Scrap yard businesses in Melbourne, Victoria, operate within a regulated environment designed to ensure legal and environmentally sound practices. These regulations cover everything from licensing to environmental compliance and are critical to a successful business.
Getting Started: Licensing and Legal Requirements
To open a scrap yard in Melbourne, you must first register as a second-hand dealer with the Business Licensing Authority. This is a mandatory step for anyone involved in the scrap metal industry. While some auto wreckers may also need a motor car trader’s license, being a registered second-hand dealer is the foundational requirement for a scrap yard that buys and sells car parts and scrap metal.
Key Regulations in Victoria
- No Cash Payments: Victoria has a strict law prohibiting cash payments for scrap metal transactions. All payments must be made via electronic funds transfer (EFT) or cheque to create a clear and traceable financial record.
- Record-Keeping: You are required to keep detailed records of all transactions. This includes the seller’s name and address, proof of identity, a description and weight of the scrap metal, the date and time of the transaction, and a copy of the payment method.
- Motor Vehicles: Specific rules apply to scrapped vehicles. If a vehicle is 15 years old or younger, it must be entered on the written-off vehicle registry as a statutory write-off. In all cases, you must verify the vehicle isn’t stolen and take photographic evidence of its identifier.
Environmental and Waste Management Regulations
Operating a scrap yard involves managing various waste materials, and Melbourne has stringent environmental regulations to prevent harm to human health and the environment. The Environment Protection Authority (EPA) Victoria oversees these regulations.
- Permits and Permissions: Depending on the scale and nature of your operations, you may need specific permits or permissions from the EPA. This is particularly relevant for activities involving large-scale waste and resource recovery.
- Hazardous Materials: Businesses must follow strict guidelines for storing, transporting, and disposing of hazardous waste, such as lead-acid batteries and other e-waste. Improper disposal can lead to significant fines and reputational damage.
- Waste Segregation: You are legally required to separate recyclable materials, like metals, from general waste. This is a crucial step in the recycling process, ensuring that materials are processed correctly.
Scrap Metal Market and Pricing
The scrap metal market is dynamic, with prices fluctuating based on global demand and economic conditions. Prices are typically listed per kilogram (kg) and can vary significantly between different types of metals.
- Ferrous vs. Non-Ferrous: Metals are generally categorized into ferrous (containing iron, like steel) and non-ferrous (like copper, aluminum, and brass). Non-ferrous metals are typically more valuable.
- Common Prices (as of late 2025):
- Copper: Often the most valuable, with prices for clean copper reaching around $10-$13 per kg.
- Aluminum: Prices for various aluminum types range from $1-$3 per kg.
- Brass: Clean brass can fetch around $5.40-$6.20 per kg.
- Steel: Heavy steel prices are significantly lower, usually between $0.20-$0.26 per kg.
- Batteries: Lead-acid batteries have their own price range, typically $0.30-$0.60 per kg.
To maximize profits, scrap yard operators should stay informed on current market prices and ensure the scrap they receive is sorted and cleaned of contaminants. Building relationships with buyers and maintaining a high level of purity in the materials can also lead to better pricing.