Buying and Selling Scrap Metal

Ferrous Processing & Trading

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).

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

Understanding the Ferrous Scrap Market

Players in the Scrap Market (contd) 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

Understanding the Ferrous Scrap Market

Players in the Scrap Market (contd) 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

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

Scrap Grades
Stamping Offal Produced by stamping and blanking operations

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 #1 Shredded Clips from Offsite Shredding Operations

RamPress Wafers from Onsite RamPress Operation

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

Scrap Grades
Obsolete Scrap Grades

Miscellaneous Unprepared (Tearouts, demolition, etc)

Scrapped Autos

#2 Shredded Auto Scrap (Fragmentized)

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