When you look at steel prices you may notice that the cost of this ferrous metal seems to fluctuate at different times for no apparent reason (or at least not apparent to the casual observer). But if you take to first understand where it comes from then you can make better since of steel prices and even predict what could happen in the coming months and years. Unfortunately it’s not an entire simple process to create steel so we will give a brief overview here with most of the major details and then we can look at some trends to help us understand the fluctuation in prices.

Scrap Metal  – Ferrous and Non-Ferrous

There are two types of metals, ferrous and also a non-ferrous metal where the only component that changes this is whether or not it has iron within it. Ferrous metals like steel, high strength steel and of course iron are fairly common names you will hear while in the category of non-ferrous would be metals like aluminum, titanium and copper.

Steel Prices and Ferrous Metal

So because steel is a ferrous metal that means that we must have iron in order to create it, but as you may know about iron it is not always pure and can lend itself to impurities which will lower steel prices. This is why a special process to create steel is used to remove these impurities. By itself steel cannot stay together because of its molecular structure so carbon is typically added because it acts as a hardening agent. Imagine when a house made of bricks is first built. If they were to just stack bricks on top of one another to build the home then while it is made of a solid and strong substance, it could easily be knocked over. So they of course add cement between the bricks in order to make the bond of the bricks work  so they stay together. This is why carbon is added to the iron although other allying materials can be used like chromium or tungsten. The more carbon that is added the stronger the steel will become and are typically known as cast iron while on the other end you have wrought iron, iron which have better resistance to rust and can be welded much easier since they are not as tough.

Back in mid-evil times when steel was created to make weapons like you’ve seen in movies they used a very different process than what is used today to make it much more affordable and practical to create in large amounts, yet still takes a very long time. This new process is known as the Bessemer process and was refined once again by BOX (basic oxygen steel making which again lowered the cost of its production and made steel one of the most practical and used metals today.

What Makes Steel Prices High

Skipping the history of steel making we’ll move right to Basic oxygen steel making as this is what the primary creation of today’s steel in the world is made from and what you will attain some of the highest steel prices for. This type of oxygen converting is used by taking carbon-rich molten pig iron and converting it into steel. By taking pig iron and passing oxygen through it you are able to lower the carbon content to the exact desired amount . Before this process was used, it steel may need to go through several passed of adding carbon and then removing carbon in order to get the amounts correct. Much of this has been removed and with it costs have gone down as well. This process only began around the early nineteen fifties and bases its converter off of a Bessemer type where instead of blowing air from the surroundings into the iron, they use only oxygen.

The entire process in a very condensed nutshell would start and finish like this:

1. The production begins with molten pig iron which is heated to very high degrees inside of a blast furnace which is then poured into a specially line separate container.
2. The pure oxygen is “injected” into the pig iron and magnesium sulfide is added which creates a transfer of sulfur, phosphorus, and silicon into magnesium sulfide which is more easy to manage.
3. At this point the mixture is cooled down by lowering a lance into it which blows more pure oxygen into the mix which ignites the carbon that is within it and causes it to turn into carbon dioxide and monoxide thus lowering the amount of carbon that we would like to see in it as well as other materials and impurities we don’t want inside of our steel.
4. At this point the steel can be cooled and or shaped into whatever is required. There are times where special additions are added to steel depending on what is needed, but this is how it is basically made and when it is freshly created will yield the highest steel prices.

So what does all of this process have to do with steel prices and scrap metal prices overall? When you think about the power involved in making this entire creation happen you may come up with some idea of how much money it takes to produce iron. In order to create the amount of heat which is desired in order to really have an affect on steel, it takes a large amount of energy, more than what you would use to simply heat your house. During the winter you may like to keep your home heated to around seventy to seventy five degrees, and even then you aren’t happy when you see your electric bill. Imagine having to heat your house to 1,700 degrees! At least you wouldn’t be around to see the bill.

The main sources of energy used to create steel are natural gas, for heating reasons, electricity, coal, and of course the iron ore.  The fluctuation of these scrap metal prices can directly affect the price of steel, so by watching the costs of these sources you can create a better prediction of how it will effect steel prices. Below you will find some historical data which indicates the costs of these sources over the past few years.

When dealing with steel prices it’s also important to understand the difference between stainless steel and regular steel. Just as ferrous metals have iron in them, stainless steel metals will contain at least twelve percent of the element chromium which is what makes it rust resistant. Steel which does not contain this chromium is susceptible to rusting and can diminish the value of steel.

Here is a list of steel prices so you can see their trends for the time frame:

Summary

With most mass produced metals you can place a direct relationship in the price of them by looking at the fluctuating prices of the materials and power used to produce them. Steel prices are a good example of this as their cost is dictated not as much by demand, but the cost of the supplies.

One of the best types of metal that you can collect as far as scrap metal prices  in value is steel which is why steel prices should be of interest to anyone scrapping. Steel is a specific type of alloy that contains primarily iron but also has carbon in it. The carbon content, depending on the grade is somewhere between 0.2% and 2.1% when measured by weight. The carbon in the steel working along with other elements create a hardening agent which helps keep dislocation in the atom of the iron from moving past one another on the crystal lattice. The amount of carbon is important to the scrap steel prices because if you have an alloy with carbon which is higher than 2.1% then you are dealing with cast iron which will give you a different range on the scrap steel prices list.

Scrap steel is produced in several ways but the most common is through the Bessemer process and is currently mass produced at a very inexpensive price. Of course the cost to create scrap steel is more than what you could sell it for, but collecting it for free can weld a very strong profit especially when you look at current scrap steel and overall scrap metal prices. As with most metals, the best places to find scrap steel are in junkyards or dumping places around town. If you live in a larger city like New York simply driving around will you will find many good items that have good steel in it. You may end up having to cut off some of the other pieces of the object that are not valuable so you can have pure steel element.
Use scrap steel prices to your advantage by making sure you don’t pass up the opportunity to pick up these heavy metal items. It may be a lot of work to get it where you want it to be but in the end it will pay off in a major way.