Why SMI Bought Allmetal, and Why It Probably Isn't Done

By Siam Sukkhee Trading Co., Ltd — 2026-07-08 — metal scrap recycling industry

I watched the Allmetal deal close in late December and thought: here we go again. The mid-continent scrap market is consolidating whether anyone likes it or not.

SMI—Scrap Management Industries, Kansas City, been around since 1973—just swallowed Allmetal Recycling whole. That's 10 new yards in Kansas, five shredders now total, 19 facilities across three states, and a $120 million term loan from Eldridge Diversified Credit sitting in the bank like pocket change.

The real thing to understand here is why this matters at all.

Scrap metal trading isn't like selling cars or shirts. When ferrous prices drop hard in a quarter, a single-yard operator feels every rupee of it. A guy running three yards gets compressed. A guy running nineteen yards can absorb the hit across geography and volume and actually move forward. Or at least not backwards. That's the whole game, actually—not losing ground when the market turns.

Commodity prices for scrap metals swing like a drunk man's arms. Chinese demand policy moves it. American infrastructure spending moves it. Tariffs move it. Volatility used to kill smaller independents. Now it just kills the ones too stubborn or undercapitalised to survive.

Clint and Kolby Cornejo founded Allmetal in 2009 and built something solid. Not huge, but real—scattered through Wichita, Salina, Newton, the smaller Kansas towns. Places that weren't sexy but fed a steady supply of ferrous scrap from farming equipment, auto dismantling, demolition. The kind of work that doesn't stop because it's not fashionable.

Both Cornejos stayed in the deal. That matters more than it sounds.

In a relationship-driven business—and this one absolutely is, more or less—you're not just buying yards. You're buying the guy who sits in the salvage yard and knows the demolition contractor by his father's name. You're buying trust. Actually, that's not quite right. You're buying the people who own the trust, and hoping they stay long enough for it to transfer.

How You Get to Nineteen Yards

The $120 million facility is the interesting bit. Eldridge Diversified Credit—a Carlyle thing, AlpInvest partnership, the usual private credit machinery—closed this in March 2026. What that signals, as far as I can tell, is that institutional money now believes the mid-continent scrap market is ready for the same kind of rollup consolidation that's already happened in other regions. That there's enough fragmentation left to make it work financially. That a company with real infrastructure can swing multiple acquisitions in quick succession and come out ahead.

The math is actually simple once you see it.

A five-shredder network with coordinated logistics can do things a three-yard operator can't touch. When intake prices swing, you adjust the mix. When a customer wants volume you can't source locally, you pull from another facility. You hedge across a broader book of business. You run your megashredders hot because you have the material to feed them. Scale doesn't feel glamorous in the recycling business. It's just mechanically efficient.

Kansas has a particular kind of logic worth mentioning. Agricultural equipment. Industrial corridors. Steady demolition work. Pratt, Great Bend, McPherson—these aren't market darlings, but they're consistent sources of ferrous material. For someone obsessed with shredder utilization, consistent beats fashionable every single time.

The Eldridge facility also tells you something else: this is not a one-time deal. You don't close a $120 million credit line and then sit quietly. SMI has runway to do this again. Two, three more acquisitions probably. The infrastructure exists, the appetite exists, and the regional market is still fragmented enough to make it work.

Whether they do is another question.

Tags: Scrap Management Industries, Allmetal Recycling, Eldridge Diversified Credit, scrap metal consolidation Kansas 2026, SMI Allmetal recycling acquisition, mid-continent scrap yard rollup