How much profit do the scrap yards make per pound?

Ive been selling mostly P & S to a yard that is famiy owned because they are smaller and easier to deal with. There are 2 other yards within a mile drive and both of the smaller yards sell to the one big yard. Last weekend i checked prices at all 3 yards and they were all the same, so i used the small yard like normal. On my way to the yard it was 730 in the morning before the yard opened and i saw the family yard i use hauling their dumpster full to the big yard. My question is if they paid me 13.00 per hundred what do they make when they sell to the big yard? It has to be enough to want to deal with 100 different people and to sort and move around before they sell.




Mike

I've always wondered too. For instance, if my yard pays me $2.80 lb for #2 copper, what do they sell it for to the bigger guys? I would think it would have to be at least twice as much because I can't see them paying me $2.80 and them only getting $3.50 a lb for it. Or something along those lines.

The profit margins are a lot smaller than you may think. When I was running a yard last summer we made about. .50-.70 cents on copper and $50 a ton on sheet metal.

Well i have just sold my intrest in a yard located in South Florida I have a non compete so i am getting into the E-waste end of the Industry.I CAN TELL YOU THAT THE MARGAINS ARE NOT AS BIG AS YOU THINK,We do a large volume and if we make 40-50- a ton on shredabile we were doing good Copper is not realy a money maker 20-30 cents a lb is great the money is in the blind iteams electric motors,compressors stainless is ok also the money is made when loads are droped off as shred and thy leave the motors wires and miss non ferrous attached.

Yea it's mainly the quantity they can turn over is how they will make there money.. They probably have a deal with the bigger yard on large lots of scrap..

I usually make anywhere from 10% (shred) to 30% on material that I do not process. smaller yards usually make a better percentage than larger ones...but larger yards move such high quantities they make more overall. It is very tricky running a yard, some customers will scam you,prices drop in the market and you are left "holding the bag", and you have to properly evaluate material that is being brought in. This is a very,very competitive business.

I live next to a large scrap yard.
I talked to the owner one day and asked why they didnt pay more for scrap. (competion was 10-20 higher per ton)
His answer was great.
They don't want to work that hard and they set a goal of 200,000 tons per year.
Any more than that and trucking becomes a problem.
They are currently building a rail spur to load onto trains.
Hopefully that increases the price.

Our margin on copper is relatively thin (5-10%)--Probably move 250,000 lbs in a good year (we are a small yard). Fortunately, our good cash flow position over the years has given us the ability to speculate on cu. In other words, we try to buy alot when comex is low and sit on it until the markets improve. Many yards don't play around with this as you can get burned. But if played correctly--our margins can improve to 10-15%. That's the plan anyway... Sometimes it isn't that easy. When comex is high we buy and turn red metals as fast as possible.

Someone mentioned it earlier... the wide-margins are in some of the non-sexy items (motors, sealed units, insulated wire, batteries and lead, coils, stainless and scrap iron-(for us anyway).

Volume is essential for the larger yards (where margins are smaller) but we try to find a good balance between volume and margins. It costs a lot money to be a high-volume yard (Eqpmnt, labor, supplies). It's not easy work running/owning a yard... I see these yards popping up everywhere now and I wonder if they know what they are getting themselves into. Good luck everyone!

Non sexy items I love it can we add torch material to this list of non sexy items. 50 dollars a ton for scrap steel is typical when you are talking about shred material and prepared iron. Most people don't consider shipping cost, labor, huge diesel chugging material handlers, crazy insurance and workers comp, Salesman account bonuses, keeping the lights on, upkeep on trucks, etc. All of that is figured into the cost of there buying price and whoever they can sell it to for the highest price. Keeping processing prices as low as possible is the aim of every yard. Turn around has to be lightning fast in order to bust off that huge profit.

Quota, premiums and penalty’s creates competition among smaller yards unless they have a monopoly in your neighbourhood.

Quota is one reason yards are willing to up the price for incoming volume over the guy only bringing in a couple hundred pounds of copper or aluminium. It assures the yard owner will meet his quota.

In another lifetime hauling scrap cars I formed a union with several other haulers upping the tonnage we brought in under a common name enabling the group to benefit on premium pricing.

If you have the space to store wrecks you'll get paid premium prices from the guys who make the circuit doing the crush, plus you save on fuel by marshaling your inventory. When I had my yard in BC, we relied on the non ferrous to keep bread on the table, this material I would haul into Vancouver once a month while waiting for the crusher to make his yearly appearance.

With each monthly or bi monthly haul of non ferrous i would have enough material to get my premium pricing. So you really dont have to haul serious tonnage daily to get this price, yards owners form bonds with regular guys who bring in tonnage, speak a different language. Yards seldom cheat if at all the heavy hauler.

Prices are all over the board within a few miles from me. For example, $0.40 to $1.10 for #2 insulated. The place that pays $0.40 pays on the spot which is why it is so cheap. I don't know how they get away with it...they're not a new yard.

Originally Posted by rawresale

Prices are all over the board within a few miles from me. For example, $0.40 to $1.10 for #2 insulated. The place that pays $0.40 pays on the spot which is why it is so cheap. I don't know how they get away with it...they're not a new yard.

My guess would be that the yard pays less has a lot of walk in traffic pushing a shopping cart full of last nights pickings.