Greenwave's Margins Expand as Scrap Metal Prices Surge Ahead of Steel and Aluminum Import Tariffs Taking Effect March 12, 2025

Core Viewpoint - Greenwave Technology Solutions is experiencing significant margin expansion due to a surge in scrap steel prices, which have increased over 20% in the past month, and anticipates further growth driven by upcoming tariffs on copper imports and the opening of a new steelmaking facility by Nucor Corporation [1][5]. Group 1: Company Operations - Greenwave operates 13 metal recycling facilities across Virginia, North Carolina, and Ohio, providing 100% domestically-sourced scrap metal to major industry players such as Nucor, Sims, Cleveland-Cliffs, and Georgia-Pacific [2][9]. - The company holds a competitive advantage through a portfolio of operational licenses for its recycling facilities, which are protected by grandfathered municipal codes, creating significant barriers to entry for competitors [4]. Group 2: Market Position and Growth Catalysts - The upcoming tariffs on steel and aluminum imports are expected to strengthen national security and remain in effect for the foreseeable future, benefiting Greenwave's operations [3]. - Greenwave's strategic positioning near the largest U.S. Naval Base in Norfolk allows it to maintain a steady supply of military-grade scrap metal, which is crucial for national security projects [6][7]. - The opening of Nucor's new steelmaking facility in Lexington, North Carolina, with a processing capacity of 430,000 tons annually, is projected to significantly increase regional demand for recycled steel [5]. Group 3: Financial Implications - The surge in scrap steel prices is expected to drive revenue growth and margin expansion for Greenwave, with prices anticipated to rise further [1][2]. - The company has recently acquired real estate for seven of its core facilities, reducing annual rent expenses by approximately $1.7 million, which enhances cash flow and positions the company for potential strategic transactions [4]. Group 4: Industry Context - The limited supply of scrap metal in the market, combined with increasing demand driven by initiatives such as President Trump's shipbuilding program, positions Greenwave to capitalize on a growing market for domestic scrap metal [8].