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pricing

How Scrap Metal Pricing Works

Scrap metal pricing can be mystifying to many scrappers, especially those new to the industry. The truth is rather complicated, but less difficult to grasp than you might think. Knowing a bit more about how scrap prices work can help you get the most for your scrap!

Supply and Demand

The biggest factors affecting scrap metal prices are supply and demand. When more businesses need recycled metal, demand goes up, which drives prices up. When there is more scrap metal on the market than is needed, the supply is too high for prices to rise.

The best time to sell scrap metal is when there is a high demand for it and a low supply generally on the market. If you check scrap metal spot prices regularly, you can see trends, and notice when the market for certain metals goes up or down.

Of course, the thing that makes this difficult is that the supply and demand of one metal fluctuate without much influence from the supply and demand of other metals. The price of copper and the price of stainless steel aren’t necessarily closely related to one another.

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How Does a Scrap Yard Decide the Price of Your Scrap Metal?

How Does a Scrap Yard Decide How to Price Your Scrap Metal?

Like any industry, the scrap metal business can be hard to understand for outsiders. However, even many frequent scrappers (and some who do it as a full-time job) don’t know exactly how recyclers price scrap metal.

The reason for this is simple: determining the value of a given piece of scrap metal is complicated. Furthermore, scrap yards are often taking a gamble when they purchase scrap—especially if that scrap is dirty or corroded, or if it is a material they do not immediately recognize.

Although there are perhaps hundreds of tiny factors that go into determining the price of a given load of scrap metal, the two major factors are these: the value of the scrap and the risk the scrap yard is taking. A higher material value and lower risk mean more money for you.

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