Scrap Metal And Investing Question

[Raider Nation Fisher]

As a electrician I often get to scrap out aluminum and copper. My queston. If I were to turn said metal into ingots would they only be worth scrap value or market value?

Scrap question 2. Why exactly is the price different for dirty copper and clean copper? I get the insulated vs uninsulated, but the is for stripped copper.(not burned)

Scrap question 3. Why does smaller guage wire pay less per pound then larger guage wire? I mean in theory you should be able to load down more smaller guage wire into a container or truck then you can larger guage wire. So wouldn't that be more to the scrap yards liking?

Investing question 2. If I were to invest in Aluminum or Copper on the commodities market. Is it possible for me to get the actual metals? Or would I just get a piece of paper?

[tipptruck1]

I feel bad I don't know more about this. My dad was a welder after all. The only one I can sort of answer is number 2. Any clean metal is worth more then dirty metal. It is that way because they have to pay to remove what ever is on it. If your stripping the wire. Many places I know would call that clean metal. Same if you brought in a aluminum car rim. Just remove the tire, valve steam, and weights. I am sure sir snook will be able to help you better.

[SirSnookalot]

As a electrician I often get to scrap out aluminum and copper. My queston. If I were to turn said metal into ingots would they only be worth scrap value or market value?

Scrap question 2. Why exactly is the price different for dirty copper and clean copper? I get the insulated vs uninsulated, but the is for stripped copper.(not burned)

Scrap question 3. Why does smaller guage wire pay less per pound then larger guage wire? I mean in theory you should be able to load down more smaller guage wire into a container or truck then you can larger guage wire. So wouldn't that be more to the scrap yards liking?

Investing question 2. If I were to invest in Aluminum or Copper on the commodities market. Is it possible for me to get the actual metals? Or would I just get a piece of paper?

You ask a lot of questions, my answer is to forget about it.

1.  It would be worth market value, but how are you going to turn it into ingot.  Many users do not use ingot anyway, coils for stamping would be an example and most items are not pure copper but alloys, cadmium copper stampings was a big item I dealt with.  Who would you sell it to and can you get enough, a small sale is 10,000#.

2. Dirty doesn't mean anything, it's just a way that a mill will downgrade your material so they can buy it cheaper. Having other items attached is a different story like steel attachments, flux from radiators, items are bought cheaper unless they are "cleaned up".  Insulated wire that is thin usually gets burnt, the clean copper is worth more than insulated copper.  Cable and welding usually gets stripped, it can be done by hand but slow and tedious, a stripping machine is recommended.  Reason heavier wire is worth more, when melted at the refiner there is more copper loss up the flue with light wire.

3. For argument sake We'll call the copper spot price $3.00 lb, a contract is 25,000#, that's $75,000.  Settlement due by the end of each trading day.  I'm not a commodites expert in trading but I do know that not only could you lose the entire 75k, but you could lose additionally money as well, don't do it if you are not a big player.  You could buy 25,000# of copper, now you have to store it, have a wharehouse and material handling equipment?  I could understanding holding for price speculation, but it costs money to hold it and the copper market was about $3.45 a year ago.  It can be real tricky, an example is when selling a load of metal to a refiner or mill (they will buy from anyone) you have to place an order for a certain weight amount. Will call it 20,000#, if you are short weight you get penalized on the price, too much weight penalty as well, and if not on time another penalty.

 

I don't want to discourage you, I made a nice living in the scrap biz for 35 years, but it was a full time business.  I would suggest selling what you accumulate as soon as you get it at your local scrap yard and be done with it. Going for the short buck is going to make you more money in the long run.  The cost of being in business can be pretty high, even on a small scale an adequate med duty (30,000 gvw) truck isn't cheap, a small shop, insurance, material handling equipment, plus without at least 20 good accounts that are serviced regularly, there just won't be enough money coming in.

 

I may have typed a lot, but I only barely scratched the surface.

[Rivers Edge]

Follow SirSnookalot advice.

[Root beer]

Investing question 2. If I were to invest in Aluminum or Copper on the commodities market. Is it possible for me to get the actual metals? Or would I just get a piece of paper?

 

There is another way that different from SirSnook's example, but it's not as simple as you think. I got a gut feeling your thinking of investment in commodities is a world apart from reality. You don't want know how crazy the derivative market is and how it really works. And I don't think anyone on here wants to know. lol. I say just follow SirSnook's advice on scrap metal and move forward. 

[SirSnookalot]

I understand the gist of questions.  Some years ago we had a member on here interested in supplementing his income while in school by wanting to acquire lead wheel weights from tire shops.  When the markets are high every Tom, Dick and Harry is out there trying to do the same thing.  When the markets crash, and they will again as they always do, Tom and Dick are no where to be seen and Harry is lucky to make expenses.  

 

I have encountered many electricians over the years, most will not acquire enough material other than adding some pin money to their pocket book.  I know to the layman a few thousand pounds sounds like a lot of stuff, it really isn't.

 

I would suggest diverting attention away from copper as people treat it like gold, hard to make a buck at it, radiator shops are the toughest.  The very best thing to buy is aluminum and stainless (get a magnet), the more contaminated the better, people treat that as garbage and it can be bought for a song, or get it free.  One of the main reasons Tom and Dick disappear is that their vehicle isn't capable of handling quantity and many times it's broken down anyway.  They also lack the buy money, I never left the house with less than 5-10K in my pocket, many times it's cash on the spot, ya gotta be ready.  Being retired I don't do that anymore........lol.  If you want to be a professional at it, be a pro or forget it altogether.

 

Commodites trading, futures or options is an entirely different ballgame, I don't suggest that to anyone.