Why Do Scrap Metal Prices Change?
Trading in old scrap metal has become more and more popular in recent times, as metal prices are on a rise and along with the eco-trend, this industry is becoming more profitable by the minute.
Because the industry in itself is rapidly changing, understanding the relationship between price and demand is crucial to achieving long-term success.
How does scrap metal pricing fluctuate? What are the signs you should look out for? Let’s find out.
WHY DO SCRAP PRICES FLUCTUATE?
The most simple answer to the current value of scrap metal is the law of supply and demand. To be more specific, though, typically there is one major reason behind the availability of materials and the resulting price, and it is not availability. It is the shortage of labour and transportation prices that have the biggest impact on the market. The quantity of metals hasn’t deviated tremendously in recent times, but other factors impact their prices. Scrap prices tend to have a strong effect on the cost of materials, both new and recycled because when and where you put it back into circulation it helps keep the cost of metals down.
HOW BIG ARE THE PRICE SHIFTS?
Generally speaking, prices for scrap metal are constantly shifting, often on a weekly, and sometimes even daily, basis. However, these everyday fluctuations are not significant, usually only a matter of a few pounds per ton. When it comes to significant scrap metal price change, you should think seasonally, rather than daily. If you’re dealing with a few broken-down appliances at your home, the price shifts might not make much difference, but if you’re dealing with tons of scrap metal, it’s worth it to keep a close eye on the metal market.
Why are the scrap metal prices going up? Price shifts when it comes to scrap metal are interconnected with metal prices, the lower the supply, the higher the demand for recycled scrap metal. Any significant changes in the global market will impact scrap metal pricing. Currently, we are in the middle of the metal prices boom, and selling scrap metal has become more profitable than ever, as we observe one of the biggest price shifts in recent years.
FACTORS THAT AFFECT SCRAP METAL PRICES
Scrap metal prices are a bit of a balancing act. Here are the most important factors that affect scrap metal prices:
- a large number of construction projects, where recycled scrap metal is commonly used,
- manufacturing demand, for example, digitalisation increases the demand for aluminium,
- how much metal is already out there in the market – do companies/countries have huge amounts of scrap metal stockpiled?
- the cost and efficiency of transportation,
- the labour market within the metal industry.
You can observe and analyse those prices yourself, but you can also ask for help from a local metal recycling company.
WHAT ARE THE BEST SCRAP METAL PRICES?
As with any sort of resale, getting the best deal for your scrap metal is all about timing. During the Covid-19 pandemic, the price shifts were and are significant, mostly due to transportation delays. Anytime there is a significant shortage of drivers is when scrap metal prices go up.
At the moment, there is a massive shift in the price of scrap metal, thanks to the pandemic. The changes are more significant, and if you keep your timing right, you can gain a lot by trading scrap metal. The real estate industry needs materials to build and complete their projects, and the market simply can’t satisfy the demand with ongoing transportation issues. Now, might be the best time to sell scrap metal. To get the optimal scrap metal price, it really does benefit you to shop around and find the scrap metal yard that will consistently give you the best offer when compared to other local competitors.
FINAL WORDS
As you observe the global and local metal market in time, you will be able to predict when will scrap metal prices go up. Scrap prices change frequently. However, there are only a few factors that determine their final value, so if you are interested in the market or work within it, it won’t be difficult to tell when the best time to buy/sell is. Analyse the data and make the best deal possible, good luck.
