5 Tips to Maximize the Value of Scrap Metal
The troft in metal prices that we’ve seen in the metal industry over the past few years has been painful, we’ve felt it, and if you’re reading this, you’ve likely felt it. Tungsten, Molybdenum are all trading at less than half of what they were just 2 years ago. This deflation has lead some within our industry to speculate on metal, holding onto material, waiting for better prices. We’re written about the risks of speculating before.
Rather than stockpiling materials hoping for higher prices, follow these simple techniques, to maximize the value of scrap while also ensuring cashflow and solvency.
Separate Your Scrap – Traders buy mixed loads of scrap everyday and while their business is organized to sort this material, it’s always preferred to buy a clean load. Setting up a system in your shop where tool steel and tungsten carbide end up in different bins is an easy way to ensure the price is always the highest. The reduction in labour is also going to speed up the process and get cash in your hands ASAP.
Knowledge is Power – Despite the virtuous nature of our industry, we’ve come in contact with metal traders/scrap dealers who are comfortable in buying material as one type, and selling it as another. If you don’t have a niton gun, or a bill of materials, ask to see the readout or detailed sorting report. To understand prices, spending 5-10 minutes searching for listings online is going to give you a rough estimate of current prices. Keep in mind, these are heavily dependent on quantity and local demand.
Keep it Clean – There are lots of processes that will result in oil, water, or other contaminates mixing with your metal scrap. While the value of the base material is going to remain the same, treatment fees can reduce the bottom line. This is more true in Steel turnings or titanium scrap. Simply throw a tarp over your scrap if it’s outside or removing from an area that sees contamination in your workspace.
Prep it for delivery – Storing your material in a way that makes them easy to move will allow for easier transport. The ideal options are metal or plastic drums loaded onto a pallet. 3,000-4,000lbs is the maximum weight on a pallet. Freight costs are dependent on volume and weight so if you can reduce volume (size) it’s a more profitable transaction for traders.
Keep it Secure – You’d be hard pressed to find another industry that is hurt more by theft than metal recycling. It’s difficult to maximize the value of scrap when it’s leaving in employee or customers pockets. Keeping Tungsten or other valuable materials in locked containers or cages is a worthwhile investment. Keeping this material under surveillance and away from high traffic areas of your site is also going to help considerably.
If you ensure that you come from a point of strength when selling your scrap, you’re going to get the best price and quickest turn around.
We’d love to hear other techniques you are using or other topics you’d like us to answer related to metal trading. Email us at Brendon@globemetal.com