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Buying and Selling Scrap Metal

Ferrous Processing and Trading provides details on the subject of buying and selling scrap metals.

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Buying and Selling Scrap Metal

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  1. Ferrous Processing & Trading Buying and Selling Scrap Metal

  2. Understanding the Ferrous Scrap Market • Scrap Sources • Mill or Revert Scrap • Produced within the steelmaking operation • Prompt Industrial Scrap • Produced at manufacturing plants: blanking, punching, stamping, torch cutting, machining, rejections • Obsolete Scrap • Consumer and industrial discards of old steel-bearing buildings, structures, machinery, autos & consumer goods. Virtually of this requires processing prior to recycling (remelting).

  3. Understanding the Ferrous Scrap Market • Players in the Scrap Market • Scrap Generators • All of us…..focusing here on automotive manufacturing plants • Scrap Collectors, Processors, Dealers • Compete with each other for raw material • Convert (process) as required to meet consumer specifications: • Reduce piece sizing: torching, shearing, shredding • Increase piece sizing: baling, briquetting • Increase bulk density: baling, shredding, briquetting • Improve metallic yield: shredding, shearing, hand sorting • Reduce tramp metals: shredding, shearing, hand sorting • Agglomerate / blend parcels for shipment

  4. Understanding the Ferrous Scrap Market • Players in the Scrap Market (cont’d) • Scrap Brokers • Act as principals in scrap sales (taking ownership & selling) • Deal with a number of consumers and dealers • Provide “fluidity” of month-to-month scrap movements to accommodate local & regional changes in supply / demand • Exporters • Historically provided dock facilities for moving bulk cargos • New trends in containerized scrap shipments make domestic dealers and overseas consumers less dependent on export docks • Carriers • Truckers and Railroads

  5. Understanding the Ferrous Scrap Market • Players in the Scrap Market (cont’d) • Consumers • Steel Mills • Conventional Integrated Steelmakers • Iron ore-based (80% hot metal, 20% scrap) • Historical buyer of automotive scrap (bundles) • No new mills in the US since 1962 • Electric Furnace (Mini-mill) Steelmakers • 100% Scrap or Scrap Substitutes • Major investments in flat-rolled market • Primary buyer of automotive scrap today • Foundries • Iron and Steel Castings

  6. Understanding the Ferrous Scrap Market • How the Scrap Market Works • Consumer versus supplier driven….scrap is bought, not sold • Suppliers have no long-term pricing power or control • Scrap is not manufactured, it is processed • No commodities exchange to establish pricing or futures • Economies of scale work in reverse: • Higher volume = Higher unit pricing • Price Elasticity • Obsolete scrap price elasticity perhaps .3 (10% price increase = 3% increase in supply) • Industrial scrap is price INELASTIC

  7. Scrap Grades Stamping Offal Produced by stamping and blanking operations

  8. Scrap Grades Stamping Offal-based Grades #1 Bundles (Bales) from Onsite or Offsite Baling Operation #1 Busheling Blanking or Punch Presses Clipress (Busheling) from Onsite Clipress Operation RamPress Wafers from Onsite RamPress Operation #1 Shredded Clips from Offsite Shredding Operations

  9. Scrap Grades Machining-based Scrap Grades Cast Iron Borings Machining of Cast Iron Machine Shop (Steel) Turnings Machining of Steel Hot Briquettes produced from Cast Iron Borings

  10. Scrap Grades Obsolete Scrap Grades Miscellaneous Unprepared (Tearouts, demolition, etc) Scrapped Autos #2 Shredded Auto Scrap (Fragmentized)

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