Have you considered starting a scrap metal recycling business? Although this is a capital-intensive business, requiring between $2,000 and $10,000 of start-up capital, and you’ll need to have a lot of technical knowledge, it’s also quite lucrative. Regardless of whether you want to recycle copper, gold, lead, nickel, silver, or tin, there are some things you must know to get your business up and running.

The scrap metal recycling industry has become a billion-dollar industry. 90 tons of metal is recycled and reused every year. Humongous costs and natural resources of the country get saved this way. Scrap metal is broken into individual metals through recycling. It is a fast, convenient and economical process.

There is a scope for doing scrap metal removal business as well. You can sell the unwanted metal to these industries and make profits. So if you don’t want to set up an industry, you can make money by scrap metal collection and selling. You can go through the best guide for starting a recycling business for further help.

What is Scrap Metal Recycling?

Scrap metal recycling is the recycling of recyclable metal and materials. These metals are recovered and processed when they can’t be used as a product. Recycled scrap metal serves the purpose of raw material for new production.

So your old soda cans and cooking pans can now serve as the raw material for a new product. You can bring in the scrap metal for recycling in scrapyards, curbside pick-ups, home pick-ups, and mall-in.

What Is the Process of Scrap Metal Recycling?

Here is a step-by-step guide on the processing of scrap metal recycling:

  1. Preparation

    Spot a place where you can get a deal for your scrap metal on fair terms, such as a nearby scrapyard. When you bring the metal, separate them according to their type. You can use a magnet if required.

  2. Collection

    You can now bring the metal to the scrap yard for weighing in. Some scrap dealers run curbside recycling services and scrap metal collectors services for your convenience.

  3. Sorting

    Scrap yards separate materials through visual identification, magnets, electric current, and spectrometer. Products with mixed metals need to be dismantled to obtain different metals and materials.

  4. Processing into Forms

    The scrap metal is ordered in particular weight, size, and shape. The scrapyard prepares the metal by torching, shredding, or baling to size and processes it according to the order received by the customer.

  5. Melting & Refining

    Melting and refining is the process of separating impurities from the metal. The impurities rise to the top through melting. Some metals require additional refining, like electrolysis. This purifying process makes the metal as good as its parent metal.

  6. Solidifying

    The metal is solidified after the purification through melting and refining. It is solidified according to the shape required for the end product. It can be sheets, coils, bars, etc. In some metals, chemicals are added to make them denser or change their properties.

  7. Manufacturing

    After going through all these steps, scraped metal finally goes for manufacturing the end goods. Robotics, public projects, automakers, and the consumer goods sector are some of the leading industries that benefit from scrap metal recycling.

Read more – Best Guide for Starting a Recycling Business

There are certain essential aspects to remember before starting a scrap metal recycling business. They are as follows –

  • Research your target market.

  • Analyze demand and supply ratio.

  • Find out the possible sources of scrap metal.

  • Study the current practices of scrap metal recycling center.

  • Research current trends, plus legal and tax issues.

  • Make sure you know the VAT rules for transactions concerning scrap metal.

Keep this checklist handy for a smooth transition in the scrap metal recycling business. It may seem like a lot of work, but this is the beginning only. These efforts are all worth it as there are immense benefits of metal recycling. And it gets easier and simpler with time.

What Are the Advantages of Recycling Metals?

There are several benefits of recycling metals, namely environmental, energy and economic. By understanding these 3 benefits, you will really begin to appreciate why you should include recycling metal as a part of your everyday life:

Save Energy By Recycling Metals

Image Source : allconnect.com

Environmental Benefits

Producing metal is an elaborate process which involves the emission of a lot of poisonous gases. This is because metal is not available in its pure form in nature. When compared to extracting metal ores, recycling releases fewer gases into the atmosphere. When you recycle metal, you are reducing air pollution considerably.

This also means you are contributing to the general health of everybody who breathes non-polluted air. If metal recycling is done by everybody, greenhouse gases that are released into the atmosphere can be cut down by almost 500 million tons.

Conservation of Energy

Other than gas emissions, the process of metal extraction consumes a lot of energy. It consumes precious natural minerals as well which are dwindling with each passing year. Using recycled metal allows industries that extract metals to do less of that. This in turn reduces the amount of energy they would use to obtain metal.

On the other end of the spectrum, extracting metal from recycled metal is a far simpler process. Recycled metal is already in its final form and does not need any extraction. It is sort of like getting ready to eat leftover pizza. The pizza is already prepared – you only need to heat it and your snack is ready!

Job Creation

To really understand how awesome metal recycling is, one needs to look at the bigger picture. For a long time now, our economy has been struggling to create jobs. For a given quantity of scrap metal, incineration would create a single job while recycling would create 35 times more employment.

To quote an example: if a ton of scrap metal could be burnt by ten individuals, it would take more than 350 workers to recycle the same amount of scrap metal. As things stand, the recycling industry is already generating more than $200 billion in revenue!

Let us take you to by step-by-step guide on how to start a Scrap Metal Recycling business!

  • Setting up Shop

    Before you head out and start investing money in your new business venture, make sure you talk to an attorney and learn about what licenses and permits your town requires you to have. You also need to know how to handle things like taxes (e.g. registering your business with the IRS and handling accounting). There are also websites available that will tell you what you must do to run this type of business.

    It doesn’t matter where you find the information. What matters is that it’s correct and you follow it to the best of your ability. You must do all of this before moving on to the next step.

  • Invest in Your New Business

    Once you have all your paperwork in line, there are some monetary investments you must make:

    • Protective gear including heavy gloves and a jumpsuit to protect your hands and clothing
    • Recycling management computer software
    • Advertising materials, such as business cards and flyers
    • Scrap metal haulers and containers for sorting and transporting the metals
    • Containers for sorting and transporting the metals
    • A storage unit or trailer with plenty of room (maybe even a yard too) for sorting the metals. Make sure it’s secure so that your metal isn’t stolen before you can exchange it for money.
    • A truck, van, or SUV that’s large enough for transporting the metal. It must not only be in good condition, but it must also have an interior that rust and sharp metal edges won’t damage.
    • Insurance coverage for your vehicle is important, as is insurance on your property, especially if your site is open to the public because then you may have liability issues.
    • It is crucial to gain knowledge about the USA government’s laws and regulations regarding scrap metal recycling. You can go through this interactive map informing you of every jurisdiction’s all-metal recycling laws.
    • Once you are aware of the law, you must prepare a list of mandatory permits and licenses. You can acquire these licenses yourself. And you can also hire a legal consultant to help you with the paperwork and formalities.
    • It’s just as important to get your business insured as it is to secure the license. Find out the suitable type of insurance for scrap metal recycling and take it before starting your operations.
  • Start Collecting Scrap Metal

    Once you have everything you need, it’s time to start collecting scrap metal from businesses, homeowners, and construction sites. To reach out to these sources, you’ll want to advertise in your local newspaper, as well as on online websites e.g. Craigslist. As you engage in advertising, make sure you watch the market as the price of metal fluctuates regularly. You not only need to know what the different types of metal are but also what people are paying for them.

    You also want to have metal collectors and processors, e.g. local scrap yards and recycling centers, lined up to sell your scrap metal too. Sometimes you can also sell to others simply by advertising what you have available. Herein you’d engage in yet another business: operating a scrap yard that’s open to the public during certain hours.

    scrap metal recycling process

    Don’t forget to check out these spots around your community for a regular supply of scrap metal –

    • Nearby Residential Societies & Apartments
    • Local Businesses and Offices
    • Construction Sites
    • Garages & Auto Repair Centers

    It is essential to know that all kinds of metals is not recyclable. Following is the list of the type of metal which is recyclable –

    What metals can be recycled

    • Aluminum
    • Steel
    • Nickel Lead
    • Cast Iron
    • Brass
    • Tin
    • Zinc
    • Copper

    Metal that can’t be recycled

    • Mercury, in fluorescent light tubes
    • Some automobile parts
    • Motor oil and paint cans
    • Propane gas tanks
    • Radioactive metals such as Plutonium and Uranium
    • Lead is often found in cathode ray tubes in old TVs
    • Pots and pans

    Also, Read – Recycling Aluminum Cans & Aluminum Foil

  • Keep These 5 Challenges in Mind and Overcome Them

    You’ll face challenges along the way, just like any other business. By keeping these in mind, you can do your best to avoid them along the way. These include:

    • Metal is sharp and you must handle it with extreme care so you don’t injure yourself.
    • Some scrap metal is too bulky so if you don’t have a crane or pulley available, don’t collect things like scrap motor parts and zinc.
    • This is a time-consuming business because you must sort all the metal before recycling it.
    • Toxins, such as lead, are present, which can result in serious health issues such as lead poisoning.
    • It takes a lot of time, money, and work. Set up a schedule and stick to it so that you can slowly grow a profitable business.


Frequently Asked Questions regarding Scrap Metal Recycling:

  1. What Metals Can Be Recycled?

    All types of nonferrous metals can be recycled. The most common are aluminum, nickel, zinc, brass, stainless steel, lead, copper, etc. They are primarily used in manufacturing household appliances, keys, wires, silverware, etc.

  2. How many times can you recycle a metal?

    That depends on what metal you have. Almost all nonferrous metals like aluminum and steel can be recycled endlessly. Glass can also be recycled infinite times. However, plastic can be recycled 6-7 times only.

    Do not miss out on our post on Plastic Recycling Process!

  3. Can I Recycle Rusted Metal?

    Rusted metal can be recycled. But it won’t weigh as much as non-rusted metal because of the degeneration. And the value of metal depends upon its weight, so you get paid less for rusted metal.

  4. How much money can be made by recycling?

    Metal recyclers pay by the pound. So your earnings depend upon the kind of metal you find and in which weight. A soda can provides less metal than a dead battery. Also, nonferrous metals are more valuable than ferrous metals for apparent reasons.

  5. Can scrap metal be recycled in the curbside recycling bin?

    Yes, you can! But certain non-recyclable metals are not supposed to be in the curbside recycling bin. Contact your recycling provider for clarification and any other important rules you need to follow in your area.