There is a great deal of price variance when you abandon rail track and want to determine the salvage value as relay materials and / or as scrap materials.
This on line report gives you an idea of that market price volatility.
By playing the market, a seller of rail scrap can get a considerably higher price then just the base line estimate. Here are some valuable economic lessons from published sources.
What Determines Scrap Metal Prices?
Scrap Metal Prices are a function of multiple market factors. These include, metal type, location, quantity of scrap metal, and the current market sometimes daily changing value for your materials. In other words, the price you get paid by a scrap yard will depend on precisely what materials you are selling, where you are selling (what side of town, which side of the world, etc), how much scrap metal you are selling (pounds vs tons versus hundreds of tons), and how much the material is worth in the daily changing market at the “spot price”.
Scrap Metal Type:
Scrap metal is broken down into many different types of categories. For example, Copper, Lead, and Stainless Steel are all types of scrap metals that can be sold at a scrap yard, and each of these metals can get further subcategorized into copper wire, lead wheel weighs, or 18-10 grade stainless steel, for example. What is often not obvious to a railroader is that prices are volatile.
Also, a grade can be judged differently by different buyer at the same time. For example, what one scrap yard considers as bare bright scrap copper, or Rail #1 will at another competing scrap yard be considered as copper #1 or Rail #2. Keep this in mind when shopping around for better prices, because the last thing you the seller want is a quote for your materials that might be as much as ~40% reduction in price versus another competing buyer says the scrap metal junker.
Without making too many generalizations, sellers can assume that scrap metal prices will always be highest in areas where there is the most competition. This means rural areas, areas far away from refineries, areas too far inland, etc will rarely have better pricing then those places where scrap yards can both fight for customers and haggle with refineries or steel plants. Keep this in mind when searching for the best scrap yard.
“Spending 1 more hour round trip and an extra $15 in gas to get to a further scrap yard may make you an additional 15% at the pay out window!”
In a similar competitive action, some sellers are actively selling their scrap metal on eBay!
Quantity of Scrap Metal:
On the surface, it is a simple concept; the more metal volume you have, the more it is worth. But further exploration shows that volume packaging is a tool which can be used to your advantage.
Current Spot Metal Prices:
These would be the prices that newly refined ore and scrap is being sold for. In some markets, steel scrap competes with billets. In general, the more money a steel mill can refine the scrap at because of higher finished steel prices, the more market leverage you the seller have at selling your scrap. This will not always be the case, but it could be. This means that the process to use often is estimating your scrap on hand value is to follow the pattern of changing spot price.
How To Negotiate the Best Scrap Metal Prices?
The easiest way to improve the market value of your scrap metal will be to somehow manipulate any of the 4 different parameters that scrap metal prices depend on to your advantage. Here are three simple techniques to getting better pricing, ordered from easiest to hardest; You will need to use all three to get the absolute best pricing!
Play the quantity: Every scrapper has encountered this scenario: You call up the scrap yard to check on the price of a certain type of metal; their first and only question “How much do you have?” When you buy/sell in bulk, you get better pricing, and the scrap yard is no exception. Try this on for size: instead of selling brass by the bucketful, try the barrel-full! Save up a 55 gallon barrel of brass (it doesn’t need to be full). A semi-full barrel of brass should weigh 1/4 ton – 3/4 ton depending on what type of brass components are in it. Same process works for steel rail scrap materials.
When you call up the scrap yard to ask what they pay for brass, they will be much more receptive to your price requests if they know you will be bringing in a 1/2 ton of brass, and hopefully will be happy to offer you 10% more than what they normally would! This mentality can be applied to all metals.
Save up your shred metal and sell it by the trailer-full, or even dumpster-full! Or the train load.
Play the market: All things being equal, scrap metal prices will drop slightly in the summer and increase slightly in the winter. This is especially true in areas that have very cold winters that impede recyclers and scrappers from collecting and salvaging. Use this to your advantage! WARNING: this only works in scrap markets where there is not much volatility, meaning the price is not constantly jumping and falling without reason.
Play the scrap yards: Every scrap yard is willing to compete for your business, especially if your business is consistent! (Especially if you are scrapping full time!) It all dependents on how much material you are bringing in, and how consistently you are bringing it in. Start off by becoming a steady customer at a scrap yard that has proven itself to be of a high-caliber. This is the key! The better the scrap yard, the better they treat their customers.
Be sure to introduce yourself to the owner, and always save your scrap yard price tickets! ALL OF THEM! Total up how much metal you bring in per week, per month, per year, etc, and how much material that is for them. Use that as business intelligence to guide your price negotiations.
One way to be aggressive in getting the best price offer is to understand that sellers that bring their business to the scrap yard precut to scrap class measurements can receive a better price.
// If you have any questions about getting better scrap metal prices, or if your scrap metal prices are “fair,” there are experts you can turn to or you can register for a metal recycling forum.
Read more at: > http://www.scrapmetaljunkie.com/993/best-scrap-metal-prices
There are other examples of pricing rail scrap. Interested readers can review more about price of old rail materials by reviewing ICC abandonment cases, rail line subsidy negotiation hearings at the ICC or the STB, or by viewing net liquidation estimates occasionally published by Woodside Consulting or R L Banks as railroad experts.
You can also scan my rail blog to see examples of the trends in the street prices of scrap steel. Scrap steel that might have earned between $350 and $450 a ton in the past four years is now in the price range of $220 to $270. Hanging onto scrap for a long term price rise in this case could have cost a seller as much as ~ 42% to ~51%.