Cash for scrap

Recycled metal recoups costs, improves profitability and is simply, more sustainable.

By Hypertherm
Posted on 09/05/2018 in SPARK the blog, Plasma cutting

Scrapping is the kind of business that you can just pick-up over time, according to Johnny Cunningham. “You could get a business degree, but everyone in scrapping learns on the job.” He knows because he founded Cunningham Metals in Russellville, Arkansas more than 45 years ago and his thriving business now employs 32 people.  

It’s this kind of street smarts that has enabled Cunningham to grow his business and offer a variety of services. Individuals from the community have always brought metal to Cunningham’s yard, but a big part of his business is commercial pick-ups. Area businesses have Cunningham’s bins and containers stored onsite and his employees stop-by to pick-up metal scrap on a daily, weekly, or monthly schedule. His fleet of four 18 wheelers are constantly in service, making routine trips to the more than 50 manufacturing plants in his region.  

Unlike many man-made materials, metal can be recycled again and again, without degradation. Not to mention, recycled metals are fundamentally cheaper and more sustainable than mined metal. Furthermore, recycling reduces landfill waste by redirecting end-of-life products to recycling centers. This practice circumvents issues associated with mining and processing metal ore, like high energy consumption, pollution, safety hazards, etc. Cunningham and scrappers like him, steel mills and metal suppliers are interested in buying both new and old metal scrap.

“New Scrap” is generated in manufacturing processes and is quickly cycled back into the production. This metal has a known composition, origin, and is typically free from contamination. New scrap includes metal skeletons, clippings, drops, and stamping off-cuts. This metal is preferably clean and devoid of paint or coatings, like enameling or galvanization.

“Old Scrap” is metal recovered from depreciated machinery, equipment, or other products. It takes a significant amount of time for these metals to cycle back into the supply chain and production. These end-of-life products characteristically have a mixture of elements so it is a detailed process to extract and sort them. Old scrap is sometimes referred to as “urban mining” in a comparison to mining virgin ore from the earth. Worn copper pipes are a great example of old scrap.

Are you ready to cash in on your scrap? Here are some factors to consider:

Metal sorting – Separation is necessary to get the maximum payout, otherwise the compensation will be limited to the least valuable metal in a mixed load.

Non-ferrous vs. ferrous metals – Non-ferrous metals tend to be rare. That means copper, brass, tin, titanium, nickel, lead, and aluminum tend to be more valuable than stainless steel, mild steel, carbon steel, cast and wrought irons. Keep a magnet handy to check materials in question. If the magnet sticks to the metal then that is a strong indication it is ferrous in nature and made of steel or other iron-rich metals.

Market value – Ferrous metals make-up the majority of the world’s recycled metals and it is the shear abundance of the material that drops market value, however ferrous prices are more stable than non-ferrous prices in thanks to established infrastructures, vital to trade and process it. While copper, brass and other non-ferrous metal prices vary dramatically from month to month based on the combination of high demand and limited supply.

Prices – Metal is a commodity, so prices are generally negotiable. The more metal you can offer up for sale, the more negotiating power you have. It is economy of scale since larger loads make it worth the time and effort to trade. Businesses with consistently large loads of metal will develop strong relationship with scrappers, steel mills, and other metal brokers in demand for the material. Even businesses with lower volumes can find ways to create value through partnerships, but stay current on the present market prices so you know objectively what the fair market value is.

Trusted partnerships – “Trust” is critical in partnerships with scrappers, steel mills, and metal suppliers. The right associations can be valuable resources for information and guidance on how to turn expenses into profit centers. Reputable partners can offer ideas and suggestions on how to prep, sort, and secure your scrap metal in order to maximize profit.

Related organizations – There are clear laws and best practices around solid waste management and organizations like the Environmental Protection Agency, Institute of Scrap Recycling Industries, and Bureau of International Recycling can offer additional guidance.

The benefits from recycling metal scrap are undeniable for any company. In addition to making good business sense by creating a supplementary revenue stream, the environmental sustainability piece is a competitive advantage in today’s marketplace. Companies that actively recycle are differentiating themselves because buyers recognize that companies play a critical role in either damaging the environment, or choosing to protect it.

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