Scrap metal recycling is a growing industry that’s taking the world by storm. In fact, according to the EPA, scrap metal recycling has the potential to create more jobs than gold mining by 2027. If you’re interested in starting a scrap metal recycling business, this guide is for you. We’ll cover everything from choosing the right business model to finding qualified suppliers and more. Read on to get started on your journey to becoming a successful scrap metal recycler.

What is a Scrap metal recycling business?

A scrap metal recycling business can help you dispose of old electronics, metals, and other materials that would otherwise go to waste. By recycling these materials, you can create new products or materials that can be used in other businesses or homes.

When starting a scrap metal recycling business, here are some tips to keep in mind:

  1. First, decide what type of scrap metal you want to recycle: This includes things like aluminum cans, steel rebar, and copper wire.
  2. Research the best methods for recycled metal processing: There are different processes available for each material, so make sure to choose the one that will work best for your specific items and needs.
  3. Build a strong business foundation by setting up insurance policies and hiring a reliable crew of scrap metal recyclers. These factors will help ensure that your business is a success long term!

How to start a scrap metal recycling business?

If you’re thinking of starting a scrap metal recycling business, there are a few things you need to know first. Here are five tips to help get started:

Know the Laws Regarding Scrap Metal Recycling

Before you can start collecting and processing scrap metals, you’ll need to be familiar with the laws surrounding this industry. Many states have specific regulations governing what can and cannot be recycled, so it’s important to learn about these before getting started.

Get Licensed and Approved by Your State

Most scrap metal collectors will require that you obtain a license from your state before beginning operations. This license will typically require proof of insurance and detailed information about your business, such as its name and contact information. Once you have your license, make sure to prominently display it in your collection area.

Keep track of Inventory and Records

Keeping track of inventory is one of the most important aspects of running a scrap metal recycling business. You need to know how much material is being collected each day, what type of material is being processed, and where the materials are being stored. You also need to keep records detailing the value of materials processed each day so that you can accurately pay taxes on this income.

What is the process of scrap metal recycling?

In order to recycle metals, you first need to find a recycling center that will take your metal. Once you have the metal, the recycling process begins. The recycling process begins by sorting the metal into different categories based on its use.

The most common categories of recycled metals are copper, aluminum, steel, nickel, and brass. Each category has different requirements for sorting and processing in order to make it safe for reuse.

After the metal is separated into its individual parts, it is then processed in a furnace called an autoclave. This furnace heats the metal until it melts and becomes liquid. Then, the molten metal is poured onto a cold surface and solidified into what is known as slag. Slag is made up of soot and other debris from the burning process of making steel.

Slag can be reused to create new steel because it helps form the iron alloy that makes up steel. Slag also contains valuable elements like magnesium and silicon that are needed to create new products.

Once all of the slags have been removed from the molten metal, it is then cast into new pieces of steel using pressing equipment. This creates new items like cars, bridges, skyscrapers, and more.

What are the benefits of starting a scrap metal recycling business?

There are many benefits to starting a scrap metal recycling business. Here are just a few:

  • You can make a great living from your recycling efforts. The average scrap metal prices are high these days, so there is potential for good profits in this business.
  • You can work from home if you have the right equipment and facilities. Scrap metal recycling is not complex, but it does require some specialized knowledge and equipment. If you can set up your own operations, you can be in control of everything and work when you want.
  • You can help reduce waste levels by disposing of old metals in an environmentally responsible way. By extracting value from materials that would otherwise be just discarded, you’re helping to conserve resources and protect the environment.

The costs of starting a scrap metal recycling business

There are a few costs you’ll need to plan for when starting a scrap metal recycling business. These costs can include: purchasing the necessary equipment, licenses, and permits; hiring minimum wage employees; and maintaining insurance coverage. Here are some more specific expenses you’ll likely face:

Equipment and Supplies:

The upfront cost of purchasing the necessary equipment and supplies to start a scrap metals recycling business can be hefty. This includes items like a drum sorter, jaw crusher, vacuum cleaner, tongs, ladles, buckets, scales, and more. Make sure to factor these costs into your budget before starting up shop.

Hiring Minimum Wage Employees:

Hiring minimum wage employees is important if you want your business to be successful. First and foremost, they will help to ensure that your operation runs smoothly. However, they also need to be paid fairly pursuant to applicable laws. Consider consulting with an experienced labor attorney if you have questions about wages and working conditions in your area.

Maintaining Insurance Coverage:

It’s important to maintain adequate insurance coverage in case of accidents or other unforeseen circumstances. This includes both general liability insurance and accident-related coverage such as property damage liability insurance. Failure to maintain this type of coverage could lead to costly financial liabilities down the road.


If you’re thinking of starting a scrap metal recycling business, this guide is for you. In it, we’ll cover everything from the basics of the industry to tips on how to get started. We’ll also provide you with some helpful resources so that you can take your business to the next level. Don’t wait any longer! Start learning about scrap metal recycling today and see how easy it can be to start your own successful business.

Frequently Asked Questions

What types of insurance do I need for my scrap metal recycling business?

There is no one-size-fits-all answer to this question since the type and amount of insurance required will vary depending on your specific business situation. However, it is generally recommended that businesses protect themselves against property damage, liability claims, and income loss.

How much does it cost to get a license to start a scrap metal recycling business?

There is no one-size-fits-all answer to this question since the cost of obtaining a license can vary depending on the state in which you operate your business. However, general costs typically associated with obtaining a license include application fees, background checks, and inspection fees.

What are the costs of starting a scrap metal recycling business?

The cost of starting a scrap metal recycling business can vary depending on the size and type of business. The most common expenses include initial investment in equipment, licensing fees, and employee wages.

How do I find qualified employees for my scrap metal recycling business?

Finding qualified employees for your scrap metal recycling business can be difficult due to the sensitive nature of this industry. It is important to screen potential employees carefully before hiring them in order to avoid any legal issues later on.

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