Your thoughts on this auction ?

[bailey]

http://www.ebay.com/itm/SCRAP-METAL-...item3f0d03011e

This ebay auction, number 270801240350 , was for approximately 10 tons of scrap metal, according to the listing. (It was being sold by the State of NY.)

I am very new to this line of work, but 10 tons is 20,000 pounds. The winning bid was for $18,625.50 with 40 bids by 13 different bidders. This works out to between 90 cents and $1 per pound. Does this make sense? I must be missing something. I am assuming that the bulk of this lot is basic steel going for around 10 cents a pound, ballpark. If that's right, how is the winning bidder expecting to make money, even with other scrap going for higher prices?

If my logic is way off, please tell me where I am going wrong.

(I know that auctions can cause people to pay prices they never would in a non-auction setting, but still, I don't get this.)



Thanks

[bailey]

I just thought of something. Do you think that the winner is hoping to acquire items to sell before scrapping? (Appliances on craigslist, etc.?)

[GeorgeB]

Does look to be $18,000 worth but I could be wrong.

Judging by the picture, all looks like pure scrap to me, but could be wrong too.

[gustavus]

http://www.ebay.com/itm/SCRAP-METAL-...item3f0d03011e

This ebay auction, number 270801240350 , was for approximately 10 tons of scrap metal, according to the listing. (It was being sold by the State of NY.)

I am very new to this line of work, but 10 tons is 20,000 pounds. The winning bid was for $18,625.50 with 40 bids by 13 different bidders. This works out to between 90 cents and $1 per pound. Does this make sense? I must be missing something. I am assuming that the bulk of this lot is basic steel going for around 10 cents a pound, ballpark. If that's right, how is the winning bidder expecting to make money, even with other scrap going for higher prices?

If my logic is way off, please tell me where I am going wrong.

(I know that auctions can cause people to pay prices they never would in a non-auction setting, but still, I don't get this.)

Thanks

Lot more than 10 tons in that picture, closer to 40 - 50 tops, price is still out of line, even of the winner sold direct to the mill.

Regards
Gustavus

[IdahoScrapper]

That bid is outrageous. With that said, I have some scrap I want to sell to the top bidder.

[Hypoman]

fuhgeddaboudit

[bailey]

What would be your max bid for this auction? What percentage would you think is basic steel scrap at 8 to 10 cents a pound, and what would you assume is higher priced?

If 75% is at 10 cents a pound, and the rest is copper at $3.50, the worth of scrap is:

15,000 * $.10 = $1,500
5,000 * $3.50 = $17,500

Total $19,000

Before any costs involved. And assumes remaining 25% is all copper, as opposed to lower priced stuff.

It seems to me that either:

1) the weight estimate in the listing is way too low
2) the mix of metal involved I assumed is wrong
3) there is stuff that can be sold for more than scrap value

OR

4) The winner paid full value and will have to work for free to recover half of their investment

Can you guys tell me if this analysis is somewhere in the ballpark, or am I missing the boat?

I ask because I may start to bid on smaller scrap auction and want to see if I am thinking about the values correctly. Am I correct to assume that at this point in time, auctions are going to cost way too much and just look elsewhere?

Thanks

[bailey]

I wrote

The winner paid full value and will have to work for free to recover half of their investment

I meant to write

The winner paid full value and will have to work for free to recover their investment