customers and Markets Approximately 95% of the company's consolidated revenues are derived from sales of recycled ferrous and nonferrous metal products and finished steel products. The company sells its recycled ferrous and nonferrous metal products globally to steel mills, foundries, refineries, smelters, wholesalers, and other recycled metal processors. The company's finished steel customers are primarily steel service centers, construction industry subcontractors, steel fabricators, wire drawers, and major farm and wood products suppliers. Recycled Ferrous Metal The company exports recycled ferrous metal primarily to countries in Asia, the Mediterranean region, and North, Central, and South America. In fiscal 2023, the three countries from which the company derived its largest ferrous export revenues from external customers were Bangladesh, Turkey, and India, which collectively accounted for 72% of the company's total ferrous export revenues. Recycled Nonferrous Metal In fiscal 2023, the three countries from which the company derived its largest nonferrous export revenues from external customers were Malaysia, China, and India, which collectively accounted for 72% of the company's total nonferrous export revenues. Finished Steel Products The company sells finished steel products to customers located primarily in the Western United States and Western Canada. Distribution The company delivers recycled ferrous and nonferrous metal to foreign customers by ship and to domestic customers by barge, rail, and road transportation networks. Cost efficiencies are achieved by operating deepwater terminal facilities in Everett, Massachusetts; Portland, Oregon; Oakland, California; Tacoma, Washington; and Providence, Rhode Island, all of which are owned, except for the Providence, Rhode Island facility which is operated under a long-term lease. The company also has access to deepwater terminal facilities at Kapolei, Hawaii and Salinas, Puerto Rico through public docks. The use of deepwater terminals enables the company to load ferrous material in large vessels capable of holding up to 50,000 tons for trans-oceanic shipments. The use of the company's owned and leased terminal facilities is advantageous because it allows the company to more effectively manage loading costs and minimize the berthing delays often experienced by users of unaffiliated terminals. From time to time, the company may enter into contracts of affreightment, which guarantee the availability of ocean-going vessels, in order to manage the risks associated with ship availability and freight costs. The company's nonferrous products are shipped in 20- to 30-ton capacity containers from ports and rail ramps located in close proximity to the company's recycling facilities. Containerized shipments are exported by marine vessels to customers globally, and domestic shipments are typically shipped to customers by rail or by truck. The company sells used auto parts from its self-service retail stores. Both before and after retail customers have removed desired parts from acquired salvaged vehicles, the company extracts and consolidates certain valuable ferrous and nonferrous components from auto bodies for shipment by truck primarily to wholesale customers. The company also removes and collects catalytic converters from salvaged vehicles for shipment by truck to specialty processers which extract the nonferrous precious metals. The salvaged auto bodies are crushed and shipped by truck to the company's metals recycling facilities where geographically practical, or to third-party recyclers, for shredding. The company sells finished steel products directly from the company's steel mill in McMinnville, Oregon and the company's distribution center in City of Industry, California (Los Angeles area). Finished steel products are shipped from the mill to the distribution center primarily by rail. The distribution center facilitates sales by maintaining an inventory of products close to major customers for just-in-time delivery. The company communicates regularly with major customers to determine their anticipated needs and plan the company's rolling mill production schedule accordingly. Finished steel shipments to customers are made by common carrier, primarily truck or rail. Energy Supply The company requires electricity to run the company's steel manufacturing operations, primarily its EAF. The company purchases electricity under a long-term contract with McMinnville Water & Light ('MW&L'), which in turn relies on the Bonneville Power Administration. The company entered into the company's current contract with MW&L in October 2011 that expires in September 2028. Regulatory Matters The company's businesses are subject to extensive and rapidly evolving local, state, and federal environmental protection, health, safety, and transportation laws and regulations relating to, among others: remediation under the Comprehensive Environmental Response, Compensation and Liability Act ('CERCLA'); the discharge of materials and emissions into the air; the prevention and remediation of soil and groundwater contamination; the management, treatment, and discharge of wastewater and storm water; the generation, discharge, storage, handling, transportation, and disposal of hazardous materials and secondary materials; the protection of the company's employees' health and safety; and climate change generally. The company is required to annually report GHG emissions from the company's steel mill to the State of Oregon Department of Environmental Quality ('ODEQ') and the EPA, and the company's operations in Oregon are subject to ODEQ regulations, standards, and programs aimed at limiting GHG emissions and toxic air emissions in the state, including from large stationary sources such as the company's steel mill and Portland metals recycling facility. The company's steel mill has an operating permit issued under Title V of the Clean Air Act Amendments of 1990, which governs certain air quality standards. Competition The company's primary domestic competitors for the sale of finished steel products include Nucor Corporation's manufacturing facilities in Arizona, Utah, and Washington, and Commercial Metals Company's manufacturing facilities in Arizona. History The company was founded in 1906. It was formerly known as Schnitzer Steel Industries, Inc. and changed its name to Radius Recycling, Inc. in January 2024.