In the $32B salvaged metal business, one person’s crap is another person’s scrap
Thanks to the rising cost of mining for raw metal, scrap metal has become an increasingly valuable commodity.
And while the market for previously used metal may not be shiny, it is sizable: In the US — the world’s largest producer of trash — the scrap metal business is a $32B industry.
But the industry gets even more metal: Much of this massive metal market is powered by trash-preneurs who collect pieces of garbage from America’s post-industrial wastelands and resell them for profit, The New York Timesreports.
So, how does scrapping work?
Scrappers drive around cities — often postindustrial, Rust Belt cities like Buffalo or Pittsburgh — and collect scrap metal before garbage trucks can get to it.
Then, they process their scrap, breaking it down into smaller, more valuable components. Scrap buyers usually pay 3x as much for scrap that has already been processed.
In the world of scrap, copper is king
Scrappers collect mostly metal — instead of, say, plastic or paper — because it’s the most valuable product to recycle.
But not all metal is created equal: Copper, which is in particularly high demand because it is used in everything from electric cars to local power grids, is particularly valuable.
Many scrap-preneurs use an app called iScrap, a price index for precious metals that helps scrappers decide whether to sell their metal immediately or hold out for a better price down the pipeline.
To the run-of-the-mill amateur recycler, professional recycling may seem niche. But, according to The Institute of Scrap Recycling Industries (ISRI), the scrap biz employs more than 531k workers.
These scrappy scavengers send scrap all over the world
Most American scrap metal comes from manufacturing towns that have grown rusty in the decades since their factories shut down. But the copper reclaimed from those towns shines again in sheets sent across the world.
China has traditionally been a big buyer of ’Merican metals, but since it began restricting recycling imports in 2017, American metal merchants — some of whom are 4th-generation scrap magnates — have shifted their focus to metal-hungry India.
The domestic market is huge, too: In 2017, ⅓ of the copper consumed in the United States came from scrap.