Common Questions About Scrap Prices
Since opening iScrap back in 2010, we have been asked all types of questions including:
- Why doesn’t my local scrap yard have the same prices I see online?
- Why don’t scrap yards pay the same price I see on iScrap?
These are all great questions and we are going to dive into why prices online on iScrap are different than your scrap yard.
The iScrap was founded by a scrap yard owner who is looking to create more transparency in an industry usually very hush-hush about prices. Originally a lot of the prices that were posted were off of our founder’s scrap yard, combined with Local and National price knowledge. Over the years, as the internet has made more information more accessible, we have been able to use multiple price ranges reporting prices from across the United States and Canada to create the National Price Averages that are listed through the iScrap App.
Where Do Scrap Prices Come From?
While you always see dozens of prices, in different materials updated daily knowing where these prices come from very important. Since 2017, when scrappers began posting some of the prices they received from their local scrap yards online, we’ve been able to take that information compiled in spreadsheets to help create National Price Averages. On top of that, the team at the iScrap App has been able to work with other scrap yards to learn more about their prices in different markets throughout the country as well. Scrap yards generally look to the internet to learn about the markets including where copper prices and iron ore prices are trading at.
Suggested Reading: Factors That Determine Scrap Prices
Our goal at iScrap is to interpret what the markets are doing and translate into realistic scrap price ranges you will find at your local yards.
Compare It To Gasoline Prices for Your Cars
Things that you’ll see through the commodities trading world might be pricing on crude oil. The actual price per gallon for gas is not a traded number so it makes it much more difficult to understand the relation from price per gallon to the trading prices. If you take that comparison of gas prices per gallon and you apply it to the scrap market it gives you a better idea where a lot of the national price scrap averages come from.
Suggested Reading: Why Do Oil Prices Affect Scrap Prices?
How Are Scrap Prices Determined?
All companies have a profit margin that they are comfortable with and that they need to be able to have to pay for their overhead. Once you have that basic idea, you’ll be able to move onto the next step to help to figure out how scrap prices are determined. There are larger scrapyards or suppliers that look to buy from smaller scrapyards or even medium-size companies. Those larger companies, mills or furnaces use the global trading numbers to base their prices.
Most of the prices is based on the recovery of precious metals whether it be copper or Lead or any other types of materials. Those recovery percentages help determine the prices of all the different scrap and how different scrap yards are able to start to set their own prices scrappers at the door.
How Scrap Yards Choose Their Prices & What Materials To Buy
Some scrap yards do not buy all materials, while other scrap yards tend to buy anything and everything under the sun. There are multiple reasons why different scrap yards choose or don’t choose to buy different materials. We want to be able to go over some of the different reasons to give you a better idea and learn about different things.
Size of Property
The size of the property that your scrap yard is located on is one of the biggest factors on why they will or will not buy different materials. Some scrap yards operate out of buildings and do not have any outdoor space which would limit their ability to buy steel, process cars, or have any type of larger ferrous operations. Larger operations generally need more space for more equipment and that gives them the ability to buy bulkier items.
There are some towns that do not allow certain work permits so some scrap yards do not have the ability to have large operations. There are also different legal requirements inside of different municipalities both local and state-run that could limit different scrap yards from doing different things.
On top of those different restrictions, there are also different other legal restrictions about permits, applications, recordkeeping, and dozens of other things that restrict scrap yards from doing all types of recycling and instead only focusing on one or two different types.
We hope this gives you a better idea of how scrap yards operate and where some prices come from. This can be helpful to determine where you should sell your scrap and who you should sell your scrap to. We implore you to continue to follow the National Price Page Averages while learning about the scrap market.