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  HEAVY METAL SCRAP DEFINITION

No. 1 Steel

No. 1 Steel consists of clean iron and steel with a minimum thickness of 1/4" and a maximum size of 60"x24" with material handling compatible to feed a furnace charge box.

No. 2 Steel

No. 2 Steel consists of clean iron and steel with a minimum thickness of 1/8" and a maximum size of 60"x24" with material handling compatible to feed a furnace charge box.

HMS1 and HMS2 steel can be further limited in size by specifying length. As an example HMS1 (1 foot) limits the maximum size to 12"x12".

STEEL PRODUCTION

In steel production, scrap metal is used for cooling the enormous quantity of heat produced by blowing oxygen on hot metal. Scrap differs in regard to the content of iron and of some tramp elements. Each melting bath unit of steel has its own material constraints for the amount of iron and tramp elements in order to guarantee the desired quality. HMS1 and HMS2 is usually the preferred scrap used in the production of steel.

The use of scrap also reduces the total cost of producing steel. Steel mills use one of two types of furnaces to make new steel. The oldest type is called a basic oxygen furnace. It uses a minimum of 25% scrap to make new flat-rolled steel products such as cans and automobiles. The other type is called the electric arc furnace. It uses virtually 100% of steel scrap to make new products such as structural beams, rebar and plate steel.

PRICE OF STEEL SCRAP

HMS1 and 2 are defined as Obsolete Scrap, which is generated when a steel product comes to it's life end and is recovered before being landfilled. The amount of obsolete scrap, which is generated per year, is proportional to the amount of accumulation of steel products within the world. This accumulation is expected to almost double by the year 2010.

On the other hand, the quality of obsolete scrap will be deteriorating because of the increase use of the Electric Arc furnace process for processing coated steel and producing a diversified combination of steel materials. Although more obsolete steel will be available, the contamination resulting from the Electric Arc process will result in a net reduction of available HMS1 and HMS2 over the next several years. It is expected that this reduction in available HMS1 and 2 steel will result in an increase in price over this same period.

In addition, as mini-mills expand into both hot and cold flat-rolled markets, competition for furnace charge materials will increase, especially for premium grade low-residual scrap such as HMS1 and HMS2 steel. Globally, the demand for steel products is also expected to increase through the year 2010 with nearly 54 million tons of new production scheduled to come on line by the turn of the century. These developments will also drive up the cost of scrap No. 1 & 2 steel.

WHEN YOU BUY STEEL SCRAP, THINK OF ALLIED WORLD RESOURCES

Steel is a unique material because it always contains recycled steel. Each year, millions of tons of steel products are recycled by steel mills into every ton of new steel produced. In addition, new steel products can themselves be recycled. As steel is recycled, it maintains its strength and integrity so it can be made into one product after another.

An infrastructure of ferrous scrap processors exists to prepare all types of steel products for recycling. Allied World Resources maintains contact with these processors and can provide you with the HMS1 and HMS2 steel needed by steel mills and foundries for re-melting into new steel.

INFORMATION

For additional information, or to request a rate or delivery quotation contact

awrscrapsteel@alliedworldresources.com