Scrap cost calculator: what scrap costs a shop running X tons a year
Enter your tons per year, scrap rate and material cost to see what scrap costs you each year, and what 1, 2 or 3 points less scrap would be worth.
Saved at 1 point less scrap
$500,000
per year
Saved at 2 points less scrap
$1,000,000
per year
Saved at 3 points less scrap
$1,500,000
per year
Worked example
Three shop sizes, all at 4% scrap and $1,000 per ton of material. These are example numbers; put your own in the calculator above.
| Tons per year | Tons scrapped (4%) | Scrap cost per year | Saved at 1 point less | Saved at 2 points less | Saved at 3 points less |
|---|---|---|---|---|---|
| 25,000 | 1,000 | $1,000,000 | $250,000 | $500,000 | $750,000 |
| 50,000 | 2,000 | $2,000,000 | $500,000 | $1,000,000 | $1,500,000 |
| 100,000 | 4,000 | $4,000,000 | $1,000,000 | $2,000,000 | $3,000,000 |
How the math works
Scrap cost per year is tons per year times scrap rate times material cost per ton. At 50,000 tons and 4% scrap you scrap 50,000 x 0.04 = 2,000 tons. At $1,000 a ton that is $2,000,000 a year.
Each point of scrap rate you take out is 1% of your tons. For the same shop that is 500 tons, or $500,000 a year. Two points is $1,000,000 and three points is $1,500,000. A point is worth more the more tons you run and the more you pay for metal.
Where scrap comes from, and what planning can do about it, is in how to reduce scrap on a slitting line.
What Elite Steel got
Elite Steel plans its slitting with LineSight AI. Its scrap rate came down 2.9 points, which added $850K in annualized revenue and raised gross margin 20%.
See what LineSight AI would save on your own order book. The first 3 months are free.
Book a DemoFrequently asked questions
How do you work out what scrap costs?
Multiply the tons you run in a year by your scrap rate, then by what a ton of material costs you. 50,000 tons at 4% scrap and $1,000 a ton comes to $2,000,000 a year.
What counts as scrap here?
Anything you bought and ran but did not ship: edge trim, drops and remnants you never use, head and tail cuts, and width rejects. Use the scrap rate from your own records.
Should I take off what I get back for scrap?
If you sell scrap back, enter your material cost minus the scrap price per ton. That gives you the net loss. The full material cost shows what the lost metal was worth.
What does one point less scrap mean?
One percentage point of scrap rate, for example 4% down to 3%. Elite Steel brought its scrap rate down 2.9 points with LineSight AI.