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Scrap metal price rises; junk yard war simmering

Date Posted: 2003-12-25

Junkyards in Okinawa Prefecture are up in arms, as two scrap metal dealers have started paying people who bring their old cars to their facilities for junking. Junkyards used to pay up to Y3,000 per ton for junked cars, but then the was law changed, allowing junk car dealers to charge for junking. The argument was that the cost of scrap metal was too low, and the cost to dispose oil, batteries and tires too high to be profitable.

The price of scrap metal has recently risen with the demand from North Korean, Russian and domestic steel makers increasing. To ensure a steady supply of scrap metal, two Naha scrap metal dealers, Takuman Shoji and Takuryu Metal Co. started paying for junk cars, and that has angered others in the business.

The Okinawa Recycling Association held an emergency meeting Dec. 20 to discuss the issue. After the meeting, association chairman Kenichi Moriyama said the association would use all means in their disposal to press the two companies to return to common practice. “We will send a letter of protest to those two companies. It is our position that people who want to scrap their cars should pay for the service,” Moriyama says.

The two companies say that as the scrap metal prices have risen it’s only fair to pay people. “We sell the scrap metal from junked cars overseas at a high price. Of course we can pay people who take the trouble of bringing their junk to us,” Hideyoshi Higa of Takunen Shoji says.

Takuryu Metal Co. President Seikai Kohatsu agrees. “Economic and business situation changes all the time, and we in the business have to change along. Now the prices in scrap business are such that we can afford to pay for the junk, and I think that’s fair,” Kohatsu said.

One obstacle the two junk sellers face is that they need a license for sale of used goods to overseas. One of the first things the Recycling Association did was to point the need of the license to relevant authorities.

The association, however, seems to be mounting a losing battle. One effectcts of the law allowing junk yards to charge for junking cars has been an increasing number of abandoned rusting cars on roadsides and public areas. “If those junk cars become valuable, someone is going to make a business of collecting the scrap and selling it to metal dealers who are willing to pay,” an official at the Okinawa Prefecture General Bureau predicted.

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