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Providing the Profits

When it comes to volume, ferrous scrap is the undisputed king of recyclable metals. But for many scrap processors, the nonferrous metals provide the profits that make operating all of their equipment worthwhile.

Measured in cents per pound, ferrous scrap cannot approach the price ranges reached by aluminum, copper and other nonferrous metals (to say nothing of the precious metals component of the nonferrous segment).

When it comes to nonferrous metals, the price paid at the scale and the offers accepted from smelters produce the margins that many scrap processors watch most closely. A comfortable spread on used beverage cans (UBCs) or a truckload of copper scrap can make for a profitable set of transactions.

One auto shredder operator I recently visited quite candidly noted that while observers think of auto shredders as ferrous processing equipment, achieving profits in the auto shredding business depends on nonferrous metals recovery and separation.

This conclusion has not escaped equipment makers, who bring to market on a regular basis new technology and machinery designed to separate nonferrous metals from mixed streams; to recover nonferrous dust or fines; and to more efficiently process nonferrous scrap.

The dependability of the nonferrous side of the market has been revealed during the recent trough in scrap pricing. Even as prices for aluminum and copper were, in many cases, limping along at historic lows, scrap dealers still aggressively chased what scrap copper and aluminum could be found on the market.

Lower prices may offer thinner margins, but most scrap processors did not want to be left out of the nonferrous scrap processing equation.

In the 1999 Recycling Today Nonferrous Scrap Supplement, we spotlight aluminum and copper—two of the most commonly traded nonferrous metals—and the global markets they are linked to. We also take a quick look at a variety of other metals traded by scrap dealers.

Both the supply and demand side of nonferrous metals such as aluminum and copper provide endless sources of speculation as to the long-term future of the metals. One thing that probably can remain above speculation is the fact that nonferrous scrap processing will continue to pay the bills—and provide some profits—for many recyclers.