What Causes Scrap Metal Prices To Fluctuate?
The environment and sustainability are high on everyone’s minds these days – yet the tradition of recycling and reusing scrap metal goes back centuries.
After all, with metal proving so strong yet so malleable, ensuring it stays in circulation – and can be put to use for a whole new life cycle of service in any number of products – is just one of its many advantages.
If you have ever bought and sold scrap metal before, you will have likely noticed that the prices the material can command tend to fluctuate up and down.
In many ways, that is only natural – market dynamics such as supply and demand, the availability of resources and the overall strength of the economy all have plenty to say in shaping how any market operates.
The causes behind why scrap metal prices fluctuate are actually a little more nuanced than those broad strikes, however. From transportation issues to commodity prices and more, let’s break down scrap metal price fluctuations by their most common causes.
Who knows? You might even learn how to time your next sale of scrap metals in your favor.
Scrap metal transportation expenses
You might not think it to look at your scrap metal today, but those bits and pieces could end up making their way anywhere in the world. Scrap metal is bought and sold on the global market in both advanced economies like the United States, but also emerging markets like India, Brazil and so on.
However, international shipping is incredibly complicated. Not only is there a bunch of red tape, but that bureaucracy and changing local laws per country mean that things like shipping tariffs, import and export fees and so on all affect how viable the global scrap metal trade is at any given time.
Not impressed by the price your scrap metal is getting today? Global transport costs could be to blame.
Gas and fuel prices
Headlines worldwide have had a lot to say about the cost of fuel and energy, and it makes sense that this has an impact on the price of scrap metal from one moment to the next.
Fuel prices relate not only to the vehicles that transport scrap metal overland, after all, but also to the energy that powers the facilities that process it. It takes a lot of power to process scrap metal – be that natural gasses, coal or even renewable electricity – and the cost of that has a knock on effect on scrap metal prices.
Virgin metal prices
Scrap metals have been used before, but virgin metals are brand new material. Many businesses will judge what to pay for scrap metal based on how attainable virgin metals are, and their cost fluctuations often affect scrap metal’s for better and worse.
It can feel like there are a lot of complexities behind what prices you can get for scrap metal today, yet the reality is that it has plenty to do with the state of the industry overall.
Need some further assistance? Get in touch with our team today – we’re happy to help.
