Good outlet for Shredded Iron?

Hi guys. New to the forum. I'm the owner of a mildly successful metal recycling yard in PA. Pretty much a middle man, or feeder yard for larger companies.
I've recently been given (what I think) is an opportunity to expand my business and profit margin. A friend of mine pretty much is giving me his hammermill shredder, after deciding to close his yard and retire. I know they are a lot of work and maintenance, but I think the return can be quite profitable. Being new to that side of the business, I would be looking for an outlet for the shredded iron/tin. I've talked to 3 companies sp far. Eastern Metal, Sims, and Weitsman. As a wholesaler now, I'm getting $129 (as of today) per gross ton. If I shred, the end product would be worth anywhere from $170-180/gt. Does anyone know of anywhere else to get pricing? Or are those guys my only option?

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Originally Posted by IronShredder

Hi guys. New to the forum. I'm the owner of a mildly successful metal recycling yard in PA. Pretty much a middle man, or feeder yard for larger companies.
I've recently been given (what I think) is an opportunity to expand my business and profit margin. A friend of mine pretty much is giving me his hammermill shredder, after deciding to close his yard and retire. I know they are a lot of work and maintenance, but I think the return can be quite profitable. Being new to that side of the business, I would be looking for an outlet for the shredded iron/tin. I've talked to 3 companies sp far. Eastern Metal, Sims, and Weitsman. As a wholesaler now, I'm getting $129 (as of today) per gross ton. If I shred, the end product would be worth anywhere from $170-180/gt. Does anyone know of anywhere else to get pricing? Or are those guys my only option?

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First, you haven't told us what kind of volume your talking about. Is it large enough to sign a contract with a mill?

I believe PSC is in your area. You could also check metalico (Chinese owned). I would think wietsman would be the best as they sell to the mill across from thier new castle location. As a result, they have a very low transportation cost which results in higher prices.

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Originally Posted by IronShredder

Hi guys. New to the forum. I'm the owner of a mildly successful metal recycling yard in PA. Pretty much a middle man, or feeder yard for larger companies.
I've recently been given (what I think) is an opportunity to expand my business and profit margin. A friend of mine pretty much is giving me his hammermill shredder, after deciding to close his yard and retire. I know they are a lot of work and maintenance, but I think the return can be quite profitable. Being new to that side of the business, I would be looking for an outlet for the shredded iron/tin. I've talked to 3 companies sp far. Eastern Metal, Sims, and Weitsman. As a wholesaler now, I'm getting $129 (as of today) per gross ton. If I shred, the end product would be worth anywhere from $170-180/gt. Does anyone know of anywhere else to get pricing? Or are those guys my only option?

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I think you need to do some serious thinking here. I just check prices for shred feed on wietsman's Newcastle facebook page. $164 a gross ton and that's for me walking in off the street.

I've been thinking about this for a couple of hours now and have numerous questions / comments / concerns for you to ponder.

1. Assuming that your shred feed is 95% ferrous, you would only get $171 (based on $180/gt) for every ton you shred. As I mentioned in the previous post, Ben Wietsman New Castle is currently paying $164 / gt for shred feed and this is for people walking in, not wholesale. How much more do you need to make to make shredding worth it?

2. Again, assuming 95% ferrous, for every ton (2000 lbs) you shred, you will have 100 pounds of shredder residue. This will include non ferrous metals, stainless steel, plastics, wood, glass, etc. Are you set up to process the residue? If not, do you have a buyer for the residue, or are you going to have to send it to the dump?

As I don't know what part of PA you are in, I have assumed that if you sell to Wietsman's that it would be going to the New Castle location and not to Owego, NY. Owego is going to have lower prices due to higher shipping costs to move the final product to the mills.

Sorry, I should have given some more details on my situation. First, we are a smaller yard. We only receive about 1-2 tons an hour as of now. Second, we primarily sell our iron and tin to Weitsman in Scranton. They are the closest, and usually give the best pricing. Over the scale to the general public, they are giving 120/gt, and as a wholesaler, they give us 129/gt (as of TODAY- it was 144/gt last week). Obviously the prices have taken a big hit over the last few months. As for the shred I would be producing, I spoke to Adam at Weitsman, and he said its tough to give an exact price without knowing hard numbers (i.e. how many tons/day we will be producing) or seeing the product (as I havent even gotten the shredder yet), but a general rule of thumb is to expect a minimum of $40 more per gross ton for shred. So based on todays pricing, (129/gt) I would be getting roughly $170/gt shipped to Oswego. (PS- Weitsman wholesale pricing is based off 2240lbs, not 2000lbs per ton.)
Now, this shredder my friend wants to give me is a smaller one. Its meant for smaller, lower volume yards. It can only process 2-3 tons/ hour. But, it does come with everything. Feed conveyor, hammermill, outfeed conveyor, 2 magnetic crossbelts, shaker table, eddy current separator, sorting station, and a final aluminum conveyor with a third magnetic head.
A couple of things that are going in to my decision whether or not to take a chance with this machine. First, Im getting $.057 cent/lb just putting the tin into a log baler and sending it in containers. If I shred the material, I will be getting $.075 cents/lb. Not only that, put I will be pulling the good stuff (brass, copper, alum) out of the fluff and making profit where Id normally be giving it away. Granted, I now will have the expense of disposing of the fluff to a landfill, but I dont see that being a deciding factor.
So as of today, over the scale, Im giving customers $.035 cents/lb light iron/tin (so based on my current price Im making $.022/lb.)
If I was to shred the material, I would be making $.04 cents/lb. Of course this is gross. This isnt accounting for the disposal of the fluff, or electricity cost.

If your friend is giving you the shredder I really don't see how you would lose anything unless I'm missing something here.

sounds like you have all the figures, you just need to figure out operational/maintenance costs per pound and then you can see if it is worth it based on existing inventory levels you get daily. I WOULD point out, depending on the mill, you might have some other opportunities you didn't have with other materials. After all, if you have it, you can run other stuff when you do't have any steel to run.....not sure if it is fine enough for copper wiring, tv yokes and other mixed metal items, but that is an option as well. You might get some synergies there by being able to run that and get higher pricing for those materials.

Something to think about.

I thought the large shredder places were able to sell there fluff, you may see if there is a buyer for it.

Thank you for the clarifications. That makes this a little easier to look at.

Let's look at your existing volume and figure that 95% is ferrous. I'm not going to look at the non-ferrous that you may be able to recover. We will just say that is gravy. Let's take an average of a ton and a half an hour and assume you are open 9 nine hours a day. 1.5 tons / hour times 9 hours x 95% ferrous recovery = 12.825 tons = 25650 pounds. 26650 pounds time 0.018 cents / pound increase = $461.70 a day above current

Let's look at the high end of your existing volume (2 tons per hour) = $615.60 a day above current

Let's look at the high end of the plant's capacity (3 tons per hour) = $923.40 a day above current

Has your friend given you any idea how many additional employees you are going to need to run this? What about electricity or fuel usage?

To make this work you need to sell to a steel mill. Most steel mill requires brokers. In order to sell metal . Djj is one of the biggest brokers. Now for the bad news . Most companies that shred metal figures a 33 % trash after shredding. It is called fluff . It is rubber,plastic , seats foams etc. Then there are difference grade of shred . Then there is maintenance on the shredder. Most shredder operators figure 8 hours of running 8 hours of maintenance. I could go on and on . But I hope this give you more information.

Shredding generally costs 40-50 a ton depending on ur power and maintence bill. All of you're competitors have heavy media plants and downstream equipment that costs millions of dollars. They only send trash to the landfill everything else is recovered. You gotta pour a bunch of concrete and do a ton of yard improvements just to install a shredder. In today's market shredding isn't a winning business unless you are set up to do it and do it right. I think next week they're are 6 scrap metal facilities up for auction everyone is asking themselves who's next.

Hey guys... Sorry for the late reply. A few updates. I took the advice given and did a little more research. First, The shredder itself would require 3 guys. One to load the infeed conveyor, 2 at the sorting station. Dont forget this system comes with an eddy current, so the "fluff" would for the most part be worthless. The eddy current and sorting station should take care of recovering most of the normally "discarded" non-ferrous.
Second, I tried calling a few more places that you recommended. Metallico offered me $125/gt for SHRED. Im getting $129/gt from Weitsman, as is. I also called Ellwood (who Weitsman sells their shred too domestically). They said they wouldnt be interested for 2 reasons. Number 1, right now they arent really buying shred to smelt, and number 2, if they do buy shred, its from weitsman who is right across the street. So there is no point to buy from a smaller guy 300 miles away and ruining that relationship.
As for costs of "running the shredder", Im still working on that. Ill have to ask my friend how much power it uses per hour and see what the electric company charges to supply it.
As for the concrete cost, dont forget this is a SMALLER shredder. I received the blueprint from my friend on how to lay out the concrete, and sent to to a friend of mine who would be doing the foundation. The concrete will only cost between $8,000 - $10,000 for the hammermills foundation.
Im trying to upload the pics of you guys to show the setup, but for some reason its not letting me. Ill keep working on that.

need a few more post to be able to post pics...