How Low Prices Affect the Scrap Industry, We’ve talked to a lot of people, both on the scrap and scrap side, and no one seems happy with what’s going on in the markets right now. We know a lot of people are hoping the market will (and quickly) turn around, but some of the tricky parts are hard to know.
A lot of bad things happen because scrap prices are so low. Many scrap yards in the US and Canada are forced to close because scrap prices are so low they can’t find enough space to cover overheads. Scrap warehouses know they can be hit with a slow patch as the weather is bad during the winter months, but when prices are at this level, it’s much harder for them to make enough money to cover overhead.
What Happens To Scrap Dealers When Scrap Prices Drop?
What happens to scrap dealers when scrap prices drop? You know that feeling very well. With markets this low, it’s hard to stay motivated to buy steel and other ferrous goods. Many scrap yards have set minimums for purchasing the material, and even if you have several thousand pounds of steel, you may not be able to fill your gas tank. Not only is this discouraging, but most part-time scrapers are giving up on certain materials like steel and iron.
A lot of people think it would be a good thing to stack supplies or store some of their top quality items, and it all comes down to a view of how you want it done. Others like to have a steady cash flow for their hard work and we think this is one of those scenarios where it’s a personal opinion and there’s more than one right answer. If you have a safe and spacious place to store it, you can keep higher-priced items like copper and brass. Others may be spoiling everything right now, hoping that prices will continue to drop.
What Will Drive Scrap Prices?
Countries such as China, India, and other Middle Eastern countries are some of the largest consumers of scrap metal and other metal ores. Most of the demand for scrap and other raw metals has decreased significantly, as many are not currently building or developing further. Until there are major increases and growth in construction, you will continue to see scrap prices at several-year lows.
No one can pinpoint a single indicator of overseas markets to help you find out what’s going on with copper and brass prices, but you’ll have to wait and see how people react to new industries, products, market news and more. There are so many factors affecting scrap prices and relevant markets that it can be different every day.
Don’t Scrap Prices Need to Increase?
Many people wish this was true right now, but unfortunately it is not. Much of the price is related to end-product demands and with little growth at the moment in the US and the rest of the world it will be hard to see prices rise any time soon. Things you might want to look for to grow in the market:
If only we could get this answer, many people have asked us when prices will go up and we have no clue. If we had that answer, we’d tell everyone we’d already be retiring on our own private island, but there’s no crystal ball we can find to predict the future. How Low Prices Affect the Scrap Industry Hard times lead to good times, so keep having a positive attitude and scrapping.