Module 4 · The buyers and the market

Scrap wood: how it is actually sold

Level 2 · Working knowledge 12 min read 5 questions

Wood after its first life is four different markets with four different economics, and in one of them the material is a liability rather than a commodity.

Lesson 10 covered mill residuals - the co-products of sawing. This lesson covers what happens to wood after it has been a product: pallets, packaging, demolition timber, offcuts from construction sites, felled urban trees and treated wood at the end of its service life. It is the part of the chain most people mean by 'scrap wood', and it is four separate markets.

1. Pallets: the largest and best organised

Pallets are the most systematically recycled wood product in existence, because they are standardised, they accumulate at known locations, and a repaired pallet is worth a large fraction of a new one. A pallet recycling business collects used pallets from distribution centres, sorts them, repairs what can be repaired and dismantles the rest.

2. Reclaimed and architectural salvage

Timber recovered from demolished buildings is a genuine premium market, and the reason is that it cannot be reproduced. Old-growth heart pine, chestnut felled by blight a century ago, and wide clear boards from trees nobody is growing any more all command prices far above new lumber for flooring, beams and furniture.

• It is sold by the board foot or by the piece, graded by appearance and by story - provenance is genuinely part of the price.
• Deconstruction costs far more than demolition, so it only pays where the material is valuable, and it is usually the contractor who takes the risk.
• Metal is the enemy. Every reclaimed board has to be checked - visually and with metal detectors - before it goes near a saw, and remilling is the main cost.

3. Urban wood and construction waste

Two large, low-value streams are handled almost identically. Urban wood is trees removed from streets, parks and gardens; construction and demolition wood is offcuts, formwork, packaging and framing from sites. Both are bulky, mixed and contaminated, and both are usually handled through a processing yard that takes them for a fee.

A processor therefore earns at both ends - a fee to take the material and a price for the product - which is exactly how the economics of most low-value recycling work. When mulch or fuel demand is weak, tipping fees rise to cover the gap.

Within urban wood there is a small high-value exception worth knowing: an urban street tree is often a large, open-grown specimen of a desirable species, and a growing trade mills these into slabs and lumber locally. The obstacle is the one from lesson 4 - embedded metal - and the cost of moving a very large log out of a residential street.

4. Treated and contaminated wood: a cost, not a commodity

Railway ties are a partial exception: used ties have an established market as landscape timbers where permitted, and a large volume goes to permitted co-firing facilities designed and licensed to burn them. The important word in both cases is permitted - the outlet exists because a regulator authorised it, not because the market found it.

What makes a wood waste stream worth money

1. Concentration. Can a truckload be collected from one place? Pallets yes, garden waste no.
2. Cleanliness. Is it free of paint, preservative, glue, grit and metal? This determines whether it can go into bedding and panels, or only into fuel.
3. Dryness. Water is weight you pay freight on and energy you pay to remove.
4. Species and size identity. Known and uniform material is worth far more than mixed. This is the same principle as the scrap grades in the copper course: the cleaner and better-identified the material, the further down the chain it can re-enter, and the more of the chain's cost it skips.

That parallel is exact and worth sitting with. Copper scrap and wood waste obey the same law from opposite ends of the value scale. Bare bright copper wire skips mining, smelting and refining; a sound pallet skips the forest, the sawmill and the nail gun. Mixed, dirty material in both industries goes back to the bottom of the chain or out of it altogether.