Whether you're a small-time scrap dealer, a large scrap yard or a refinery, the scrap metal market can be an elusive beast. With the commodity market and stock market changing every hour of the day, you can never be sure how everything works. With some easy-to-understand explanations and examples below, the iScrap Implementation team will tell you about some of the key factors in scrap metal pricing.
What Should You Pay Attention To In The Scrap Metal Market?
Often scrap dealers and even scrap yard owners look at market prices for commodities like copper and steel and expect to get that price when they go to scrap yards or sell in large quantities. This is not an accurate assessment of how scrap metal pricing works. There are several factors that affect scrap metal commodity prices in the US and international scenes. The following factors all affect each other and do not work independently in determining scrap prices.
Market prices on sites like the LME and Comex could show the price of copper around a sample price of $3.50/lb. this should never be the expected price a scrap yard customer would receive. Market prices are set for commodities that are determined at the end of their life cycle and converted into new products containing copious amounts of copper.
Different industries such as construction, electronics and technology directly affect the commodity market and scrap. If the construction industry is slow, demand for steel and iron will fall, often affecting the prices of materials. This can be a big factor in scrap prices around the world. Countries with high scrap metal imports, such as China and India, can affect scrap prices worldwide.
Depending on a scrap yard's purchase of metal scrap yard near me, this can set their price. If a scrap yard transports and ships more copper pipes from another location, their prices will often be higher as they collect and ship more material. Besides the quantity, the location of the scrap yard is also related to the current prices. Locations closer to ports and larger cities to ship supplies overseas will have less travel costs than someone inland. These places closer to the ports will usually be able to pay more for the material.
As with markets with holidays, the time of year greatly affects a number of industries, including construction and automobiles. Different times of the year and weather conditions can greatly affect the production of new products, thereby reducing demand and scrap prices may also change.