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Scrap metal, explained from first principles
Not how to use ScrapTrade specifically, and not a sorting checklist. This is the plainer question underneath both: what scrap metal actually is, why anyone pays for it, and how that price gets decided in the first place.
Why this feels confusing at first
"Everyone in this industry talks like I already know the basics"
"Someone mentioned 'grade' and 'yield' to me like I was supposed to already know what those meant. I just have some old pipes I want to get rid of."
Scrap metal trading has its own working vocabulary, built up over decades by people who deal with it daily. None of it is complicated once explained plainly, but almost nobody explains it plainly to a first-timer. That's what this page is for.
Why scrap metal is worth anything at all
The short version: turning scrap back into usable metal is almost always cheaper and less energy-intensive than mining and refining brand new ore. A steel mill or a copper refiner would rather buy clean scrap at a discount to virgin metal than pay the full cost of extracting and processing raw material from the ground. That cost gap between "recycled" and "brand new" is where the value of your scrap actually comes from. It isn't charity, and it isn't waste management. It's a genuine input cost saving for the buyer.
How the price is actually decided
There is no single official "scrap metal price" the way there might be for something with one listed market rate. Instead, prices reference underlying commodity markets, like the London Metal Exchange for base metals such as copper and aluminium, and then get discounted from that reference number for a few practical reasons:
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Grade and purity
A load of clean, single-alloy material sells closer to the reference price than a mixed or lower-purity lot of the same base metal.
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Contamination and prep work needed
Insulation on wire, rust on steel, or non-metal parts attached to a piece all mean the buyer has cleanup work ahead of them, which they'll price into their offer.
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Local supply and demand
A buyer with plenty of a material already on hand offers less for more of it than a buyer who's actively short of that same material right now.
Want to see current reference pricing across common categories before you sell?
Check live pricesWhat actually happens to it after you sell it
Once a buyer takes possession, the material is typically sorted further, then physically processed, shredded for smaller mixed items, baled for lighter material like cans and sheet, or granulated for wire and cable, depending on what it is. From there it's melted down at a mill or foundry and reformed into new raw metal, which then goes back into manufacturing new products. A drink can, in principle, can become part of a car panel, a construction beam, or another drink can, repeatedly, which is the basic loop the entire industry runs on.
Exactly how a specific load is processed depends on the material, the buyer's equipment, and local infrastructure. This is a general description of the loop, not a claim about what happens to every individual transaction.
A short glossary of terms worth knowing
Grade
A description of a material's purity or quality, such as the copper content of a wire lot or the specific alloy of an aluminium batch.
Yield
The proportion of a load that is actually usable metal once contamination and non-metal content is removed.
Dross
The oxidised, lower-value material that forms on the surface of molten metal during melting, generally worth much less than clean metal.
Ferrous / non-ferrous
Whether a metal contains iron (ferrous, magnetic) or not (non-ferrous, generally higher value). See our full category reference for details.
Frequently asked questions
Why is scrap metal worth anything at all?
Because turning scrap back into usable metal is generally cheaper and less energy-intensive than mining and refining new raw ore. That cost saving is what buyers are actually paying for when they buy scrap.
Is there one official global scrap metal price?
No. Prices reference commodity markets like the London Metal Exchange for the underlying metal, but the actual price paid for scrap is discounted from that reference for grade, contamination, and processing needed, and varies by buyer, location, and material condition.
What does "grade" mean when talking about scrap metal?
Grade describes the purity and quality of a material, such as the copper content of a wire scrap or the alloy type of an aluminium lot. Higher-grade, cleaner material generally commands a better price than a mixed or contaminated lot of the same base metal.
What actually happens to scrap metal after it's sold?
It's typically sorted further, processed (shredded, baled, or granulated depending on the material), and melted down at a mill or foundry to be reformed into new metal products, which can then be manufactured into anything from car parts to construction steel.
Ready to put this into practice?
See how the basics translate into an actual listing, or check what your material category is trading at right now.
Related reading: Scrap material categories · Getting started guide · Sell scrap online