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SMF rookie here, with a very basic question.
When I look up national average prices for scrap steel, I get numbers like $220 a ton for heavy metal scrap steel. When I reach local scrap processors, I get prices like $3.75 per cwt. Which, if Im doing the math right, is only like $50-60 / ton. Why the huge difference, what am I missing?
$220 a ton is what the mills are buying #1 HMS for. You are selling to a scrap yard and most likely a 'feeder' yard. That yard buys your material, makes a profit, sells and ships to a larger yard that in turn sells and ships to a mill. Along the way, (if your material is not prepared - proper size, etc.) it is processed. There are multiple people profiting, and getting paid, not to mention equipment being utilized, property taxes being paid, yards being maintained, etc..Quote:
Originally Posted by TexasScrapSteel
$3.75 cwt is $75 a ton or $84 a gross ton
That is hugely helpful thank you. What is the larger yard doing to the steel that allows it to sell to the mill at $220/ton? What stops the feeder yard from selling directly to the mill?Quote:
Originally Posted by mthomasdev
generally the mill only deals is VERY large amounts on a consistent basis...that is why you couldn't take even a few tons to them (they don't have time nor wold deal with you). End places like mills deal in VOLUME, only large one to be cost effective.
Most feeder yards would not have the amounts needed to deal directly with mills.