Firstly, scrap metal is not waste.

All scrap metal has a value. This value is determined by normal economic factors such as supply and demand, quantity and geographic location. As a rule, the more compact the scrap, the more it is worth, partly for transport reasons but also because smelters want compact scrap in their furnaces.

Scrap metals are always separated firstly into Ferrous (Iron or steel) and Non-Ferrous (Copper, Zinc, Aluminium, Brass etc). Because most iron based metals are magnetic, a magnet is used as the first sorting aid. Iron and steel are normally weighed in truck-loads on a weighbridge, while the far more valuable copper, aluminium and other grades are weighed on a small scale which provides a more accurate measure of the mass of the metal.

More advanced scrap dealers will also separate all of their scrap metal into new (production) scrap and obsolete scrap. Obsolete scrap is something that is no longer useful or financially viable, and includes old cars, ships, rail-wagons and beverage cans. Production scrap is generated at manufacturing companies such as car and component plants, can makers, ship-builders and so on. It is off-cuts generated in a manufacturing process, so for example Toyota would stamp the shape of a door out of a sheet of steel, and where the window will go as well as the outer trimmings are brand new steel but only saleable as scrap.

In contrast to the popular image of scrap metal as a pile of old cars getting squashed into little blocks, new production scrap accounts for as much as 70% of all scrap metal generated. This type of scrap often goes directly from the manufacturing plant to the melting plant as it is high quality and is a clearly defined grade.

South Africa generates in total about 200 000 tonnes per month of steel scrap and about 40 000 tonnes per month of non-ferrous scrap. The value of this scrap is just short of four billion Rand per month, and provides the main source of income for about 30 000 formal employees and 250 000 informal collectors.