From Scrap to Consumer Goods: Who Makes the Most Money?

In my part of the country, scrap steel is selling for $70 a ton and copper is selling for $1.80 a pound.
The cheapest brand new washing machine from the store is selling for $300.

After a trip to the scrapyard today, I got to thinking. About a year ago, scrap steel was selling for $280 a ton and copper was selling for $4.10 a pound...
And the cheapest brand new washing machine from the store was selling for $300!

Scrap has fluctuated drastically in the last year, yet the price of a low end washing machine hasn't changed. And that's what got me thinking: How much money is each party making from a ton of scrap steel? You have 5 parties involved:

1. Scrapper.
2. Scrapyard.
3. Processor.
4. Factory.
5. Store.

How much do you think the scrapyard sells metal to the processing plant for?
How much do you think the processing plant sells ingots to the factories for?
(I was guessing that from scrapper to the store, there is a markup of 160% on average each step.)

When steel was at $280 a ton, copper was at $4.10 a pound and washing machines were selling for $300 a piece, who was making the most money?

(Sorry if this post isn't very clear. I sometimes have trouble putting my thoughts into words because my mind moves too fast.)

On scrap I don't know but cigarettes the answer is the government.

A quick look tells me if I pick up free scrap then undoubtedly I will be the one in the chain that makes the most. Mike

I would say factory, as they are making a finished product, the more items they make, their unit cost go down and the profits go up! The down side for a factory (cost variables) raw goods, energy, labor, capital infrastructure, etc. etc. Raw goods & energy I would say are cheaper (for now).

Buying a washing machine relates very little to the metal involved, and more to do with the production costs, and since almost all if not all are made in other countries, the cost of shipping, etc. When you think about the actual value of the metal in regards to it's weight, even large fluctuations in the value of metal would affect the actual price of a washing machine very little.

I was reading about metal recycling in regards to the spot prices of metals. As we do a better and better job recycling metals, the cost of those metals goes down. The relation is based on the fact that it's far less expensive to melt a recycled metal of known alloy, instead of recovering metals from a complex matrix of elements and then refining it to higher purity, and then alloying it with other metals to create specific alloys for industry.

For example, in my own business, it is far less labor and cost intensive to separate karat jewelry, or in some cases to take existing karat jewelry and alter it slightly by adding whatever metals needed to ensure it's a specific karat. Yet I am also currently working with a complex ore, I have been for almost 4 months now where the values, the precious metals are locked up in an extremely complex matrix of other elements and minerals. One specific mineral requires a specific flux formulation in order to break it's elemental bonds so that the minerals become metals and thus release the encapsulated metals inside. It's been very expensive and a long hard road of testing, re-testing, assaying, etc. The equipment alone is extremely expensive, the induction furnace was around $37k, the crucibles that can only be used for an average of about 20 times are about $25 each for the small ones, and can be upwards of $100 for the cheapest large crucibles, or when melting more pure metals the crucibles cost between $150 - $300 each for zirconium. To assay by XRF would cost on average $15 per scan so I recently purchased an XRF for $17,000, within the very first week I had used it over 300 times alone. It's expensive to say the least, where a known alloy I can scan once to get the percentages, then alloy it with whatever required to increase whatever metal needed to make it a specific karat, and then scan once again by XRF to ensure the karat.

It's almost counter intuitive, the more that is recycled, the more of those metals available on the market, the less demand for those metals, the more offers for those metals, the more competitive the prices become, the less recycle/scrap yards are able to pay. It's good for the environment, bad for the pocket.

Scott

The price of everything should be cheaper yet it's not. Corporations don't care about you. It's about making money for the shareholders and keeping the money flowing to the people running the place. Why is the price of fuel 40 percent cheaper for airlines yet airplane tickets cost more then last year????? The price of fuel is the highest input they have in they're business model. I would be flying all over the place but I look at the price of a ticket and its 350 bucks or over a grand to fly my family anywhere. Think about how much cheaper aluminum and steel and oil (plastics) are to make a vehicle yet the price of a car hasn't come down and won't come down. I could go on and on but who's listening really.

I was wondering the other day.. Why USPS shipping prices went up recently but the price of gasoline is low, low, low? Other than the fact that the US government owes a lot of money into the USPS retirement fund.

Quote:

---

Originally Posted by PistoneScrapProcessing

The price of everything should be cheaper yet it's not. Corporations don't care about you. It's about making money for the shareholders and keeping the money flowing to the people running the place. Why is the price of fuel 40 percent cheaper for airlines yet airplane tickets cost more then last year????? The price of fuel is the highest input they have in they're business model. I would be flying all over the place but I look at the price of a ticket and its 350 bucks or over a grand to fly my family anywhere. Think about how much cheaper aluminum and steel and oil (plastics) are to make a vehicle yet the price of a car hasn't come down and won't come down. I could go on and on but who's listening really.

---

Another good example of companies not caring about their customers is Country Mark. The gas company. They drill all their oil right here in America. Yet they are just as expensive as anyone else. They take $1 from the sale of every gallon of lubricant and $0.50 a gallon of every gallon of fuel sold and donate it to charities that only use about 10% of do attains for actual causes anyways. You know how much the price of fuel would be if they alone gave those savings to their customers!? Who ever makes the product is who makes the most money. And you won't get any part of it unless you scrounge for scraps. Or start a non-profit and keep $900,000 for every Million as "operating costs".

Quote:

---

Originally Posted by TheeFirewoodGuy

In my part of the country, scrap steel is selling for $70 a ton and copper is selling for $1.80 a pound.
The cheapest brand new washing machine from the store is selling for $300.

After a trip to the scrapyard today, I got to thinking. About a year ago, scrap steel was selling for $280 a ton and copper was selling for $4.10 a pound...
And the cheapest brand new washing machine from the store was selling for $300!

Scrap has fluctuated drastically in the last year, yet the price of a low end washing machine hasn't changed. And that's what got me thinking: How much money is each party making from a ton of scrap steel? You have 5 parties involved:

1. Scrapper.
2. Scrapyard.
3. Processor.
4. Factory.
5. Store.

How much do you think the scrapyard sells metal to the processing plant for?
How much do you think the processing plant sells ingots to the factories for?
(I was guessing that from scrapper to the store, there is a markup of 160% on average each step.)

When steel was at $280 a ton, copper was at $4.10 a pound and washing machines were selling for $300 a piece, who was making the most money?

(Sorry if this post isn't very clear. I sometimes have trouble putting my thoughts into words because my mind moves too fast.)

---

alot of great post here, but your 5 steps are at least 15, at bare minimum there is logistics between each of those steps(transportation) and between that scrap yard and the mill there can be up to 5 entities handling the material. from scrap to product in your home has many many steps, Oh. BTW scrap is only one source of raw material, there is still the mines to contend with. and they are directly in competition with the scrap industry


V/r HT1