Sometimes it’s hard to wrap your head around, but thanks to our global economy, the current scrap metal prices scrap metal prices you can get at your friendly neighborhood scrapyard are ultimately determined by people thousands of miles from you, often in other countries.
All of the scrap metals that one might take to a scrapyard – gold, silver, copper, brass, aluminum, steel, and more – are all considered commodities. Commodities are traded on open markets with people around the world all bidding and haggling and trying to get the best price they can. Fundamentally, this is how current scrap metal prices are determined, and it decides how much you get paid at our scrapyard or at any other scrap buyer.
The Complexity of Current Scrap Metal Prices
Commodities trading is a complex subject, but one that fundamentally affects practically everyone on earth who might buy something made of metal. Besides the day-to-day fluxuations, it’s made even more complex by the addition of futures trading. This is what really defines commodities prices.
In futures trading, someone with a commodity – let’s say steel – agrees to sell his steel to a buyer today, with the price already agreed-to, but he will not deliver the steel until some months or years into the future. The buyer is making an investment, and gambling that the steel will be worth more in several months than it is today, meaning he can then trade it for a profit. The seller is hoping that prices will go down, meaning he sold his steel at a higher profit today than he would have made if he held onto it.
Unfortunately, this process of gambling can often cause huge upsets in the industry. Commodities can be run up to values far more than they should be worth, or can crash to scrap metal worthlessness if too much enters the market.
Arm Yourself With Information
If you come visit us with a load of scrap, you’re becoming part of that market! If you want to get the best prices for your scrap, do research beforehand. Sites like Infomine compile detailed information on the history of traded commodities. Watch the graphs, and wait to sell until the prices look good.
We pay according to current scrap metal prices. Do your homework to ensure you get the best rate.
How much price research do you usually do before selling something? Ever wish you did more?