How To Make Money in the Scrap Metal Industry

May 26, 2022

The scrap metal industry has been around for many years. It is a multi-billion dollar industry that employs thousands of people in the United States alone.

The industry consists of three major parts: recycling, processing, and manufacturing.

The recycling aspect of the scrap metal industry is the most visible. It includes taking apart old cars, appliances, and other items to extract usable metals like copper or aluminium before they are thrown away. The scrap metal prices depend on what type of metal is being recycled and where it is being processed.

Processing involves melting down recycled metals to be used in new products like cars or cellphones. Manufacturing includes making new products from raw materials like steel or aluminium by using a furnace or rolling mill to shape them into desired forms such as sheets or pipes.

How to Profit in the Scrap Metal Industry

The scrap metal industry has been booming in the past few years. The prices of scrap metals have been increasing and this is a great opportunity for those who want to make profit from it. The price of scrap metal is determined by the supply and demand of the market. The more people there are who need scrap metal, the higher its price will be. If you want to profit from this industry, then you need to buy low and sell high.

It is important to know the current commodity prices of different scrap metals and grades, so you can make a profit. The prices of scrap metal fluctuate throughout the year, but they are generally higher in the summer. The price of scrap metals can also be affected by geopolitical tensions and trade agreements or conflicts as we are currently seeing in Europe.

Scrapping is an integral part of the global economy and provides a way to recycle valuable materials that would otherwise be thrown away. The use of scrap metal in manufacturing has also grown steadily over time, as it is an affordable and convenient way to recycle valuable metals, such as steel. 

3 Key Factors That Affect Scrap Metal Prices

1. Supply vs Demand

As with most industries, demand and supply are the two biggest factors that drive changes in scrap metal pricing. Heavy industry, manufacturing and construction are three of the main buyers of scrap metal. When these industries are growing, so too does the demand for scrap metal which generally sees price escalations. However, the type of metals these industries are requiring isn’t always the same and some metals may still have low demand, even when these businesses are booming.

2. Seasonality

Scrap metal prices tend to be higher in warmer months due to an increase in construction work capitalising on the good weather and extended daylight hours. This pushes the demand for scrap metals up, which also pushes prices up. Many scrap peddlers will collect their metal inventory during winter, and strategically sell it to scrap metal yards in summer to make the most of the higher prices.

3. Metal Type and Grade

Most scrap yards will have technology in place to be able to quickly test the quality of scrap metal being offered for purchase. These devices can quickly uncover key data about a scrap sample which will have an impact on the price being offered. Some scrap metal yards also fluctuate their offer price based on volumes and quantities, with a premium being paid for higher volumes. This is because the overhead cost of processing one large purchase, compared to several smaller purchases, is lower, bringing the overall cost of the metal down.

The Top 10 Industries that Buy Scrap Metal

1) Automobile Industry: The automobile industry is the largest consumer of scrap metal in the world. It recycles a lot of its own scrap byproducts, but also purchases scrap metal from other industries as well.

2) Construction Industry: The construction industry uses a lot of metals such as steel and copper on building sites, so it often buys scrap metal to use for new projects or to recycle old ones.

3) Manufacturing Industry: Manufacturing companies buy scrap metal for use in their factories because it’s cheaper than buying new metal. 

4) Mining Industry: The mining industry is a major user of scrap metal because it needs metals for machinery and equipment.

5) Oil and Gas Industry: The oil and gas industry uses a lot of steel and other metals in its pipelines and other infrastructure.

6) Power Industry: The power industry uses a lot of metals such as copper, steel, and aluminium in power plants and transmission lines. 

7) Railway Industry: The railway industry uses a lot of steel in its tracks and infrastructure. 

8) Shipbuilding Industry: The shipbuilding industry uses a lot of steel and other metals in the construction of new ships. 

9) Telecommunications Industry: The telecommunications industry uses a lot of copper in its infrastructure. 

10) Waste Management Industry: The waste management industry uses a lot of metals in its recycling facilities.

The Importance of Good Systems for Scrap Metal Traders

The recycling of metals plays a very important role in today's society. Not only does it help to reduce the amount of waste that is sent to landfill sites, but it also helps to conserve valuable resources and save energy. In order to be able to recycle metals effectively, there are a number of processes and technologies that can be used to ensure your scrap yard is running at optimal efficiency.

Scale & Weighbridge Technology

One of the most important pieces of equipment in any scrap yard is a good quality scale. This is because all transactions within the yard need to be accurately weighed in order to comply with government regulations. In addition to this, a weighbridge can also be used to weigh vehicles before they enter the yard, which can save a lot of time and effort processing larger transactions.

Cameras and Scanners

Another important piece of equipment that is often used in scrap yards is a camera or scanner. This is because it can be used to quickly and easily identify sellers' vehicles as well as the different types of metals that are present in their piles. This information can then be used to give you an accurate price for the scrap metal.

Data Management Systems

In order to keep track of all the different transactions that take place within your scrap yard, it is important to have a good data management system in place. This can be used to store all of the relevant information about each purchase and sale, including the weight, type of metal and date. This information can then be used to generate reports which can be used to improve the efficiency of your yard and also comply with local and state-based reporting requirements.

ERP for Scrap Metal Recyclers

An ERP system (enterprise resource planning) can be used to manage all the different processes that take place within your scrap metal recycling business. This includes managing customer orders, tracking inventory levels, managing finances and much more. An ERP system, like WeighPay can save you a lot of time and money by streamlining all of the different processes that take place within your business. WeighPay also integrates with the systems mentioned above, giving you a single platform to manage all hardware and software with full data transparency.

In Summary

The scrap metal industry is a very important part of the recycling industry. By using the right systems and equipment, you can ensure that your scrap yard is running at optimal efficiency. This will save you time and money, and help to reduce the amount of waste that is sent to landfill sites, further strengthening the circular economy.

WeighPay is an enterprise level hybrid cloud platform that offers Scrap Yards a modern ecosystem of technology to ensure your business is running efficiently, your team is working smart and that your business can grow without an increase in resources and overheads. 

Whether you are a small scrap yard, or global enterprise, WeighPay will revolutionize the way you manage your business. To learn more, reach out to our team of experts. 

Check Out The Latest From Our Blog

Benefits of Investing in a Waste Management Platform

March 5, 2023
When it comes to managing waste, there are many benefits to investing in a waste management platform. Waste management platforms help businesses keep track of their inbound waste and recycled inventory more effectively.
Read More

How Technology is Changing the Waste Management Industry, and Supporting the Circular Economy

March 5, 2023
It is no secret that technology has had a profound impact on virtually every industry in the world. The waste management industry is no exception. In this blog post, we will discuss how technology has changed the waste management industry and what the future holds for this field.
Read More

Top 5 Process Automations Your Waste Management Facility Should Implement

March 5, 2023
Running a waste management facility is a difficult task. It's important to make sure that everything is running as smoothly as possible, and that means automating certain processes. In this blog post, we will discuss the top 5 process automations your waste management facility should implement.
Read More

How WeighPay Supports More Efficient Scrap Yard Management

March 5, 2023
WeighPay is a Scrap Metal Recycling Software that makes scrap yard management more efficient. By digitizing scrap yard operations, WeighPay reduces the time and labor needed to manage scrap yards. This allows scrap yard managers to focus on other tasks, such as sorting materials and preparing them for recycling rather than spending time on manual administration and paperwork.
Read More

Working with Scrap Metal, Waste Management and Recycling CIOs to Drive Operational Efficiency

July 21, 2022
Senior executives in the waste and recycling industries are driven by the prospect of creating a sustainable future. Technology is one of the most under-utilized mechanisms to exact positive change with the goal of increasing operational efficiency. This means that modern IT solutions are needed to improve processes and create systems and processes to drive operational efficiency and profitability, as well as growth within a scrap metal, waste or recycling company.
Read More

The Top 5 Benefits of Using WeighPay's Waste Management Software

July 8, 2022
It is well known that the waste management industry has several unique challenges. It's regulated and closely scrutinized but also crucial to our economy and planet. As a result, waste management companies constantly look for ways to improve their processes and reduce costs while complying with strict regulations.
Read More

How To Make Money in the Scrap Metal Industry

June 23, 2022
The scrap metal industry has been around for many years. It is a multi-billion dollar industry that employs thousands of people in the United States alone. The industry consists of three major parts: recycling, processing, and manufacturing.
Read More

Waste Management Software: How to Cut Costs and Increase Efficiency

June 23, 2022
As the world becomes more industrialized, the amount of waste produced each year continues to increase. A recent World Bank Report predicts that by 2025, the world will produce over 6 Billion tons of waste every day. With this increase in waste comes an increase in the need for efficient waste management.
Read More

ISRI Convention 2022

June 23, 2022
The Institute of Scrap Recycling Convention is the Scrap Recycling Industry's largest trade show, featuring more than 500 exhibitors and attracting more than 25,000 attendees from around the globe. The convention is the place to see the latest recycling equipment and technology, learn about the latest industry trends, and network with fellow recyclers.
Read More

Common Problems for Scrap Yard Owners That Are Solved By Scrap Software

April 12, 2022
Running a scrap yard can be difficult, especially if you don't have the right tools. Luckily, scrap software can help make the process a lot easier. In this blog post, we will discuss some of the common problems that scrap yard owners face and how scrap software can help solve them.
Read More

$350 Million Up For Grabs in Unclaimed Bottle Deposits

March 7, 2022
Californians pay an additional nickel or dime every time they buy a can of soda or a bottle of beer. This deposit can be returned to the recycling center. The California Bottle Bill was first introduced as a bill in the state of Oregon back in 1971. It passed and became law on March 8, 1972. The Bottle Bill's objective is to increase recycling which will reduce litter, landfill and improve water quality.
Read More

Top 5 Benefits of Hybrid Cloud Solutions for the Scrap Metal, Waste Management and Recycling Industries

December 22, 2021
Many organizations in the waste management and recycling industry have both cloud and on premise solutions in place. Whilst there are advantages and disadvantages to both, hybrid cloud offers clients the best of both worlds.
Read More

End of Year Release 2021 - Newsletter

December 15, 2021
WeighPay continues to lead the recycling industry by delivering the most advance technologies possible. Our latest releases are a solid example of how our engeering team is staying ahead of the competition.
Read More

WeighPay aims at replacing SAI, RECY-AMCS, and Shared Logic with its robust and affordable cloud solution.

December 8, 2021
ATTN: This is our top 20 prospect list for 2021. We are building the industry's first true cloud ERP (with offline mode) to address the needs and wants of the largest scrap metal companies in the US to replace the outdated on-premise solutions like SAI, Recy, and Shared Logic.
Read More

WeighPay for Landfills and Transfer Stations

December 8, 2021
Commodity-based businesses require dedicated solutions to meet their complex needs, landfills and transfer stations are no exceptions. As technology continues to evolve, more and more of these needs can be filled through cloud-based applications that allow for data to be managed anywhere, from any device.
Read More

How Weighbridge Scale Software Revolutionizes the Waste Management and Scrap Metal Industries

December 8, 2021
For companies in the waste management and scrap metal industries, weight is a critical concern. Not only does it allow companies to track the amount of weight collected, but it also ensures that it is properly routed and disposed of while creating points of differentiation between competitors.
Read More

Top 5 Reasons your Scrap Yard should look into WeighPay

November 29, 2021
For companies within the scrap metal industry, compliance is essential for businesses to function. With metal theft a problem continually faced by the industry, every US state has implemented laws requiring scrap metal dealers to record information on deals such as seller image, items, vehicles, etc. to reduce the prevalence. It is essential that this information is properly recorded and stored so that companies can easily meet compliance requirements. WeighPay's unified solution simplifies the process of managing this information.
Read More

Eliminating Version Lock

November 29, 2021
ERP (Enterprise Resource Planning) version lock can be seriously debilitating to a business. Getting stuck in version lock means your business or enterprise has reached such an extensive point in the customization of your software that it will break down when an update becomes available; thereby leaving you behind at a former version of the software.
Read More

WeighPay Delivers Compliance Solutions for the Scrap Metal Industry

November 29, 2021
For companies within the scrap metal industry, compliance is essential for businesses to function. With metal theft a problem continually faced by the industry, every US state has implemented laws requiring scrap metal dealers to record information on deals such as seller image, items, vehicles, etc. to reduce the prevalence. It is essential that this information is properly recorded and stored so that companies can easily meet compliance requirements. WeighPay's unified solution simplifies the process of managing this information.
Read More