How to Sell Metal Scrap Material in Best Prices - PowerPoint PPT Presentation

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How to Sell Metal Scrap Material in Best Prices


Choosing the right vendor to sell your metal scrap is important to get its right value. But there are some tricks that you need to keep up your sleeve to get the best value. – PowerPoint PPT presentation

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Title: How to Sell Metal Scrap Material in Best Prices

How to Sell Metal Scrap Material in Best Prices
Your system generates scrap material every day
after the manufacturing or consumption process.
And for years, you mightve been following this
procedure to scrap metal calling a scrap
company, deciding the price, sending the filled
containers, and then getting paid for your metal.
For you, this might be the best way to handle
the scrap metal. But, only some manufacturers
know selling scrap metal the right way could be
another source of profit for them. Everyone
selects a particular scrap company for various
reasons including lower prices, better services,
or just transparency. But most of the scrap
companies would buy very low and sell high.
Hence, as a seller, it is important to
understand the value of your scrap material and
how to get the right value for it.
  • So, weve gathered the steps to help you make the
    most out of your scrap metal.
  • Fix the Settled Price
  • In the fabrication industry, selling scrap metal
    isnt a one-time event. Therefore, it is
    important to make sure that you dont end up
    working with a company that tempts you with an
    above-market price, and after that gradually
    lowers your per-ton rate to a below-market
  • You need to make sure that you tie the pricing to
    a defined commodity-market index. This way, you
    can protect yourself when the market falls and
    benefit when there the market rises. The decided
    upon index prices are generally not similar to
    the negotiated price for the scrap. So, when you
    negotiate, you are basically negotiating the
    differential price. This means there will be a
    difference between the market index price and the
    amount that the scrap company would give you.
    And when your prices are tied with the
    market-index, the scrap company wont be able to
    freewill their way around the prices. So, make
    sure that when the index goes up to 20, the
    scrap price should also go up by the same amount.
  • Be Aware of the Downgrades
  • It is a common industry practice to pay for the
    least valuable scrap material in a load. If the
    load contains 90 stainless and 10 some other
    material, the less expensive material would be
    graded. Looking from an ideal point of view, the
    payment should be based on the percentage of the
    material in a load. For dirty loads, downgrading
    the scrap amount is certainly fair, especially
    if a dirty load increases the amount of
    segregation work. Hence, if a scrap company
    downgrade a load, ask for proper documentation.
    Make sure that there is an agreement to send
    documentation and pictures for any downgraded
    load. If you communicate with the scrap company
    about how it handles dirty loads, you will
    understand how it operates.
  • Separate the Scrap Pieces
  • This technique is all about maintaining
    transparency. This process includes everything
    that happens to the scrap before its sent to
    the mill. It includes shipping, processing costs,
    and other value-adding process costs. For
    instance, you get a pallet of metal pieces after
    a laser cutting process from a machine
    containing Amada parts or Bystronic parts. Before
    you put them for buying, they must undergo a
    number of value-adding steps. You need to
    segregate them by type and cut down to a
    mill-acceptable size.
  • Just like that, steps may vary depending on your
    exact material mix and requirements. It depends
    on your own processes and the price increase
    that a scrap company is willing to give you.
  • It might sound like a complex process, but
    remember that just like the production, scrap is
    also a revenue center, so its worth organizing
    it with a process.
  • Keep Track of the Load and Tracking Reports
  • Usually, the truck arrives at your workplace,
    retrieves your scrap, and leave a pickup receipt
    and scale ticket at your dock. After a certain
    period of time, the concerned person would
    deliver them back to the front office. But it is
    not necessary that all those pickup receipts
    make it into the main office. You need to verify
    the number of loads that left the facility and
    for how many of them you received the payment.
    Keep one responsible person to take care of this
    process. Especially, when you scrap aluminum,
    stainless, or other high-value materials.
    Because each load can account for thousands of
  • Summing it up
  • Handling scrap material isnt rocket science. But
    it is important to understand the process,
    market, and of course, having a basic knowledge
    of the industry prices wont harm.
If done right, just like you produce products
using Bystronic parts or Amada parts, you can
turn scrap into a valuable profit-making product.
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