Understanding Your Recycling Program
Managing your recycling program can be confusing, and sometimes even downright frustrating if you don't have the right partner. There are thousands of different grades of scrap material, so it's important to not only understand the material that is specific to your facility, but also understand the value, logistics, and process of how it is recycled. Finding the right company for your scrap services is the first step to the overall success of your industrial scrap management program.
What Material Do You Produce?
To some, this is a silly question, but time and time again I've had clients tell me, "We produce steel scrap" or "We produce copper scrap" or "We produce stainless scrap". While this is true, the question is, what kind?
Each grade of material may fall into a general category, but the types of material go a little deeper than just a general category. If you produce steel scrap, is it unclean sheet? is it Heavy Melt? Is it busheling? Is it plate and structural? Is it turnings? This list can go on for a while. Your overall rebate for your scrap is typically dependent on what the grade of material is. What are your volumes? When it comes to Manufacturing Steel Scrap Management, higher volumes allows you to leverage higher rebates.
Is your copper scrap considered bare bright? Is it insulated copper wire? What is the recovery?
Is your stainless 316 stainless or is it 304 stainless?
Aluminum scrap can range in grades from litho plate, to cast, to breakage.
These are all important questions to ask when you are setting up your scrap program.
Understanding The Logistics
Scrap metal recycling has a ton of moving parts. When scrap metal leaves your facility, it starts a journey to become something new, but it's not a short trip from point A to B. Having a general understanding of what happens to your material when it leaves your facility can help you understand why your current scrap price is where it is or it may help you understand that there is room for a higher rebate.
When scrap steel leaves your facility, it has to be prepared to go to the mill. Typically the material will have to meet ISRI Specifications in order to be shipped out. Plate & structural steel will have to be cut into smaller sections, heavy melt and machinery will need to be torched, sheet steel will need to be baled, and unclean sheet will need to be shredded. On the flip side of that, some grades are ready to go direct to the mill.
Once your material arrives at the scrap yard, it is offloaded into a pile and is then ready to be processed. Once sheared, baled, or shredded, it then needs to be loaded onto a truck and shipped out to the mill.
As you could imagine, some of these processes can be labor intensive, and require the material to be handled multiple times.
Understanding the process, will allow you to get a better understanding of your payback.
Knowing this process also helps clients understand the importance of keeping your material segregated by appropriate grades. If you are mixing your stainless and steel material or your aluminum and steel material, then the recycling facility must put in the extra work to separate the material at their facility. The cleaner the material is, the more room there is for higher rebates.
Know The Markets
If you produce scrap at your facility, you should have monthly communication with your buyer on what the current state of the market is. All of our Industrial Scrap Management clients are given program specific updates on a monthly basis which includes where the scrap market is for the month, what their rebate is, as well as other market indicators. Having open and clear communications with clients on their industrial scrap allows them to better understand their rebates.
Copper scrap management programs as well as stainless steel scrap management programs require daily and sometimes hourly attention to global markets and economic current events. Your scrap management servicer should have frequent communications with you on the current state of the market as well as recommendations for gaining the highest rebate possible.
Finding The Right Partner
Wether you go direct, work through a broker or a waste stream management company, finding a scrap company that works on your behalf and as your partner is key to a healthy scrap program. A third party broker can do several things for your company. They can have your commodities tied to a publication if appropriate, they can create healthy competition among processors, and they can even leverage their overall tonnage to command a higher price for your material. Scrap brokers also tend to work on lower margins thus passing the extra rebates onto their customers. They can also stay on top of service related issues which can cause unwanted stress on our staff.
S&F Development works to represent our clients in the market, which is why we work in full transparency. This allows our clients to have higher returns, accurate reporting, continuous improvement, and top tier service.