Do You Know How to Sell Scrap Metal?

How To Scrap

Whether you are collecting scrap metal for income or as a hobby, understand that many lucrative scrap companies started out the same way. Collecting scrap metal pays pennies per pound, but it is not difficult to work up to weightier amounts if you know where to look for it. Keep in mind you need an area to store and sort your metal and a sturdy vehicle to haul it. You also need to make new business contacts.

Where to Look

Comb neighborhoods and put out fliers announcing your new business. Make friends with plumbers, building contractors, roofers and electricians. Visit machine shops and service stations. In some cities, the town dump is a freebie for the scrap collector. Keep an eye out for dumpsters and large trash containers near building sites. Find out what days metals are removed and ask if you could remove them. You may even make extra cash hauling unwanted items from businesses on a regular basis. Become familiar with the different types of metals, as some bring in higher prices than others. Sort the scrap according to type, as recyclers pay more when it is separated.

Hefty Items Add Up Fast

Water heaters are an easy source of metal, as many plumbers love having someone to haul them away. Although they do not pay much individually because they are mostly tin, you can accumulate them easily in lots of five or 10 at a time. Boilers, air conditioners and heaters are heavier items, sometimes weighing up to 300 pounds for a residential unit. They can be stripped of pricier metals, such as copper tubing and brass fittings, which can quickly add up. A large industrial boiler can weigh up to 700 pounds and must be dismantled for the metal recycler. Remove such things such as pressure gauges, as they can be sold in yard sales and can bring in some additional cash.

Instructions on how to identify and sort scrap metal

  1. Set out six large cardboard boxes to place items in and ease the sorting process. Label the recycleboxboxes as follows: iron, aluminum, batteries, brass, steel and copper. These are the six categories used by the scrap metal recycling industry.
  2. Start with the “Aluminum” box. Put things like soda and other cans, aluminum furniture, aluminum car pieces and storm doors in this box. Soda cans will likely be the easiest to find, but keep in mind, the idea is to go for more weight if you’re interested in making money off your recycling.
  3. Take a magnet and scan it over metal items. Place the items that have a magnetic attraction to the magnet in the “Iron” box. This is the quickest way to identify what pieces of metal are iron. Another option is to look for the formation of rust on the metal. Items that are usually made of iron include pipes, cars and pieces of home appliances.
  4. Look at all the remaining metal items and find the ones that have the appearance of iron without the magnetic pull. All of these items go straight to the “Stainless Steel” box. Items made of stainless steel include beer kegs, stair hand rails and vehicle trim.
  5. Gather any old car batteries you’ve found or have laying around and place them in the “Batteries” box. Car batteries are 100% recyclable and have many reusable parts including the plastic, lead and acid.
  6. Place metal items that are red or stained green from water damage in the “Copper” box. Copper is easy to obtain from things like old electrical wiring pieces, other wire and plumbing fittings.
  7. Place items that have a yellow-tinged color in the “Brass” bin. Brass items include door knobs, car radiators, sink drains and fixtures and light fixtures.

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How To Scrap A Water Heater

Company News, How To Scrap

The Scrap Gas Water Heater

Gas Water HeaterGas water heaters are usually pretty good scrap items. I find them pretty often, and I’m happy when I do.  They are a home appliance, and classified as a light-iron/shred/mixed-metal/tin item when whole. But, there is usually a decent amount of non-ferrous scrap metal that you should first be able to pull off.

At the cap part of the heater, there may be one or two Copper pipes that sticking out, or possibly a brass connector. With a magnet, check to be sure they are copper or brass. If it sticks, then the pipe is simple iron. If not, take them off with a pipe wrench. If they are too corroded to come out, then either break them off by repeatedly hitting with a hammer, or cut off with a sawzall.

With a pipe wrench, twist off the valve sticking out of the tank towards the top. This is a mineral deposit stick, and in my experience is often copper in the gas models.

Every gas water heater has a gas regulator that is set near the base of the tank. These are made of a combination of brass and cast zinc/aluminum and have some brass knobs on them.

My yard has a special price for these gas regulators (you also find then on scrap gas grills and scrap ovens and stoves) and they are worth pulling off as they are worth at least 2x shred price, up to 4x shred steel. They are expensive to replace, so they may be worth reselling if you have the know-how.  An example regulator is pictured left, and you can see that it is quite valuable, almost 1/3 of the price of a new heater!

To remove these gas regulators quickly, all it takes is a few heavy whacks with a sledge hammer.

The Scrap Electric Water Heater

The electric water heater is less commonly found in my experience, but good for scrap none the less!

Electric water heaters don’t have gas regulators, because they don’t have use gas. (duh.) But, electric water heaters use heating elements to heat water instead of gas.

The electric heating elements are usually made of zinc plated copper or stainless steel sheathing around a nichrome wire. They are located inside of the water heater and need to be pulled out by disassembling through access bays located on the side of the appliance.

Water heaters also have what is known as “anodes” which are there for the sole purpose of getting corroded away, thus keeping the steel container from getting corroded (self sacrifice if you will). These are often made of magnesium/aluminum, and will be very corroded if you want to try pulling them out. It is my preference to not even bother.


  • Don’t bother trying to fill these with water in order to trick the scales. You will only make about roughly $30 extra, and it is so easy to catch this trick. If you are caught, your scrap yard will (or should) press charges.
  • Don’t pass up fittings. Some brass fittings may be very corroded, and can therefore be hard to distinguish, and/or hard to remove. Be sure to check all fittings with a file. And if you can’t seem to get the fittings off with a pipe wrench, then I recommend setting the heater on the ground and pulling out your sledge hammer. Most brass fittings will break of after a few good hits.
  • Don’t get caught with your pants down! Some Water heaters are made of very valuable metals (copper, brass, etc) more often then not if they are very old.
  • DON’T forget to check everything!

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Optimization; or Patience is a Virtue

Company News, How To Scrap

When I first started scrapping, I was so convinced that breaking everything down was the best way to make more money. The thought of optimization wasn’t part of the equation at that point. I would strip every thing down to the last tiny wire, squeezing every last drop of money out of each load of scrap, and then I would sell it as soon as I had a chance. It wasn’t a bad way to do things…But I was trying to optimize my scrap, not optimize my time, so I was never really reaching my full earning potential.

In a standard engineering problem, every single dynamic is accounted for in some sense and then optimized using efficient computer algorithms. I don’t have that much time or resources, so I just do the best with what I know!

Lets take stripping wire by hand for example. That may or may not be worth it depending on how fast you are at it, and how much wire, what length of wire, what you get paid for insulated wire, etc.

Sometimes it’s not always better to tear materials apart. For example, I used to strip the copper out of microwave transformers and motors. I got wise after but only a few trips to the scrap yard.  Take for example a microwave transformers weighting in at close to 10 pounds. At 30 cents per pound for copper breakage, that nets me $3.00. Great!

If I break them apart, you may get ~1 pounds of copper and ~9 pounds of steel. so at maximum that is

  • 1 pound of copper @ $3.10/lbs = $3.10
  • 9 pounds of steel @  $0.10/lbs = $0.90
  • + ten minutes to rip apart the transformer
  • $4.00 per 10 pound transformer
  • So I had $3.00, I now have $4.00.  That means I made $1.00 in ten minutes.  If I did this for an hour, with 6 transformers, I would be making $6.00/hour.

(All of that was calculation with hypothetical prices, but that doesn’t make the process I used to come to my conclusion any less valid.) Weather or not that is worth an hour of your time is for you to decide.

In some areas, scrap yards don’t pay anything for transformer except shred price. In one of these areas, you would probably want to break down all of your transformers before selling them. In other areas, they pay up to 45¢ per pound for copper transformers. In one of those areas, you would not want to break down your transformers, because they are paying you MORE then what you get for breaking them down.

But some may be saying, “Well what is wrong with making just a few extra cents per transformer? I have nothing better to do with my time then take this stuff apart, right?”

Firstly, there are so many other ways to make money scrapping, so there is always something more useful to do. Secondly, let me answer that former question with another question, “If you were to save all of those transformers for a whole year… What would they be worth then? ”

I know that If I hold onto all the transformers I get for a year, I can easily get 1500 pounds of transformers which is roughly 150 microwave transformers. If I call up my yard and say, “I have 1500 pounds of chunky copper breakage, what can you do for me price wise?” I’ll be getting more then $.30 per pound! I could easily call various yards until one agreed to pay me $0.35/lbs, which is 17% more!

If I had broken each one of those 150 transformers down and sold each separately as copper and steel, I would have made 150 transformers *$4.00 each or $600. If I sold a large heap of 1500 pounds of copper breakage (150 transformers) without tearing them down for $.35 per pound I get 1500*$.35 = $525….. So by doing nothing at all, just saving my motors until I have a larger lot, I am making more money. Am I making $600? NO. Am I making $75 dollars more, however, for doing nothing but holding onto my scrap. ($75, to put it into perspective, is the same amount of money I would have made by tearing apart transformers for 12.5 hours.)

This type of efficiency has proven very fruitful for me in the last year and a half. I saved lots of scrap copper and such, which during the recession was worth a mere fraction of it’s value today. I plan on sticking with this type of workflow, seeing as analysts don’t see the price of copper dropping below 3.50 any time soon!

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