Scrap Pays the Bills

A recent conversation has me thinking that the old screw machine world has been turned on its head and the change is falling out of its pockets.

I was talking to an old machining client, and he mentioned that in the last quarter he derived more money from his scrap than from the components he had made. This fellow runs a sophisticated machining company—no dumb washers—so he adds a lot of value to his machined components. Still, this quarter his scrap brought in more dollars than his product. This is a testament to global sourcing and manufacturing efficiency, but it also may be pointing toward diminishing viability of metal machining in the age of scarce and expensive raw materials. If copper and brass prices stay over $3.00 per pound, we are going to see the engineers figure out methods to get around using them. We are beginning to see lead engineered away because of health and disposal issues. It could happen with copper, brass and stainless. Composites are changing aerospace and will soon make their mark in the automotive. The parts printing paradigm (see “Ex One Revolution below) addresses the scrap from machining with a scrapless process, which also trumps the messy fluids issues. Heading, EDM, injection molding, waterjet and laser are all pointing in the direction of scrapless part making.

Eaton Corporation recently closed a big brass fittings plant in Oklahoma because they felt that they could deploy their capital more efficiently than investing it in brass bar, chips and nipples.

Another statement about the price of scrap was made on eBay in a recent Graff-Pinkert auction. A used 1100 E, Burrett 30” chip wringer brought $13,000 in a competitive auction. Spinners rise in value when chips become more dear. This is the highest price I’ve ever seen for such a model. The recent commodities slide may temper the focus on chips, but as long as China is committed to its frantic infrastructure build out, brass and copper will be short, and scrap will stay hot.

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