A key component of pricing any recycled commodity is the cost of transportation. Generally, profit diminishes for both the seller and the buyer according to how heavy the load is and how far it travels. By volume, scrap metal is the heaviest commodity and must deal with the heaviest costs for transport. Even moving a ton of scrap iron a short distance from a fabricating shop to a local scrap yard involves numerous expenses – labor to load the material, the wages of a truck driver; vehicle depreciation, maintenance, insurance and fuel, miscellaneous road expenses and deadhead return of the vehicle.
As inland distances increase to a port whether by truck, barge, rail or intermodal the transportation costs multiply to include costs for regulation compliance, and depending on the marine terminal, a growing number of increasingly expensive environmental, security and foreign currency exchange fees. ...read more
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Current scrap market on upswing
The state of scrap metal is a whole lot better than it was a year ago, but not nearly as good as many would like because of difficulties in acquiring material and flat, uncertain market conditions. Nevertheless, scrap metal has rebounded to stronger levels as the economy is beginning to recover.
“The weather has improved and that has helped improve business and commodity prices are up. The bigger question unfortunately, is that there is a bit of scarcity of material out there,” commented Greg Dixon, general manager of Baker Iron and Metal, the largest scrap metal dealer in central Kentucky with yards in Lexington and Morgan, Kentucky and Seymour, Indiana.
Demand for ferrous scrap tanked in late 2008 but has returned to reasonable price levels. Heavy melting scrap (HMS) was recently in the mid $300 to $400 per ton range, about back to levels seen on 2006, but nowhere near the $700 range it peaked at just before the financial crisis. ...read more