Could Electric Motor Prices Drop As Low As Steel?

As of July 2018 –  We have seen copper prices jumping all over the place, heard rumors about exports getting ready to dry up to China – and that may just be the start of things. With recent news of more tariffs going into place, we may be seeing these markets turning a different direction. 

The overall markets have been in a big flux, but especially with these low-grade items like ballasts, electric motors, sealed units, and low-grade wire items. We keep talking to more people and recently the hot topic has been electric motors and where the market could be headed for similiar items with copper.

Electric Motors Prices Affected By China

Most electric motors are wound with copper, with occasional ones being filled with aluminum windings (a lot of the aluminum winded motors are for consumer goods like washing machines and dishwashers). On average the copper weight is about 8-12% of the overall weight, and the process to take them apart for copper recovery is very time-consuming. Not only do you have to have the right tools, but also the right amount of patience to deal with all of the screws and different ways to use tools to take it apart.

We have talked to many scrappers who always take electric motors apart, but they tend to be the hardcore ones who do it all of the time and have a system in place. The majority of people do not take these units apart, and they sell them as-is and pretty soon we may be in for a rude awakening when going to cash these heavy and common items in.

Suggested Reading: Rating Scrap Items To Take Apart

Electric motors have traditionally gone overseas to China, with some other countries occasionally taking them too. It seems that (at the time this is being written) the scrap value of electric motors (which has traditionally been at least double steel value), could be quickly shrinking to slightly above steel prices, if not the same price as steel. 

What Is Happening To Electric Motor Scrap Prices?

With the Chinese labor force slowly getting higher and higher pay rates, we have seen the Chinese starting to only take in scrap materials that are easy to process. Electric motors are not one of those items that make the cut. The amount of work, and more importantly, the amount of time involved, is what is going to depress the pricing of the electric motor market.

To give you an example of what could happen, electric motors may be like the misfit toys from the popular Christmas movie Rudolph The Red Nosed Reindeer, and not have a place to go other than the back of warehouses and garages. We have heard that some countries like Pakistan may become a bigger player in the motor market. It will be hard to filter millions of pounds of motors that previously were delivered to China and bring them to another country without a decrease in pricing. 

Predictions on Electric Motors?

It looks like the remainder of 2018 and the beginning of 2019 will see a very tough market for these motors. Going forward it may take up to 2-3 years to really get things under control.

While many people may think that saving the materials will make sense, it will be tough to know for sure unless you have a crystal ball to predict the markets. 

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