2.1 Introduction (B) "One man's trash is another man's treasure." Alex Gonzales looked across the piles of scrap at her family's business, Atlas Scrap Metal in Richmond, California. Alex knew the scrap metal industry might not seem very glamorous to some, but she was proud of the business knowing it played an important role the circular economy. "This could all be dumped in a landfill and new metals would have to be mined and extracted. We're not just running a business, we're helping ensure the earth's resources are used sustainably." Alex had recently graduated with a degree in accounting and sustainability, and would be starting as a business analyst with an international recycler in the fall. She had agreed to spend the summer between graduation and her start date working to help the family's scrap business develop a strategic plan by analyzing the company's product costs and contributions Atlas Scrap Metal recovers and sells steel from scrapped materials such as cars. Mixed metals are a by- product of Atlas' steel reclamation process that are sold for further processing. Alex wandered through the loading yard which was packed with containers filled with mixed metal bound for the local port Mixed metal is the raw material used by many metal processors to produce and reclaim sellable copper, aluminum, and zinc, which can then be sold as commodity metals that are necessary for supporting manufacturing and construction. The containers of mixed metal would soon be bound for an incoming container ship from China. The containers of mixed metal would then be loaded as cargo for the ship's return trip across the sea. The containers would eventually be delivered to Chinese buyers to be processed further into sellable metals. Alex had spent the past few weeks studying the buying and selling of mixed metal on the global market. Alex and her family had talked at length about whether Atlas should continue to sell the containers of mixed metal to the highest bidder. Maybe it was time for Atlas to consider vertically integrating and processing the mixed metal scrap itself. Encouraged by the bids Atlas was receiving for mixed metal, and the strong market prices for the refined, reclaimed commodity metals, Alex urged her family to consider adding mixed metal processing to the operations at Atlas. She believed the company could increase its profits if it began further processing the by-product into sellable refined metals. Her father was skeptical, leery of the potential commitment to the additional labor and /or equipment the He challenged her to come up with the numbers behind her claim, saying, "Once you look at all the cash flows, I think you'll see where the risks are xpansion would require 2.2 Scrap Metal as a Product For most consumers, the purchase of a new car or appliance includes a plan to dispose of the old model. A functioning used car might be sold, traded in to the dealer, or donated to charity. But an inoperable one that cannot be repaired at a reasonable price ends up in a scrapyard. Be recover, this scrapped car can be transformed into products that are bought and sold around the world. Atlas Scrap Metal recovers steel metal and mixed nonferrous metals from s various other sources, including discarded appliances and scrap from demolition sites there is value to aged automobiles and The U.S. is the largest producer and exporter of scrap metal. About half of domestic metal production in the U.S. comes from scrap, and about a third of U.S. scrap metal is exported to other countries Downstream markets for ferrous metals such as steel include the construction of skyscrapers, bridges housing, automobiles, tools and hardware. Downstream markets for nonferrous metals, including aluminum and copper, include wiring and electronic applications. In the past decade, China has been the largest export market for U.S. scrap metal due to its high economic growth and corresponding infrastructure development. In fact, scrap metal is one of the largest U.S. exports to China (Kalyani 2016) Future demand is likely to come from places where the need for these metals is the greatest and infrastructure development is strong (BIR 2016). Government interventions such as mining capacity reductions are likely to have a positive effect on scrap steel prices (Kalyani 2016) 2.1 Introduction (B) "One man's trash is another man's treasure." Alex Gonzales looked across the piles of scrap at her family's business, Atlas Scrap Metal in Richmond, California. Alex knew the scrap metal industry might not seem very glamorous to some, but she was proud of the business knowing it played an important role the circular economy. "This could all be dumped in a landfill and new metals would have to be mined and extracted. We're not just running a business, we're helping ensure the earth's resources are used sustainably." Alex had recently graduated with a degree in accounting and sustainability, and would be starting as a business analyst with an international recycler in the fall. She had agreed to spend the summer between graduation and her start date working to help the family's scrap business develop a strategic plan by analyzing the company's product costs and contributions Atlas Scrap Metal recovers and sells steel from scrapped materials such as cars. Mixed metals are a by- product of Atlas' steel reclamation process that are sold for further processing. Alex wandered through the loading yard which was packed with containers filled with mixed metal bound for the local port Mixed metal is the raw material used by many metal processors to produce and reclaim sellable copper, aluminum, and zinc, which can then be sold as commodity metals that are necessary for supporting manufacturing and construction. The containers of mixed metal would soon be bound for an incoming container ship from China. The containers of mixed metal would then be loaded as cargo for the ship's return trip across the sea. The containers would eventually be delivered to Chinese buyers to be processed further into sellable metals. Alex had spent the past few weeks studying the buying and selling of mixed metal on the global market. Alex and her family had talked at length about whether Atlas should continue to sell the containers of mixed metal to the highest bidder. Maybe it was time for Atlas to consider vertically integrating and processing the mixed metal scrap itself. Encouraged by the bids Atlas was receiving for mixed metal, and the strong market prices for the refined, reclaimed commodity metals, Alex urged her family to consider adding mixed metal processing to the operations at Atlas. She believed the company could increase its profits if it began further processing the by-product into sellable refined metals. Her father was skeptical, leery of the potential commitment to the additional labor and /or equipment the He challenged her to come up with the numbers behind her claim, saying, "Once you look at all the cash flows, I think you'll see where the risks are xpansion would require 2.2 Scrap Metal as a Product For most consumers, the purchase of a new car or appliance includes a plan to dispose of the old model. A functioning used car might be sold, traded in to the dealer, or donated to charity. But an inoperable one that cannot be repaired at a reasonable price ends up in a scrapyard. Be recover, this scrapped car can be transformed into products that are bought and sold around the world. Atlas Scrap Metal recovers steel metal and mixed nonferrous metals from s various other sources, including discarded appliances and scrap from demolition sites there is value to aged automobiles and The U.S. is the largest producer and exporter of scrap metal. About half of domestic metal production in the U.S. comes from scrap, and about a third of U.S. scrap metal is exported to other countries Downstream markets for ferrous metals such as steel include the construction of skyscrapers, bridges housing, automobiles, tools and hardware. Downstream markets for nonferrous metals, including aluminum and copper, include wiring and electronic applications. In the past decade, China has been the largest export market for U.S. scrap metal due to its high economic growth and corresponding infrastructure development. In fact, scrap metal is one of the largest U.S. exports to China (Kalyani 2016) Future demand is likely to come from places where the need for these metals is the greatest and infrastructure development is strong (BIR 2016). Government interventions such as mining capacity reductions are likely to have a positive effect on scrap steel prices (Kalyani 2016)