Tom here. We’re going to be answering all of the questions that we’ve been asked over the last couple of weeks, just going over many different things. Hopefully, We will help you learn more about making more money and might even give you some ideas on questions that you didn’t know you had in your head that you want to be answered. So without further ado, let’s start with our first question.
Do newer catalytic converters have more precious metals inside, so they are worth more money in scrap?
“So that’s a great question. And when we look at the answer, you know, many of the newer catalytic converters have higher emission standards that were placed on them from whatever presidential administration was there. So, we know that California has really high emissions, and multiple other states have adopted those policies, which have caused auto manufacturers to make catalytic converters for different states worth more money. Now, older cars have a higher probability typically because the catalytic converter has been used more. There are more miles, and of course, nothing is made to last forever, regardless of what people tell you.
So the catalytic converters, over time, could slowly have the precious metals worn away. Think about a year you’re driving a scrap vehicle you’re going over bumpy roads, things could get broken, something could happen to your engine, you could have a minor fender bender, the cat could break a little bit, and you never know because you don’t hear the rattling. So while older catalytic converters have excellent value, newer ones also have solid value. And of course, by working with RRCats.com, you’ll always make more money with your catalytic converters by working with a United States-based company”
When scrapping Optical cable…is it just trash?
“Anytime you see a wire that has the word ‘optical’ written on the side, you have a 99.99% chance that you’re dealing with nothing but plastic. Telecommunications companies can move bandwidth for the internet through these optical lines. And a lot of phone companies are actually able to use them for their phone connections. But they look like a wire; they taste like wire, they smell like wire, but they have no copper inside them. So it really is almost another fool’s copper, if you will. So when you look at it, you definitely want to make sure that you read it because if it says optical on it, you don’t want it. It could be black, orange (orange is a really big one), or even blue. So the two different words that you really want to look out for are the words fiber and the word optic, or optical because that’s going give you a good indication that you’re dealing with plastic with no copper inside.”
Are copper prices going to drop soon? I was told they would.
“So this was asked in May of 2021. And listen, if I knew what the markets were going to do moving forward, I would be doing this podcast from my own private booth on my own private island. But I’m not, because I can’t predict the future. I do think, though, that with the way that things are going politically, that we have a solid chance of seeing copper staying strong for the next few months of 2021 and the next few years, especially if we have some infrastructure plans put into place because of further development in different cell phone services, like 6G. We also have the electric vehicle market in the works. So that could certainly lead to a massive demand for copper, and the supply would not be in a perfect place.”
How about old flywheels, clutches, brake rotors, and hubs? Do they have any scrap value?
“Now those are generally considered prepared #1 steel prices. However, it could range depending on where the markets are. But if you have a lot of those items, you definitely should separate them. Something to think about are the brake pads could have that extra padding on there, which is steel, and they’re a little lower in value.
But if you have a lot of these smaller items, heavy rotors, springs, and hubs, you should be able to get a #1 steel for them at any scrap yard you go to, unless it’s a yard that’s primarily nonferrous focused. And we know a lot of companies and a lot of people across the country that only do nonferrous so that you might have a problem there. So hopefully that helps you out.”
Hey Tom, do you foresee when scrappers will need a local government permit to scrap? Will scrap yards have to report funds paid to scrappers for tax purposes? Will scrappers have to file taxes for their sales? Should scrappers form LLCs?
“Now we’ve taken this extremely tough topic to talk about, we’ve made it into a bunch of other podcasts, as well as different articles online. So I’m going to try to make this a little easier. As of right now, I haven’t heard of any scrapping permit in any of the 50 states. That’s not to say that they won’t come. But there have been restrictions on catalytic converter sales, where you have to have a copy of the title to sell the cat. I’ve heard about air conditioning units only been allowed to be sold to scrap yards from HVAC vendors.
But right now, I don’t see that there’s going to be any scrapping permit. Now, long-term taxes – Well, listen, the government continues to print more money and raise the national debt in a way that we’ve never seen before. For the last 80-90 years, the United States has had debt by just creating more money. So do I see scrap yards getting affected in the future with taxes for individuals? Unfortunately, the answer is yes.
Because if you look at it from the side of a government point of view, a lot of the cash is not reported. And unfortunately, that’s an area that they’ll be able to go and target. Now it’s going to be really complicated because what scrapper in their right mind will start giving out their social security numbers. And you have local, federal, and state legislation that will work on these things, as well as different lobbyists trying to push away from this.”
Since you mentioned consistency, do you or other scrap yards give regular customers better prices? For example, I might not bring in 1,000 pounds of copper at once, but if I bring in 100 pounds a month over the course of a year, will I get more money?
“At Rockaway Recycling, we do have tier prices for customers that are consistent sellers. So it gives us the ability to reward them for their loyalty and consistency while giving us large customers that might bring in 5,000 or 6,000 pounds of copper 5-10 cents extra per pound because of the volume. And when you generally have volume, it gives you the ability to dictate your prices a little differently. So that’s certainly something to think about. But working with a scrap yard consistently, we always recommend before asking for more money, ask them for a printout of your last 3, 6, or 12 months of tickets, so you can show the consistency that you’ve had. And if you’re able to really sort and separate your material really well, that’s only a stronger point to help you make more money with your scrap.”
How much is a water heater worth in scrap value? I have to replace my heater. I’m wondering if the old ones worth anything to sell for scrap? Is anyone going to pick it up if I put it on the road, or is it just not worth it?
“So water heaters absolutely have value. Water heaters are generally going to go as a light iron. Some scrap yards, like my yard in Rockaway, New Jersey, are not heavy steel buyers. I don’t mean heavy or light steel; we don’t do much steel; we do more nonferrous here. So we would buy water heaters as a light iron, sometimes we buy them per piece. And that’s because of the insulation that’s inside of them.
Now things that you do want to look for – some of the older water heaters that are 25 years old, built in the 1980s or earlier, believe it or not, they’re still around, and they exist, they could have large copper heating coils inside, which are really good to take apart. Most of those units are generally blue on the outside, where your traditional water heater is an ugly white or an off-color gray.”
Why are copper prices in Kentucky lower than places like Texas and New Jersey, where you are? Our Bare Bright is $2.60/lb.
“At the time that he wrote this in April, we saw Bare Bright at $2.60 a pound, and we saw on a national average, about 50-60 cents higher. So a couple of real quick answers that we’ve given many times, number one: your scrap yard might not get aggressive, and they might keep their prices lower, so they have higher profits. It also could be a small yard that doesn’t move material often and does not get high prices.
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I know a few yards like this, where they always save 40,000 pounds of copper to sell at one time. I know some yards that buy 40,000 pounds a week. I know some yards up by 40,000 pounds a month. I know some yards up by 40,000 pounds over three months, depending on their size. So pricing really relies on the size of the yard, and really how aggressive they want to be if they’re looking to grow, stay stagnant, or kind of stay, you know, in a lower position because they want those higher profit margins.”
Is it better to go to a small town scrap yard or scrap yard with multiple locations?
“And this again is a level of comfort and level material that you’re selling. Smaller yards generally have that one-on-one approach. They know your name, and they remember you. You’re dealing with the same two or three scale operators, wherein larger yards you might be dealing with the same scale operators. But what you’re not dealing with is the same owner of the company, you know, you have a company that as 6, 10, 15 yards, you’re not going to really be able to reach out to the owner or upper management as easy as you would some of the smaller yards.
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Rockaway Recycling is locally-owned in our yard; we only have one location as of 2021; who knows, going into the future. But we have really great relationship with our customers, and we really want them to make more money with their scrap. So it gives us the ability to pay them a little more and be a little more aggressive in that manner.
Now, scrappers, these are just some of the many questions that we get asked all of the time. If we answered a question that you didn’t even know about just now, by all means, ask us more questions so we can continue to push the narrative to help you learn more about the industry. And by tuning into the iScrap App, whether it’s becoming a supporter on Patreon or subscribing to our podcast through Spotify or Apple, our goal is to teach you as much as we can so you can better succeed. So if you have questions that you want us to answer that your scrap yard won’t answer, that people through our online forums haven’t been able to help you with, ask us the questions successfully, and we’ll get them to you.”
Is the metal alloy from copper transformers worth more than regular scrap steel?
“So we’ve done a couple of videos and blogs on taking transformers apart. And the outside of the transformer, of course, is going to be steel. And then, once you get into it, the windings themselves are either copper or aluminum. But underneath those windings, if you’re taking apart larger units, I’m not talking about light ballasts to the smaller transformers. Still, I’m talking about larger ones that would actually be used to move electrical current in a building or something like that- that steel is called silicon bushing.
And to get a premium price from your yard, you generally need 5,000-10,000 pounds, and you should probably be working with a yard that has a little bigger steel volume because when you go to sell them something like the bushing, that’s not a phrase that they’re going to hear very often from scrappers. So you want to make sure that you know what you’re talking about. And of course, if you have questions on the material, send us pictures through our social sites or [email protected]; we’ll help you with that.”
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