Scrap metal works on supply and demand, but other factors such as speculative investment funds have recently impacted prices more dramatically. Funds continue to move the commodity markets

up and down with their movement of money in and out.

Some of the recommendations and considerations for IR practitioners included:

Become Your Own Expert: Know the alloys common to your industry and become knowledgeable about the properties of items you sell frequently. For example, transformers have the potential for containing seven different types of metals. Competitive bidding will normally narrow down the companies who can give you the best value for these items.
Beware of Environmental Pitfalls: Getting the best price can be more than negated by environmental mishandling. For example, selling leadcovered copper cable containing PCBs to a company not permitted to handle this type of material can lead to fines and costly cleanup.
Published Price Caution: Although you can reference pricing from publications and online sources, you can’t expect to always get these prices. Values can vary regionally and by individual situations.
Current Market: The current supply of scrap is dramatically reduced due to the lack of manufacturing. Much of the scrap that is being generated is being sold at very competitive prices based on the current market conditions. There are still items without demand because there is too much supply and little demand – steel and aluminum are examples. However, the shortage of copper has kept the pricing strong.
Reprinted from ASSET 2.0, the Investment Recovery Business Journal, Vol. 2, 2009

© The Investment Recovery Association