How to Determine the Price of Your Scrap Metal
Knowing what your scrap metal is worth can earn you a higher profit when negotiating with buyers, but finding out scrap metal prices isn’t as easy as it sounds.
You can Google phrases like “scrap metal price near me,” “scrap metal price today,” or “scrap metal price car,” and still be wrong about the true worth of your metal.
One thing you should know is that several factors affect your final scrap metal price.
We’ll divide them into four points.
2. Economic factors.
3. Expenses of the seller (you).
4. Expenses of the buyer (scrap dealers).
Let’s take a look at how these factors affect scrap metal prices and what you can do to keep up with them and get the most out of your wares.
Before learning about anything else, you need to learn to identify your metals.
Not only does it help you accurately calculate your scrap metal’s price, but it also helps you to identify metals where others might see nothing of value. To know how to identify metals, you’ll need to:
1. Learn all about metals:
You’ll need to learn how metals look, how they feel, and what components make them what they are.
You can start by reading up descriptions of them and then actively identifying them when you go on your next scrap hunt.
2. Learn a few metal identification techniques:
No matter how much you study, you might come across some alloy that might stump you.
If that happens, you’ll need to have a backup plan, and learning a few metal identification tricks might be it.
3. Buy a tool:
To make things a bit easier on yourself, you can buy a tool to help you with metal identification.
Yes, there are handheld tools to help you identify metals, and they can even detect the components of an alloy and trace impurities.
In learning how to determine scrap metal prices, you cannot underestimate the economic forces.
Metal is a commodity just like any other, and it is subject to the same effects.
This is why scrap metal prices are not constant. They rise and fall like any other commodity.
Here are a few ways you can keep up with the economy of scrap.
1. Keep an eye out:
The internet might not be the most reliable source of information on metal prices because of other factors. But, it can give you a general baseline to decide what your metal is worth.
You could also subscribe to a publication that’ll give you updated news on scrap metal prices at constant intervals.
2. Learn what affects scrap metal prices:
You might need to undergo a bit of an education here.
But it’s absolutely necessary if you want to learn how to calculate scrap metal prices.
Read up on what kind of happenings and situations affect metal prices.
You’ll learn stuff like why some metals are demanded more in the summer, and some are required in the winter, why oil price changes also affect scrap metal prices, market demand, industry demand, etc.
3. Economies of scale:
Economies of scale are the reason why it’s better to bring a massive haul to your scrap dealers rather than a few bits.
By selling in bulk, you make more money, and the dealer can then sell your haul piece by piece to make his own profit.
Expenses of the seller
The dealer might not care about the expenses incurred in procuring and transporting your metal, but I bet you do. Here are a few processes that you’ll have to take care of:
You’ll have to journey to a lot of places to get the amount of scrap metal that’ll bring you a sizeable profit. Transporting your heap to the scrap yard for inspection and sale is also your responsibility.
Sorting the metal by type (ferrous and non-ferrous) and specification is also your job.
Prices of scrap metals are affected by how clean they are.
This means that you should have a method of cleaning off dirty metal before taking to the dealer.
You should calculate the prices of your metals while also factoring in the overhead expenses.
Expenses of the dealer
However, dealers have their own circumstances as well.
Not all dealers can pay the same rate, and there are reasons for that.
Here are some of the factors that might change the dealer’s pricing:
If the dealer’s yard is far from the closest recycling plant, he will have to bear the transportation costs. Location is also essential because a metal that’s scarce in one area might be plentiful in another.
2. Cleanliness and organization:
The cleaner and more organized your metals are, the more the dealer is likely to pay. This is because you’ve saved him the time and effort of performing those tasks.
3. Demand and supply:
If you find some scrap metal that has a heavy demand, the dealer will be willing to pay you more when negotiating. If you bring common metal, he might offer lower prices.
Scrap metal prices are always changing. But if you manage to keep up with the current market trends, add your expenses and consider that of your buyer, you’ll be able to determine what you should be getting per haul accurately.
This allows you to focus on getting the best quality scrap metal you can.