Take the job, sell the steel and charge them for the job. What the heck, do what the market will bear.

If you don't charge him, he'll probably think you are taking advantage of him because he shouldn't be giving all the scrap away to you. So, charge him something, tell him that you are giving him a really good price because you recycle the scrap, and then take a nice vacation with your little bonus there. I think that psychology will work well.