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Upstream steel: Where does scrap metal come from?

Scrap metal is made up of recycled steel that is no longer viable in its current state, yet still holds significant monetary value. There are several different sources of scrap metal, the most popular of which being people, machine shops and manufacturers, and the government.  Recycling rates in the US are rising rapidly, providing large returns to our economy for years to come.scrap_chart_2

Individuals make up for a large portion of the scrap metal reserve around the world. With the growing amount of consumption across the globe, there exists a valuable resource on which economies can capitalize. Aluminum cans, old bicycles, and used cars for example make up just a small portion of the vast amount of recyclable steel products that citizens produce.

Another avenue that generates large amounts of scrap metal is machine shops. Any manufacturer that uses large machinery will inevitably require new equipment due to depreciation or related technical issues, and would greatly benefit the economy as well as the environment by recycling. These manufacturers also accumulate tons of excess metals from the products that they produce. When one ton of steel is recycled, there’s an opportunity cost saving of 2,500 pounds of iron ore, 1,000 pounds of coal, and 40 pounds of limestone.

Lastly, the government uses and creates an immense amount of materials that could potentially turn into recycled scrap metal. With their stockpile of guns, ammunition, tanks, sea vessels, and aircrafts, the US government produces a large amount of recyclable metals such as copper, brass, steel, and aluminum. In fact, the US government is the single largest producer of scrap metal in the country.


  1. johnsg16 johnsg16

    Here is an interesting link on how they measure efficiency of recycling of scrap metal. It is pretty long, so I mainly just skimmed it, but page 21 has a great picture of recycling efficiency rates and some good explanations, and you can look at the efficiency of iron as a proxy for some of this because a lot of times you have to just get the base element and then reuse that to remake steel, or you can reuse the steel if the recycled metal meets certain qualifications which I am just starting to read about.

  2. I’ve blogged here on car recycling, including assorted photos. It’s a dusty, dirty, noisy process but amazing in the ability to recover all sorts of materials. If you look, you’ll also find stuff on recycling ships, a lot of which for example are run aground in one small piece of beach in India, upon which a horde of workers descend with cutting torches…

  3. Katie Katie

    Waste and scrap is a big business in America, accounting for 1.3% of US exports. Lately there has been a surplus of recycled scrap materials. The strong US dollar has made exports pricier, and the slowing Chinese economy has reduced overall demand. Turkey, whose steel mills initially purchased large amounts of US scrap metal, has switched over to purchasing scrap steel from Russia and other countries with weaker currencies. The price of shredded scrap steel has dropped 18% so far this year and is down 41% since early 2012.

    • I’ve looked but been unable to find a graph of prices through the current up-and-down cycle.

  4. Tyler Kaelin Tyler Kaelin

    My question is how regional is the recycling of steel scrap? It seems to me that being able to efficiently separate varying kinds of materials from things like cars, large machinery, and other items, you would need rather complex machinery and large sorting areas.

    However, obviously all of this scrap is very heavy, and moving it around must contribute substantially to its cost. Some kind of map displaying steel recycling facilities and their relative capabilities/capacities would be interesting.

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