Manufacturing Scrap
There are two main sources of scrap. I'm speaking primarily of electronic scrap, but some other types can fall into the category.
First, there is the type that you're all familiar with. This is scrap mainly generated from equipment that is no longer used: computers, auto parts, etc. For the sake of this discussion, let's call it Used Scrap.
The second type is more hidden to you. This is scrap that comes from the manufacturers of these items. Let's call this Mfgr. Scrap.
There used to be an axiom that, of all the gold purchased by electronic manufacturers, to make their parts, only 60% of it went out the door. The other 40% ended up as scrap - rejects, trim, etc. I have no reason to doubt that these numbers still hold true today. I still have a flow chart I made, some 25 years ago, that shows the 15-20 basic categories of scrap that they generate. There's surely a lot more Mfgr. Scrap than there is Used Scrap.
Where does this scrap go? Mainly to medium and large refineries. Local scrap metal dealers get their fair share. Some is landfilled and lost. Some is stolen by employees.
The beauty of the Mfgr. Scrap is in it's form and it's volume. Take pins, for example. Instead of getting pins, here and there, off of used boards, a manufacturer might generate 6 drums of nothing but gold plated pins in a month. That's quite a sight, especially if you dump them out to make sure you're not paying $8 a pound for rainwater. Instead of having to trim silver off of relays from Used Scrap, a contact point manufacturer may generate several buckets of nothing but loose silver/gold/Pt points.
Most Mfgr. Scrap is simpler and more concentrated. Instead of stuffed boards, they have the individual components.
To the amateur, the volume of scrap generated by manufacturers can be overwhelming. Several years ago, I visited 4 small circuit board manufacturers in a very small city in Missouri. One of them had 10 pallet size Gaylord boxes, full of decent circuit board trim. Each piece had some gold on it.
Electronic manufacturers are everywhere. Often, small towns donate land to manufacturers so they will locate there.
Most refiners don't mess with Used Scrap unless the stuff comes to them prepared. They certainly don't hustle Used Scrap. They go for the Mfgr. Scrap, the easy, huge volume stuff.
Manufacturers aren't in the scrap business. They're in the manufacturing business. Scrap takes up space and they like to get rid of it. Most, especially the smaller companies, are very friendly and will talk to any buyer that seems serious. In small towns, especially, the local scrap metal dealers get the stuff. They often pay one flat low price for everything, no matter how many types are represented. The PM scrap is gravy. In the old days, there was a lot of hanky-panky by the employees that managed the scrap, especially in the huge companies. I imagine some of that still goes on.
One type of scrap that the manufacturers get real serious about is scrap that contains toxic materials, such as lead solder or cadmium in points. Since the EPA set up the "cradle to grave" responsibility act, manufacturers watch this scrap real close. They inspect the facilities they sell this stuff to. Also, some scrap parts are company secrets and some they don't want getting on the second hand market. For this type scrap, the buyer has to sign a "certificate of destruction" and they will inspect his facilities. Sometimes, they sign contracts (usually 1 year) with a refiner. Other than these exceptions, most all scrap is up for grabs.
Most manufacturers send their stuff to refiners. They have to wait for their money and they all know the refiner's reputation for stealing. I've always thought that many would rather sell the stuff outright and avoid the hassle.
Getting scrap from manufacturers isn't for the small thinker. You have to think big quantities and get all your ducks in a row. You have to study the subject, know something about sampling and assaying, and know your scrap.
I've only touched the surface of this lucrative subject and, if there is interest, I'll write more later. Much of my 40 years experience is in dealing with electronics manufacturers, although I haven't done it much in the last 10 years. I imagine everything is still about the same.
There are two main sources of scrap. I'm speaking primarily of electronic scrap, but some other types can fall into the category.
First, there is the type that you're all familiar with. This is scrap mainly generated from equipment that is no longer used: computers, auto parts, etc. For the sake of this discussion, let's call it Used Scrap.
The second type is more hidden to you. This is scrap that comes from the manufacturers of these items. Let's call this Mfgr. Scrap.
There used to be an axiom that, of all the gold purchased by electronic manufacturers, to make their parts, only 60% of it went out the door. The other 40% ended up as scrap - rejects, trim, etc. I have no reason to doubt that these numbers still hold true today. I still have a flow chart I made, some 25 years ago, that shows the 15-20 basic categories of scrap that they generate. There's surely a lot more Mfgr. Scrap than there is Used Scrap.
Where does this scrap go? Mainly to medium and large refineries. Local scrap metal dealers get their fair share. Some is landfilled and lost. Some is stolen by employees.
The beauty of the Mfgr. Scrap is in it's form and it's volume. Take pins, for example. Instead of getting pins, here and there, off of used boards, a manufacturer might generate 6 drums of nothing but gold plated pins in a month. That's quite a sight, especially if you dump them out to make sure you're not paying $8 a pound for rainwater. Instead of having to trim silver off of relays from Used Scrap, a contact point manufacturer may generate several buckets of nothing but loose silver/gold/Pt points.
Most Mfgr. Scrap is simpler and more concentrated. Instead of stuffed boards, they have the individual components.
To the amateur, the volume of scrap generated by manufacturers can be overwhelming. Several years ago, I visited 4 small circuit board manufacturers in a very small city in Missouri. One of them had 10 pallet size Gaylord boxes, full of decent circuit board trim. Each piece had some gold on it.
Electronic manufacturers are everywhere. Often, small towns donate land to manufacturers so they will locate there.
Most refiners don't mess with Used Scrap unless the stuff comes to them prepared. They certainly don't hustle Used Scrap. They go for the Mfgr. Scrap, the easy, huge volume stuff.
Manufacturers aren't in the scrap business. They're in the manufacturing business. Scrap takes up space and they like to get rid of it. Most, especially the smaller companies, are very friendly and will talk to any buyer that seems serious. In small towns, especially, the local scrap metal dealers get the stuff. They often pay one flat low price for everything, no matter how many types are represented. The PM scrap is gravy. In the old days, there was a lot of hanky-panky by the employees that managed the scrap, especially in the huge companies. I imagine some of that still goes on.
One type of scrap that the manufacturers get real serious about is scrap that contains toxic materials, such as lead solder or cadmium in points. Since the EPA set up the "cradle to grave" responsibility act, manufacturers watch this scrap real close. They inspect the facilities they sell this stuff to. Also, some scrap parts are company secrets and some they don't want getting on the second hand market. For this type scrap, the buyer has to sign a "certificate of destruction" and they will inspect his facilities. Sometimes, they sign contracts (usually 1 year) with a refiner. Other than these exceptions, most all scrap is up for grabs.
Most manufacturers send their stuff to refiners. They have to wait for their money and they all know the refiner's reputation for stealing. I've always thought that many would rather sell the stuff outright and avoid the hassle.
Getting scrap from manufacturers isn't for the small thinker. You have to think big quantities and get all your ducks in a row. You have to study the subject, know something about sampling and assaying, and know your scrap.
I've only touched the surface of this lucrative subject and, if there is interest, I'll write more later. Much of my 40 years experience is in dealing with electronics manufacturers, although I haven't done it much in the last 10 years. I imagine everything is still about the same.
