Collecting Scrap Metal for Profit
How to Be a Scrap Metal Collector
When the metal products we use in our everyday lives are no longer useful, they are either discarded or recycled for use in other products or projects. Because metal is a resource that can be recycled over and over without any loss in quality, recycled materials are just as useful to manufacturers and builders as freshly mined and forged metals. Thanks to this element’s unique trait, collecting scrap metal for profit is a common—and sometimes profitable—endeavor.
The Difference Between Ferrous and Nonferrous Metals
Before you start collecting scrap metal for profit, it's important to know the difference between ferrous and nonferrous metals. The distinction between the two is the presence of iron. Ferrous metal is magnetic and contains iron, which makes it stronger than its counterpart, while nonferrous metal is more pliable and resistant to corrosion.
Typical ferrous scrap items submitted for recycling include things such as old machinery, stoves, refrigerators, freezers, and automobile engines. Nonferrous metal recyclables, meanwhile, typically come from copper wire and piping, brass fixtures, aluminum siding, chairs, and old computers. The following breakdown lists which category different types of metals fall into.
- Alloy steel
- Stainless steel
- Carbon steel
- Wrought iron
- Cast iron
Getting Into Scrap Metal Collection
After learning to recognize various types of scrap metal, it's useful to become acquainted with local scrap yards and their personnel. By building relationships with local dealers, you will get a better understanding of material grades and identification, along with pricing and other opportunities.
The closest dealer may not be your best bet. Some dealers, for example, may not deal with entry-level collectors, or may only take certain types of metals. There are also other considerations such as price paid, and whether payment is by cash or check. It’s also useful to understand how scrap metal pricing works. Pricing tends to fluctuate with daily marketplace activities, so keeping current on pricing trends is important.
There are a number of ways to stay up to date with the latest metal prices. iScrap is a free app you can download that contains a directory of local scrap yards across the United States and Canada. It also provides user-uploaded updates of local prices, along with scrap metal price trend information on its blog. Another good resource is Metalary, a site that is frequently updated with the latest pricing information.
Declines in the Price of Scrap Metal Recycling
Although scrap metal collection has been profitable in the past, the price of metals has declined sharply since the mid-to-late 2000s. After weathering a rough period following the 2008 financial crisis and enduring tougher market conditions in 2015, the metal industry struggled the most in 2019.
In 2019 specifically, various types of recycled aluminum reached a 30-year low. The restrictions placed by China on importing recyclables from the United States in May 2018, coupled with the steel and aluminum tariffs imposed on Chinese imports by President Trump in June 2018, compounded the effect of the earlier downturns.
Likewise, the retaliatory tariffs from China—which is one of the biggest importers of the scrap metal produced in the United States—have had an unfavorable impact on the metal industry, leaving the U.S. with a surplus of metal. While the surplus has resulted in lower prices for manufacturers purchasing metals such as aluminum for production, it has driven down the rates and demand for scrap metal recycling.
Where to Find Scrap Metal
Determine where your best opportunities are for finding scrap and develop collection routes. This may include small businesses, auto repair shops, demolition sites, plumbing businesses, and residential collection. If you find businesses that regularly generate scrap, you may wish to create a route that would include periodic pickup. It may be worth your while to arrange to drop a bin at a business to accumulate scrap.
You can also put the word out locally for scrap pickup on places like Facebook Marketplace and Craiglist or through apps like OfferUp and LetGo. Likewise, be on the lookout for posts from other users on those platforms looking to unload inoperable cars or old, nonworking washing machines, dryers, dishwashers, and other appliances. Garage sales, thrift stores, estate sales, auctions, and flea markets are also good places to look for old brass lamps or other metal items.
How Recycling Is Beneficial for the Environment
Although recycling may not currently be as profitable as it once was, there are still plenty of upsides to collecting scrap metal for recycling. One of the main benefits of recycling is that it helps keep unused items from landfills and lessens the need to mine and process new metals, which preserves resources.
Recycling metals like aluminum, for instance, requires 95% less energy than it does to produce it from raw materials. It also reduces the metal industry's carbon footprint. In 2013, the Environmental Protection Agency estimated that recycling prevented around 186 million metric tons of carbon-dioxide-equivalent gasses from being released into the atmosphere. That was the equivalent of keeping 39 million vehicles parked for a year.