Today, more than 50% of metal manufactured globally is from scrap metal. The demand and interest in metal scrap recycling is growing at a rate of 3% per year. The growth in demand has been spurred by climate change and strict environmental policies and regulations, in addition to a much lower cost of production than producing virgin steel.
Recycling metal has enormous environmental benefits including diversion of waste from landfills, preservation of natural resources, but most importantly it requires much less energy to recycle metals, cutting C02 emissions. It takes 56% less energy to recycle steel than the creation of virgin steel including saving 2,500 pounds of iron ore, 1,400 pounds of coal and 120 pounds of limestone to create 1 ton of steel. The savings speak to for themselves.
The scrap metal industry has been around for hundreds of years. It has been long recognized as being a more efficient process than mining and processing new ore. In 2020, the scrap metal recycling sector is worth $280 billion and it’s expected to grow by 2021 to 997.9 million metric ton representing an annual growth of more than 3%.
Steel is a 100% recyclable metal and at present, 50% of steel products in Europe are made from recycled scrap steel. 25% of car bodies use recycled steel and all steel products contain recycled steel as it is a necessary ingredient. Due to its value and endless recycling capacity, there is a well-established market for steel scrap.
The “new” production of the steel market might be struggling but recycled steel is on the rise, as demand for metal products is growing. The environmental regulations are increasing, which means energy efficiency is on the agenda of most manufacturers.
Access to Investing in the Scrap Metal Industry
After 10 years of very successful wood commodity trading, GG Capital (click here to find out more about GG Capital) has now entered the scrap metal market. They trade scrap metal (mainly steel) in Scandinavia, the Baltics and Russia. Based in Switzerland and regulated by Swiss laws and regulations, the scrap metal subsidiary of GG Capital is now offering a 12-month Recycled Metal Fixed Income Plan. The plan pays a fixed interest of 9% per year every three months directly to your bank account.
GG Capital has a long-term contract with one of the largest metal recycling plants in the Baltics to supply them a minimum 4,000 tons per month. This contract represents an annual revenue of 13,000,000 euros.
This is a senior insured loan that finances the metal scrap trading operations. Such financing structure is a standard industry practice, which provides the industry players with the necessary cash flow to finance the trade from scrap metal collection to the factory clients. The trade is fully insured by the sellers and the buyers, protecting investors from any issues during the transportation. The agreements are signed in advance with the clients.
Why not go to banks for a loan? All banks and financial institutions, just like private investors, have mandates or strategies where they invest. This narrows down drastically the number of banks and lending institutions that have the mandate to invest in such industries. In addition, banks prefer to lend money to businesses that invest in property than in commercially trading companies, not to mention the bureaucracy the companies have to go through on a continuous basis, which is very costly and time consuming.
Such private placements through loans, facilitate the access to regular cash flow and provide opportunities for investors that would normally be only available to very few. Additionally, this allows the companies to retain ownership in their businesses.
Key Information:
Interest rate: 9% interest p.a. paid every quarter
Minimum investment: 40,000 USD/EUR/GBP
Term: 12 months (with an option to renew)
No management or admin fees
US citizens and residents are eligible
To receive the factsheet, please contact us at info@crewinvest.net
Crewinvest is one of the introducers that GG Capital works with and provides access to the 12-month Fixed Income Plans. Crewinvest has been offering investment, savings and retirement solutions for the last 25 years. Our journey as a brokerage firm began in the UK in the 1980s, assisting investors from all over the world, covering all areas of personal financial matters, offering a choice of retirement plans and fixed income bonds. We have no access to our client’s funds, all agreements are signed directly with the companies.