Recovering scrap metal is an important function of most demolition jobs. Regardless of whether a project is at a federal, industrial or residential site, a demolition contractor often encounters a significant amount of metal on the job site. However, best practices for handling that material could vary on a case-by-case basis.
“We try to be consistent, but you do have to adapt based on where you’re at and who you’re dealing with,” says Michael Kelly, chief financial officer at Schenectady, New York-based Jackson Demolition Service Inc. The demolition company serves residential, industrial and federal clients throughout the United States.
“There are variables, such as what the client will allow you to do and what they won’t allow you to do,” he says. “So, it’s a coordinated effort.”
Mark Ramun, vice president of industrial sales at Jackson Demolition, adds that every job has different factors to take into consideration, such as how to handle the scrap material, where to sell it and how to transport it.
“Anything that can be recycled or reused, we want to recycle or reuse to avoid the need to put it in a landfill or somewhere else,” Ramun says. To achieve this, he says Jackson Demolition extracts materials in a manner in which the company will recover the highest value for the materials. The demolition firm also sorts and segregates by grades and types consistent with the requirements set by recyclers and mills.
Getting the grade
Identifying scrap metal is one of the first steps Jackson Demolition takes when recovering metals from its demolition job sites.
Currently, Jackson Demolition is finalizing a demolition project at Southern Co.’s retired Gorgas Electric Generating Plant, better known as Plant Gorgas, in Parrish, Alabama. Plant Gorgas served as a coal-fired power station, and Jackson Demolition expects to finish its work on the site by fall of this year.
“When we got to that site, we recognized there would be a lot of grades of materials,” Ramun says, adding that the company has encountered more than 70,000 gross tons of steel on the job site.
Jackson Demolition uses Waltham, Massachusetts-based Thermo Fisher Scientific’s Niton XL2 X-ray fluorescence (XRF) guns to identify scrap metal on all its job sites. For the Gorgas project, specifically, Ramun says the XRF gun enabled the company to identify metal grades that would have been tough to identify without that tool.
“We were able to capitalize on recovering metals that were exotic [that] we would not have been able to identify without the XRF,” he adds. “That helps our project team identify materials that might be of higher value to separate them.”
Kelly adds that the company has seven or eight XRF guns to ensure one is available at each job site.
“They’re like $25,000 to $30,000 but well worth it because [they] will identify the difference between a 304 stainless, which you might get 60 cents a pound [for], versus a 316 stainless, which you could get 90 cents a pound [for],” Kelly says. “If you didn’t know the difference, you would send it out blind and rely on a scrap yard to reimburse you correctly,” he adds. “So, we identify before it goes out.”
Ramun says Jackson Demolition also refers to industry specifications such those produced by the Washington-based Institute of Scrap Recycling Industries when identifying different grades of materials.
He adds that good communication is key to making sure materials are properly identified and sorted on-site.
“It’s important to start with good communication to your workers,” Ramun says. “We spend a pretty good amount of time explaining to them where the materials [are] going and what it’s being used for. … It’s really important to share with your team why they’re doing what they’re doing.”
Once a demolition contractor identifies scrap metal on a job site, the company then determines where to sell the material. A contractor can either sell the scrap to a scrap yard for additional processing or directly to a mill. While a mill might pay more for that material than a scrap yard, that option often requires demolition contractors to further process scrap on-site.
With each job, Kelly says Jackson Demolition determines how much it will cost to process metal on-site as well as how much a mill or scrap yard will be willing to pay for the metal as well as transportation costs.
“It’s a balancing act of logistics, the trucking that’s involved, how much you prep or don’t prep and what can that be in the way of a price savings for you,” Kelly says.
In many cases, he says, processing materials on-site can cost more than it’s worth. He explains, “We know the cost per ton to process steel. When we get a price from a scrap yard or a mill, the difference between [a prepared load] and an unprepared load [the cost to us is] often lower. So, what we often elect to do is to take the unprepared price and just concentrate on volume and getting as much material as we can out the door to [a scrap yard].”
Ramun says that was the case with the Gorgas project. Because Jackson Demolition was unable to shear that metal further on-site, the company decided to sell the scrap metal to a nearby scrap yard.
Kelly says focusing on selling scrap metal to scrap yards helps to extend the life of Jackson Demolition’s equipment, reserving the equipment’s use for when it’s most needed. He adds that scrap yards tend to have better equipment to handle that material.
“When we’re dealing with a scrap yard, the scrap yard has built in mechanisms for a lot of volume of steel,” Kelly says. “They have the equipment we would not have. They have guillotine shears, which can handle massive amounts of steel. They have balers.”
In the past, Jackson Demolition processed a little more material in-house; however, Ramun says that practice is becoming less common now.
“It’s becoming more common now for us to find recyclers that are willing to process material for less than what we could process it,” Ramun says. “So, it’s always a calculation that has to be run at the time that you’re bidding the work and also at the time that you’re performing the work.”
Scrap metal prices fluctuate regularly based on evolving market conditions, and those prices vary based on the grade, as well. Ramun says the company closely watches the changing prices to have an idea of what it will receive for its materials on a job site.Regardless of the changing prices, Kelly says Jackson Demolition likes to quickly move ferrous scrap from a job site to clear the site and ensure good quality material.
“On average, as we take [the] material down, the material is normally off-site within less than 10 days. It’s not staying on-site very long at all,” he says. “We bring trucks right out to the demolition pad that we’re working on, and we’ll create piles right where we’re working and load from those piles into the trucks.”
Kelly says Jackson Demolition occasionally decides to store nonferrous materials on-site to protect it before it’s transported to the scrap buyer. “Something like a copper or stainless we will from time to time take that and move it and preserve [it at] a warehouse on-site,” he says. “We move it into a warehouse so that ... it’s secure, so there’s no chance of theft or tampering with it. Sometimes we’ll put it into a roll-off container for safekeeping.”
Trucking is one of the most common ways to transport materials from demolition job sites; however, Kelly says that Jackson Demolition has relied on rail to transport materials to scrap buyers in instances where the buyer is very far from the job site.
“We’ve used rail access in the states of Maine and Texas just because of the sheer distance involved from the job site to the end users that were going to be receiving the material,” he says. “Logistically, it would not have made sense to try and truck a load of steel 10 hours to a recycler. So, in those cases, we have used rail.”
Aside from those rare instances, Kelly says Jackson Demolition largely relies on trucks to transport materials off-site. He says the company tries to sell to buyers that are relatively close to the job site to reduce transportation costs. It also makes sure to fill trucks as much as possible to lower transportation costs.
“Normally buyers give us a set rate per load,” he says. “Say, it’s $250 a load, we’re going to want to fill up those trucks as much as we can because that’s going to be a deduct against us. So, if it was $250 a load and we could get 15 tons into it, that is going to cost us $16 a ton. If we were able to get 20 tons into it, it’s going to be about $12.50 a ton.
“So, we look to load the trailers to their legal limit and take advantage of the volume of trucks that we get during the course of a day.”