Scrap prices: Cwt vs Ton

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?

Originally Posted by TexasScrapSteel

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..

$3.75 cwt is $75 a ton or $84 a gross ton

Originally Posted by mthomasdev

$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..

$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?