HMS profit margin?

That or the other yards don;t want to divulge that info as it would make the people who sell to them jealous and start asking for more for what they bring in. Just a thought.

To many factors, Depends on compitition in your area, How strong the market is, Volume and who your buyer is. Most yards do not make a killing per ton. Its probbaly lower than you would imagine.

A few questions first off what do you consider number one steel? I only know two grades HMS and PNS. Those are the only two grades there's also cutting coils for clip but I highly doubt that's what you are talking about. What price are you buying it unprepared at and what price are you selling at currently? I know that's kinda a top secret question you never know where your competition might be lurking at so if PM if you don't want to mention it. How much more volume do you intend on buying and selling every month. How good are your guys at preparing and sorting HMS. A majority of the time the yard will buy it as unprepared torch material and I can turn 75 percent of it into PNS. They just made an extra 30 a ton for nothing. You have to figure out competitive secrets to get an edge on your competition and turn a larger then expected profit on your cut materials. Are you mobile or stationary? What gases are you using? What torches? What are you sorting and loading with? How many tons a day are you burning? Are you running a shear next to the burning the area? There is a ton of variables that would have to be answered before you can determine your expected profit.

To answer your main question though yes it always a way bigger profit to sell direct to the mill. Its also cutting out the middle man which is the yard and trust me they don't like competition so be careful what you wish for especially if you get leads for work from some of the yards you do business with. In the scrap industry one hand feeds the other if you catch my drift.

We have trucks.. excavator with a grapple and magnet. Using 3 foot victor torches with liquid oxygen and propane. #4 and #6 scrap tips. No shear as of yet.. We have one of the stationary ones but don't use it much.. mostly for non ferrous. As of right now I am buying all of my steel as oversized. And I call #1 1/8" and thicker.. Seems to me that mills call it 1/4" and over though. #2 to me is anything under 1/8" of an inch and not over 2'x4'. My main question is should a yard be making 20/ton? 40/ton? 60/ton? etc.. I am new at this and haven't even got in with the mills yet so I am trying to decide if it is worth the effort. My tin and vehicles are going alright and got my non ferrous picking up so I need to start my heavy melt. Cant have it all in a day but I'm working at it.

That just blows my mind. 1/8 of an inch difference between number one and two. Plate and structural is anything such as I and H beams, Large pipe, angle iron, plate, flame cut, tank scrap, etc. Cut 5x2x2 in any given direction. HMS is shafts, heavy machinery that you can't slip into the plate pile, rebar, rolls, chrome or stainless coated anything, copper clad steel, basically anything you absolutely can't put in plate. Trust me I would rather get the word that my plate will get rejected and downgraded to Heavy melt if i stick this or that in it it that would contaminate the load. Remember its not so much about size as it density. I could ship a whole 70 ton car of plate cut 5 1/2 x 2 1/2 if I knew the mill put in a big order and was needing the scrap to melt. Sometimes you can feed them crap and they will take it. It works both ways though when there orders tighten up they start rejecting loads left and right for being a few inches over or being contaminated with dirt, concrete, etc. The same stuff you were shipping them a week ago might not fly the next. Feast or famine. It always always pays more to ship direct then to a middle man like the scrap yard you are currently dealing with. Just remember once you stop shipping to them i bet they call and ask what the deal is and you have to tell them you started shipping direct. They can go after accounts and try to put you out of business now your competing with them just keep that in mind. The scrap game is ruthless and cut throat. No one ever got anywhere though in the scrap business without stepping on throats to get ahead.

Whoops heavy melt has always been 4 x 2 or 3 x 2 foot/18 inches. Solid material is usually nothing bigger then 3x3x3 or three tons. A solid cubic foot of steel depending upon the alloys added such as a piece of cast or steel weights between 430 lbs and 500 lbs per cubic foot.

Are the tips you are using nsf or H scrapper tips? Why are you not using number eight tips to? Is the material thick or paper bag thin?

Haven't ran into anything I couldn't cut with a #6. and the tips are #6-VBN. Most material is 1/4" and above right up to 4". A lot of truck frames and axles. And almost all is cut 4x2 with some being a little bigger.. I haven't been shipping my steel.. since i just started buying it so there is no problem there. but I haven't dealt with any mills before. I am extremely picky on the scrap and what goes in what pile so explain to me exactly what will go for p&s and #1. I usually put anything made of structural steel like angle, plate, i-beam, channel, heavy wall pipe (does pipe have to be split if it is 7" or under?), square tubing and so on. I usually put anything bulky like truck axles in #1 along with anything hardened or thin. Its all a learning experience.. We always let the big guys come cut our scrap and walk all over us until the good is gone and we are left with a mess. Time to do it right.

Separate the material and ask for the price difference unless there isn't one in the market you are in. Sometimes that's scrappin.

PistoneScrapProcessing is right on the money, on one of my deals that pissed of a local yard the owner buggered my deal which I had already started. Said I was cheating them and that he would pay X over my price. Well X price was well over market, he was buying me out of my deal at a loss.

I had more than one run in with Billy Wosk, It can get nasty, like piston said one hand feeds the other. Most scrap families go way back as does the money that runs them yards..

All true.. but I have other advantages... I'm not out looking for scrap, it's coming to me. And already I pay less than them and still get quite a bit. So If I get in with the mills to sell it I could up my price a little and maybe get some more volume. They have a bad reputation with a lot of people so the fact I am honest gets me business. I don't plan on getting it all.. just enough to make a little profit and keep on going. And people cut throat more than enough here, friends even are doing it so I am well aware of that.

Have you tried to sell directly to the mills?

Originally Posted by myekem

All true.. but I have other advantages... I'm not out looking for scrap, it's coming to me. And already I pay less than them and still get quite a bit. So If I get in with the mills to sell it I could up my price a little and maybe get some more volume. They have a bad reputation with a lot of people so the fact I am honest gets me business. I don't plan on getting it all.. just enough to make a little profit and keep on going. And people cut throat more than enough here, friends even are doing it so I am well aware of that.

That is what I am trying to get into.. Just want to know how much profit per ton I should be aiming to get.. Just figured some bigger guys would give me an example of what they would get per ton.

The way I see it is, you need to look at the prices Mills are looking for.

And then look at the price it all costs you (Inclusive of everything).

That gap is your profit/loss.

If for instance is costs you $100 per Tonne, and the mills currently pay $150 per Tonne, then it would make sense for you to try and get a long term contract for $125 - 130 per Tonne.

That way, you still make a healthy profit, and are more likely to gain a long term contract from your buyer, as it's significantly lower than the price they are paying.

My head is spinning......lol