The scrap metal market in Melbourne is diverse, handling a wide range of materials from household items to industrial waste. You’ll typically encounter two main categories of metals:
- Ferrous Metals: These contain iron and are magnetic. They include things like steel from old cars, appliances, and construction materials.
- Non-Ferrous Metals: These don’t contain iron and are non-magnetic. They’re often more valuable and include metals such as copper, aluminum, brass, and lead. You can find them in wiring, window frames, car parts, and batteries.
Prices for scrap metal fluctuate based on global market conditions, so it’s essential to stay informed. A quick check of current prices in Melbourne shows that non-ferrous metals like copper and brass command significantly higher prices per kilogram than ferrous metals like steel.
Starting Your Business: A Step-by-Step Guide
- Market Research and Business Plan: Before you begin, conduct thorough research. Identify your target customers—will you focus on residential cleanouts, industrial clients, or both? Develop a comprehensive business plan that outlines your services, pricing strategy, and financial projections.
- Registration and Licensing: In Victoria, anyone dealing in scrap metal must be a registered second-hand dealer. You must apply for registration and an endorsement for scrap metal. It’s crucial to comply with the Second-Hand Dealers and Pawnbrokers Act 1989 and its regulations.
- No Cash Payments: A critical regulation to be aware of in Victoria is the prohibition of cash payments for scrap metal transactions. All purchases and sales must be made via a non-transferable cheque or electronic funds transfer.
- Record-Keeping: You are required to keep detailed records of all transactions. This includes an accurate description and weight of the scrap metal, the name and address of the buyer/seller, identification details of the seller, and a copy of the payment method.
- Location and Equipment: Secure a suitable location with a weighbridge and the necessary equipment for sorting, shredding, and processing metals. A central location can be an advantage, making it easier for both drop-off and collection services.
- Services: Consider offering a range of services to attract a broad clientele. Many Melbourne-based scrap metal businesses provide:
- Drop-off services for individuals and businesses.
- Bin services for industrial and construction sites, with bins of various sizes supplied free of charge.
- Collection and pick-up services, sometimes with a minimum quantity requirement.
- Industrial cleanouts and decommissioning services.
The Recycling Process and Environmental Impact
The scrap metal recycling process is both a business model and an environmental imperative. After collection, the scrap metal is sorted into different types. Ferrous metals are separated using large magnets, while non-ferrous metals are sorted by hand or with advanced machinery. The sorted metals are then shredded, melted down in furnaces, and purified to remove any contaminants. Finally, the purified molten metal is solidified into new forms like bars or ingots, ready to be sold back to manufacturers. This entire process significantly reduces the demand for mining new raw materials, conserves energy, and diverts waste from landfills, making it a key component of a sustainable, circular economy.