Not all that rusts is recyclable.

You wouldn't necessarily know it when it comes to mothballed military ships. Right now, companies in the United States and abroad hardly can wait to get their cutting torches on the 180 or so such vessels the U.S. government wants to unload.

And there are more vessels sailing out of service every year, meaning there is an awful lot of floating scrap metal waiting to be recycled. Scrap metal prices are soaring, fueled by demand for raw materials in this country and in the economically rip-roaring China and India.

But the fast-deteriorating ships aren't getting hull maintenance. They are the source of screaming little voices in the minds of congressmen and U.S. officials.

The fear is that all it might take is a really nasty Pacific storm or raging effects of a hurricane to send one or more of these vessels to the bottom of a bay in Virginia, California or Texas - releasing an environmentally toxic cloud.

Knowing that, Congress has passed a law requiring the U.S. Maritime Administration to get rid of all vessels in the National Defense Reserve Fleet by September of this year.

That's not likely to happen.

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The problem is a deadly one.

The former battleships and supply ships harbor hazardous material. It's there by the tons - asbestos, PCBs, heavy metals and more - stuff that can slowly kill you or damage unborn children.

There's a conga line of steel-hungry countries like Bangladesh, Turkey, Pakistan, China and India willing to buy obsolete vessels, regardless of what they contain.

Up until the mid-1990s, the United States sold its obsolete military vessels overseas. The money went back into the U.S. Treasury. The PCBs, oils and others substances were ripped or dripped off the military vessels and cargo ships. The toxics went into the water, onto sandy beaches, into the air and into the bodies of Third World workers and their families. That wasn't all that was deadly. On-the-job injuries have killed hundreds of untrained and unprotected workers on foreign shores over the past two decades. Few organizations are talking about the effects on wildlife.

In its “End of Life Ships” report released in 2005, the environmental group Greenpeace documented unreported deaths and people's exposure to toxins in India and Bangladesh. While there are no official government records, the report estimated at least 1,000 deaths in Bangladesh due to accidents over the past 20 years. Officials in India put the number at 372, but the report said eyewitness accounts suggested that number was largely underestimated.

“In addition, the official and estimated figures do not include casualties as a result of diseases: the ‘hidden' deaths,” the report said

Greenpeace concluded those deaths due to disease and exposure to toxics may total in the thousands.

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Starting in the 1980s, human rights and environmental groups began decrying the practice of shipping toxic wastes to the developing countries. They argued those countries are the ones least able to deal with it.

In 1995, the United Nations passed the Basel Ban Amendment. The treaty banned industrialized nations from exporting toxic wastes to developing countries, but the amendment has never been fully enforced.

“The U.S. is the worse actor out there trying to undermine the Basel treaty and the Basel Ban,” said Jim Puckett, coordinator of the Seattle-based Basel Action Network.

Most European nations have ratified the treaty or amendment. The United States has refused.

Puckett's group formed in 1997 as a global watchdog on toxic trade. BAN has been rattling U.S. officials ever since. It, along with the Sierra Club, sued the U.S. Maritime Administration in 2003 over it's attempt to export U.S. ships to Britain. Four went. Nine others remained and were to be sold to ship recyclers here in the states.

“Technically, the U.S. not being a party to Basel, they could export to India tomorrow,” Puckett said.

The only barrier is the Toxic Control Substances Act that bans the export of PCBs, which most old ships contain.

In fact, in its October 2005 report to Congress, U.S. Maritime officials indicated they intend to export more of the vessels to Britain if the court rules in its favor.

“If you're smart, these ships are valuable. You don't want to scuttle them. You're talking millions of dollars in steel,” Puckett said.

Right now, there are a half-dozen U.S. ship recycling companies proving that. But for ship recyclers in Texas, while labor is cheap, towing vessels from Suisun Bay through Panama Canal is not.

This is where Oregon fits into the picture.

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Scrap metal is a commodity.

Recycling profits depend on supply and costs to process. A military ship averages about 10,000 to 12,000 tons in gross weight, or about 7,500 tons light ship weight, according to MARAD.

“Recycling works when there is demand for the recycled material and new products,” said Tom Zelenka, vice president for Schnitzer Steel Industries Inc.

Right now, there's a healthy demand within the United States and globally. To understand what's happened, Zelenka said, it's good to get an overview.

Back in 1997, people were talking about the economic Asian flu. The industry was sniffling with scrap prices at a 30-year low. Scrap was selling for less than $100 a ton.

“Clearly, a lot of people were losing money,” Zelenka said.

Fast forward to 2004.

China was on a huge buying spree. The Chinese were snapping up iron ores, grain and coal. They wanted finished and raw materials. Freight rates went up, because there was a scarcity of ships. (That meant there were fewer ships being recycled, meaning less scrap steel). Scrap metal prices topped $300 a ton. For recyclers, other costs went up, too, as they pulled in metal from sources farther and farther away.

Industry analysts have been watching China. In the past six to seven years, the country has increased steel production from less than 100 million tons annually to about 400 million tons. In two to three years' time, the country has accounted for 50 percent of the steel consumption growth worldwide. While China is paying less for scrap metal now, analysts can't agree on the future.

“Different people are looking at the tea leaves differently,” Zelenka said.

And then there's India, a country with a billion people.

“They clearly have a pent-up demand,” he said.

For people studying the steel market it's a challenge knowing what to expect from Asia. Numbers are based on best judgments in a region not famed for its clarity and transparency when it comes to market news.

For the Northwest and perhaps globally, it seems scrap metal prices are again firming up, Zelenka said. The only true measure, though, is at the point of a sale. If a ship recycler were to open in Coos Bay or anywhere else in Oregon, there likely would be a market for the metal.

“If there is scrap generated, we certainly would consider buying it,” Zelenka said.