Turning metal into cash

September 8, 2014 Posted by admin

Shredder-feed pile

Shredder-feed pile

A shredder-feed pile at Metro Iron Metal in Mineral Wells includes old cars, washers and dryers.

Bare bright copper

Bare bright copper

Bare bright is one of a few different types of copper purchased and resold by Metro Iron Metal. Compared to other grades, this spec trades at the highest premium.



Posted: Saturday, September 6, 2014 7:00 pm

Turning metal into cash

By KIM BENESTANTE
Special to the Index

MineralWellsIndex.com

Prices for scrap metal can, and should, vary widely in price due to the vast amount of different types, cuts and specifications of these shiny elements – important factors to consider ahead of deciding how and where to resale old metal, a longtime metal recycler explained recently from his shop in Mineral Wells.

“You can make good money scrapping if you have good sourcing” for selling, said Duane Jones, owner of Metro Iron and Metal. He also owns a larger metal recycling facility in nearby Bridgeport.

Like other industries, there are some nefarious shops Jones has seen over the years that take in and resale scrap metal with the intent of making money by taking advantage of people who don’t realize the value of what they’ve got. Precious metals can look the same but have big price differences.

For example, the spot price of gold futures for prompt delivery is around $1,287 a troy ounce; the price of platinum in the same time period is almost $150 more; white gold and platinum look almost identical to the naked eye of a non-expert. Scrap metal pieces may be indistinguishable in appearance, but have divergent values.

The metals’ aftermarket is somewhat regulated in Texas, but ethical business practices mostly are the responsibility of individual scrap metal operators. Selling old cars to scrap recyclers in Texas is heavily regulated, Jones noted, explaining that a title is needed to sell a car to a metal recycler; yet as a result, many old, non-working vehicles can’t be scrapped and typically end up laying around as eye sores.

“In Oklahoma, you can scrap a car without a title if the car is older than 10 years,” Jones said. “We really need something like that here. It really cleans up the county.”

For the less-regulated scrap taken in at his facilities, Jones has implemented assorted systems of checks-and-balances to ensure customers receive the most accurate prices for their metal, he said, including a large digital scale on which customers can drive to weigh their items; “that helps with the trust – knowing they’re getting a fair deal,” he said about the procedure in which cars first are weighed with metal, and then without to measure the density of scrap being sold.

Once inside Metro’s 4-acre campus in Mineral Wells (Bridgeport’s facility sits on 6 acres), there are dozens of segregated boxes (each labeled with its contents) and mammoth piles of metals of all shapes, sizes, colors and weights – all (somewhat surprisingly) very organized and neat – even clean.

“We’re constantly sweeping the (outside concrete) floor with a magnet to clean up the nails,” Jones remarked about one of the housekeeping procedures at the facility.

Metro has been in business four years, Jones said, having initially opened his Bridgeport plant eight years ago.

“At the time, there weren’t really any facilities in the area,” he noted. But over the past decade, the scrap metal recycling industry has grown in tandem with the economic boon of the oil and gas business in Bridgeport. Located in the heart of the Barnett Shale, the town has become a major hub for drilling operations.

There are so many industrial companies that have located regional headquarters to Bridgeport that Jones has installed about 100 so-called roll-off containers for assorted customers in the region. These massive steal containers are available in three sizes: 30-, 40- and 50-cubic feet. The units are “rolled off” Metro trucks on to customers’ properties and filled with discarded metal (like pipe-fitting scrap for example) and picked up by Metro once the containers are full, with the scrap recycler swapping the full units with empty containers for customers to resume filling.

Jones’ plants take in about 120 tons of scrap metal daily, he said – enough to have a fleet of three trucks expediting loads twice a day.

The Texas oil and gas resurgence has drawn many others into the scrap metal business.

“There’s a lot of competition out there in recycling,” Jones said, “more so than ever.”

He said he and his staff focus on building customer service to encourage repeat business. Good service also means keeping the facilities well organized: on one side of Metro’s campus is a huge pile of what Jones refers to as “shredder feed” – old cars, washing machines, dryers – any light-gauged tin, he explained, that will literally be fed into a shredder for further demolition.

Opposite the shredder-feed pile are two large separate piles of steel chunks. One is a “long-iron” stack consisting of material that’s at least a quarter-of-a-foot thick and at least 4-feet long of items that must be cut down further to bring optimal market value. Next to that pile is a hill of “short-iron,” metal that has been cut into steel chunks no more than 3-feet long.

Because short-iron is smaller, it is easier to melt down and, consequently, fetches the highest premium at the mills, Jones explained, adding the closest steel mill is the Gerdau plant in Midlothian. Gerdau subsequently takes the short-iron and turns it into structural material. The material is sold by the ton, and currently brings about $220 per net/ton, Jones said. There are still more specifications of short-iron, he explained, with Number One short-iron being worth the most because it is free of so-called contaminants that contain cast iron (like car parts for example). Number Two short-iron might have some cast impurities and trades at a discount versus Number One, Jones said.

Among the non-ferrous material Metro purchases are electric motors, compressors, aluminum (all types), copper, brass, radiators and air conditioners, Jones said, noting copper and brass also are among the most regulated commodities.

The metal recycler must document all of the copper and brass it receives and generate requisite compliance reports to the state in the event the metals are stolen, Jones explained. Cameras also are installed throughout the facilities, and customers must show acceptable photo identification to sale regulated commodities like copper and brass, he said.

Brass is sold by the pound, and is currently trading at about $1.75 per pound. Metro also has separate containers of different grades of copper: Bare Bright is the shiniest (and prettiest), bringing the highest premium at about $2.80 per pound; Number One copper (a bit less shiny) trades at $2.70 per pound; and Number Two-grade copper includes some impurities, trading at about $2.50 per pound.

Keeping grades of assorted metals segregated, labeled and neat has “paid off” in attracting repeat business from customers, Jones noted.

“We just try to treat people the way we want to be treated by grading material correctly,” he said.

Kim Benestante is a freelance writer for Texas Rural Recycling. If you know someone – a business or an organization making steady efforts to recycle in Erath, Palo Pinto or surrounding counties visit www.texasruralrecycling.com to submit information, or email kimbenestante@texasruralrecycling.com.


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Saturday, September 6, 2014 7:00 pm.

Article source: http://www.mineralwellsindex.com/news/turning-metal-into-cash/article_9d7fe272-3540-11e4-acb2-001a4bcf887a.html

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