Steel & Iron Scrap
Steel is Australia's highest-volume scrap metal by weight, and also the one where people most often assume "it's all just steel." It isn't. Cleanliness, thickness, and form separate five real grades with genuinely different prices. Here's what distinguishes them.
Clean, heavy steel ¼ inch and over, no tin, galvanising, or coating. The benchmark grade the rest of the ferrous market is priced against.
Mixed heavy steel that can include coated or painted material, still genuinely valuable, just a step below HMS 1's stricter standard.
Machine-shredded auto and appliance steel, clean and compact, the output of industrial shredding rather than something sorted by hand.
Beams, girders, columns, angles, and channels from construction and demolition, sized and shaped rather than graded by thickness alone.
Thin-gauge sheet steel, pressed panels, and appliance skins, the lightest and lowest-value ferrous grade.
Each grade has its own dedicated guide with full identification and preparation detail, linked above. Cast iron is graded separately again, see our cast iron scrap guide for that specific material.
A rough way to think about where your steel sits: if it's heavy, thick, and completely bare with no coating, it's likely HMS 1. If it's heavy but painted or coated, HMS 2. If it's come out of an industrial shredder rather than being sorted by hand, shredded steel. If it's a beam, column, or similar structural shape, structural steel regardless of condition. And if it's thin sheet, an appliance panel, or similar light-gauge material, light iron. Most real loads are a mix of several of these, which is exactly why sorting before you sell matters as much as it does for ferrous scrap specifically.
Every steel grading system comes back to the same two questions: how clean is it, and how thick is it. Clean, uncoated, heavy steel needs almost no processing before it can be melted down, thin, coated, or contaminated steel needs sorting and preparation a buyer has to pay for in reduced price. That's the entire logic behind why HMS 1 outperforms light iron by a wide margin for the exact same underlying metal.
HMS grading isn't an Australian invention, it's a widely-used international convention that predates any single country's local scrap industry, developed as a practical way for mills and traders to describe ferrous scrap consistently regardless of where it's bought or sold. That international consistency is exactly why the terms HMS 1 and HMS 2 carry across borders in a way that some more locally-specific grading systems don't, a buyer in Australia and a buyer overseas are working from broadly the same definition.
That said, the day-to-day categories most Australian sellers actually deal with, HMS 1, HMS 2, shredded, structural, and light iron, cover the practical reality of where scrap steel comes from far more usefully than the international benchmark alone does. Structural steel and light iron in particular are shape- and source-based distinctions that matter for handling and processing, on top of the underlying cleanliness and thickness questions HMS grading is built around.
A mixed load of HMS 1, HMS 2, and light iron together typically prices toward the lowest grade present. Even a rough sort into heavy clean steel, mixed coated steel, and thin sheet tends to add up to meaningfully more than the same material sold as one combined lot. See our full grading guide for the same principle applied across every material category.
Australia has a real domestic steel industry built on genuine recycled demand, not just an export market. Electric arc furnace steelmaking, the process used at plants including BlueScope's Port Kembla operations, runs on a meaningful share of recycled scrap alongside raw material, which is exactly why clean, well-sorted ferrous scrap keeps finding a domestic buyer regardless of what's happening in export markets. For the full energy and emissions case for recycling steel over mining fresh ore, see our environmental impact guide.
Cleanliness and thickness. HMS 1 has to be genuinely clean, heavy steel with no coating, tin, or galvanising, while HMS 2 allows for painted or coated material. Both are real, valuable ferrous scrap, HMS 1 is simply the stricter, higher grade that costs a buyer less to process.
Heavy Melting Steel, the standard industry term for thick, dense ferrous scrap suitable for melting down in a furnace. It's a global grading convention, not something specific to Australia, which is part of why it's used as a reference point for ferrous pricing worldwide.
Similar principle, clean and heavy pays more, but structural steel from beams and columns is often priced and handled based on its size and shape as much as its condition, since large structural pieces need cutting down before processing in a way loose HMS scrap doesn't.
Thin-gauge material: appliance casings, pressed panels, and general sheet metal offcuts. It's the lowest-value ferrous grade because there's proportionally less usable steel per kilogram of handling effort compared with heavy, dense HMS material.
Sorting pays off here more than for most materials, since the gap between HMS 1 and light iron is real and meaningful. Even a rough separation into heavy clean steel, mixed coated steel, and thin sheet tends to add up to more total value than one undifferentiated pile.
Yes, HMS 1, HMS 2, shredded steel, structural steel, and light iron are all real, live-priced categories on ScrapTrade's calculator, alongside cast iron as its own separate material. Check each grade's dedicated guide for the specific live price link.
HMS 2 tends to be the most common in practice, since most real-world steel that's actually been in service carries some paint or coating rather than being genuinely pristine. Structural and light iron are common too, tied to construction and appliance sources specifically, while HMS 1 and shredded steel are less frequently what an individual seller has on hand.
The definitions are identical either way, a household clean-out and a commercial demolition job get graded on the same cleanliness and thickness criteria. What changes with volume is really just how worthwhile sorting becomes, a small load might reasonably go as one mixed lot, while regular commercial volume is almost always worth separating properly before you list it.
Live reference pricing across every grade, updated daily.
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