One of the most common frustrations people have when selling scrap is not understanding why the price they’re offered today is different from what they expected based on something they read online last week. Or why their neighbour got a better rate for what looked like the same copper. The truth is, how scrap metal prices are calculated isn’t arbitrary. There’s a real logic to it, and once you understand how scrap metal prices are calculated, you can use that knowledge to your advantage.
It Starts Overseas
Scrap metal is a globally traded commodity. The price a Melbourne recycler pays you for copper is ultimately anchored to what copper is worth on international markets — primarily the London Metal Exchange (LME), which is the world’s largest metals trading platform. The LME runs futures and spot contracts for copper, aluminium, nickel, lead, zinc, and tin. When those prices move, local buying rates in Melbourne move with them, usually within a day or two.
China adds another layer. The Shanghai Futures Exchange (SHFE) reflects what’s happening with Chinese industrial demand, and since China is both the world’s largest metal consumer and producer, any significant shift in Chinese manufacturing output or construction activity ripples through global prices quickly. A slowdown in Chinese infrastructure spending can soften copper prices worldwide. A pickup in manufacturing demand can do the opposite.
For anyone selling scrap in Melbourne, this means the rate you get today might genuinely be different from the rate available next week — not because your recycler is moving the goalposts, but because the underlying market moved.
The Australian Dollar Makes Things More Complicated
Here’s something most sellers don’t think about: metals are priced in US dollars globally, but you’re getting paid in Australian dollars. That means the AUD/USD exchange rate is quietly baked into every quote you receive.
When the Aussie dollar weakens against the USD, local recyclers can often pay more in AUD terms — because the metals they on-sell internationally earn them more when converted back. When the AUD strengthens, the reverse can happen. It’s one of the reasons why Melbourne scrap prices don’t always track global metal price movements in a straight line. A commodity report might say copper is up, but if the AUD has also strengthened, the net change in what you’re paid locally could be smaller than you’d expect.
Local Conditions Matter Too
Beyond the global picture, what’s happening in Melbourne specifically has a real effect on pricing.
Victoria has been running a significant infrastructure pipeline — rail extensions, energy projects, road upgrades, urban development. All of it is metal-intensive, and a lot of it requires copper in particular. At Johnny Metal Recycling (JMR), copper rates increased by around 18% through 2026, and a significant part of that came down to local demand on top of already tightening global supply.
Seasonal patterns play a role too. Construction ramps up in warmer months, which tends to support stronger demand for steel and aluminium. End-of-financial-year is when businesses and factories often do large cleanouts, which can briefly increase the volume of scrap in the market — too much supply at once can soften prices temporarily before demand absorbs it.
And simply put, having more buyers in the market competing for your material generally pushes rates up. JMR benchmarks its pricing against current market conditions specifically because staying competitive is how you keep customers coming back.
Metal Type Is the Biggest Variable
All of the above aside, the single thing that most determines your payout is what metal you’re actually selling. Current rates at JMR illustrate the spread:
- Copper (bright/clean): up to $11.80/kg
- Heavy copper: up to $11.20/kg
- Mixed brass: around $7.20/kg
- Stainless steel: $3.20–$4.10/kg
- Aluminium: $1.80–$2.80/kg
- HMS steel: $0.30–$0.42/kg
The gap between bright copper and mild steel is nearly 40 to one. That’s not a pricing decision made at the yard — it reflects real differences in how scarce each metal is, how much energy it takes to produce from raw ore, and how much industrial demand exists for it. Copper does things steel simply cannot. Manufacturers need it, and they’ll pay for it.
Grade Within Each Metal Type
Even once you know the metal type, grade determines which end of the price range you land on.
Copper is the clearest example. Bare, uncoated, stripped copper wire with no insulation or solder is Grade 1 (bright/clean) — up to $11.80/kg at JMR. Heavier copper items like used plumbing pipe and bus bars with minor oxidation sit at Grade 2 — up to $11.20/kg. Copper with insulation still on, mixed with other metals, or heavily contaminated drops into lower grades that pay accordingly.
Aluminium works similarly. Clean extruded sections — the kind from window frames and structural profiles — sit at the higher end of the $1.80–$2.80/kg range. Painted sheet, mixed alloys, or heavily contaminated aluminium grades lower.
For steel, the main factor is contamination. HMS needs to be reasonably free of concrete, timber, plastic, and rubber attachments. The more non-metal material in the load, the more it gets downgraded.
Weight Is the Final Multiplier
Once grade and rate are established, the payout is simple maths:
Rate per kg × kilograms = your payout
This is why volume matters even for lower-priced metals. A tonne of HMS steel at $0.40/kg returns $400. Ten tonnes return $4,000. For large commercial loads — factory cleanouts, demolition sites, construction offcuts — the total adds up even when the rate per kilo seems modest.
All weighing at JMR is done on certified scales, and you see the weight and the rate before payment is confirmed. No surprise deductions, no adjustments after the fact.
The Spread: Why You Don’t Get the Full LME Price
One thing worth understanding: scrap buyers don’t pay you the full LME spot price. They can’t — they’re a business that has costs between buying your scrap and on-selling it to processors. Transport, sorting, shredding, storage, and their own operating margin all sit inside what’s called the “spread.”
What separates good buyers from poor ones is how tight that spread is. JMR’s commitment to top market pricing means they aim to keep the spread as tight as viable, which means more of the commodity value ends up in your pocket rather than theirs.
What You Can Actually Control
You can’t move the LME. You can’t change the exchange rate. But a few things are genuinely in your hands:
Sort your metals before you arrive. Mixed loads price at the lowest grade present — separating copper from steel from aluminium takes time, but the return on that time is real.
Strip copper wire. Moving from insulated copper to bright/clean copper is one of the highest-leverage preparations you can make. The rate difference can be several dollars per kilogram.
Call ahead. JMR’s rates move with the market. A quick call to 0449 894 456 before you load up tells you exactly what today’s prices are, so there are no surprises when you arrive.
If prices are currently soft on something you can store safely, waiting for a market uptick is a legitimate strategy — particularly for non-ferrous metals where the swings can be meaningful.
Get Today’s Rate
JMR has been buying scrap in Melbourne for over 6 years. Transparent pricing, same-day payment, and rates that reflect what the market is actually doing are our standard. If you’re wondering how scrap metal prices are calculated, we explain the factors that affect pricing so you know exactly what your materials are worth before you sell. Call now on 0449 894 456.
