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.