Wheeling and Dealing in Scrap Metal
The scrap metal business is on the rise, with more people buying, selling and recycling scrap metal than ever before. It has become a profitable business all over the world. Some take it more seriously than others; some even make it into a career. Nowadays, you can take scrap metal from broken down cars, tins, cans, wires – the list goes on, and these metals can all be recycled.
Why do Prices Fluctuate?
Everyone knows scrap metal prices vary, but why? Well, it’s really quite simple; the price of virgin metal itself fluctuates, thereby influencing the prices you pay for metal, and the price you get for them when scrapped. So when virgin metal prices increase, the price of the scrap metal rises, too. And because recycled metal is cheaper to produce than virgin metal, it becomes more desirable, therefore carrying a higher price tag when the demand for a particular metal arises.
Of course, it goes without saying that metal prices are subject to supply and demand, along with the cost of production, just like any other commodity. An example of this would be copper; the price rises quickly in the event of a housing boom, caused by builders demanding record amounts of pipe and wire that are used to build millions of homes. Likewise, when a housing bust occurs, the prices of copper swiftly falls, before rebounding once more when the housing market has recovered.
Rarer imported metals are also subject to fluctuations, and are influenced by factors such as politics and importation costs from countries such as Russia or China. When countries raise their export costs, or taxes, Americans have to pay more for imported metals. Trade agreements can also turn in their favour, meaning the cost of these metals decrease.
Price of Fuel
The price of fuel is considered to be the greatest influence on metal prices; this is because all metals need a high heat in order to make the most basic of industrial products, including wire, sheet metal, rods, and bars. To achieve this, it’s common for foundries to use coal, natural gas and electricity to produce the required heat, so when the costs of these fuels rise, usually the cost of metal follows.
So, there we have it. That’s the reason, in a nutshell, why scrap metal prices vary. Call up your local scrap metal company to find out what cash you could get in your pocket today!