scrap/kanter/22"/mike1st/mark2nd

LARRY KANTER Staff Reporter

LONG BEACH To most people, the mountains of engine blocks, steel coils and dented appliances at PacificCoast Recycling's new scrap yard at the Port of Long Beach would look like nothing more than a bunch of junk.

But as PacificCoast's Chief Operating Officer Jim Nuckels is quick to point out: "Junk" is in the eye of the beholder.

"This is like the Lexus of scrap metal," Nuckels says, pointing to a cluster of sheared I-beam sections stacked on edge of the company's 18-acre lot. "Some of this stuff you could almost hang it on a wall. It's beautiful stuff."

But Nuckels isn't looking to sell his stuff to art collectors. Instead, PacificCoast Recycling, which opened for business earlier this year, is the latest entry in the growing, $4 billion worldwide marketplace for scrap metal.

The 100-foot-high mountains of materials accumulating at the company's waterfront site are awaiting shipment to steel manufacturing plants across the United States, as well as plants in the fast-growing territories of Asia which pay as much as $150 a ton for recycled scrap to melt down in their furnaces.

According to the Institute for Scrap Recycling Industries, a Washington-based trade group, U.S. steel-makers consumed about 57 million tons of scrap metal in 1996, up from 40 million tons a year in the early 1980s. The group estimates that 40 percent of the raw steel manufactured in the United States now comes from recycled scrap metal rather than ore.

Globally, steel manufacturers currently consume some 350 million tons of scrap, and that amount is likely to grow as developing countries acquire new steel-making facilities, says Jordan Estra, an analyst with Bankers Trust New York Corp.

The demand for scrap is growing as a result of major technological changes sweeping through the steel-making industry. The traditional image of big steel's blast furnaces melting ore from nearby mines is fast becoming a thing of the past.

Instead, almost all of the steel mills being built today are small, efficient plants dubbed "mini-mills" in the industry which rely almost exclusively on scrap, rather than ore. The new mills melt recycled steel in high-tech electric furnaces and can produce raw steel much more cheaply than the powerful blast furnaces of yesterday.

The growing demand for scrap metal has sparked a wave of consolidation in the scrap industry, which traditionally has been composed mostly of small, family-owned operations, Estra said.

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