The Big Question: How Do Scrap Metal Prices Work?
One of the most common questions that we seem to get asked is, “How Do Scrap Metal Prices Work?” The problem is that it is not always the easiest answer to give. With dozens, if not hundreds, maybe thousands of factors involved let’s try to dig a little deeper into how scrap metals work.
- The Market – What market are we talking about? The Comex Copper Price Market. With thousands of copper contracts being traded almost the way that stocks get bought and sold daily it is tough to figure out where the market is going each day. The LME (London Metal Exchange) is the largest metal and commodities trading site has metals like gold, silver, copper, and more being traded on it daily.
- The World – A big statement to make, but the world economy answers a lot of the how do scrap metal prices work question. When large countries like China and India are consuming and are in need of a lot of copper the markets will generally move quicker and prices could rise if those countries are consuming massive amounts of the red metal. When these countries (among many others) are building info-structure, buildings, and developing themselves in a way similar to the US, that means that the copper demand will be up and hopefully the supply will be down…leading to higher prices.
- Supply & Demand – Just going off of the last sentence, when countries across the world are developing new technology, putting up large buildings, building up undeveloped areas and similar projects, they will need metal. The larger amount of projects…the larger the demand for metals. The larger the demand of metals…the larger the price swings will normally be. Higher prices will generally be reflected when the market is in need for metals and that is when they will rise.
With so many factors in the commodities and overall metals markets out there it is tough sometimes to really get a good grasp on it. We want to be able to get you more information to help make informed selling decisions. Figure out how the scrap metal prices and markets work is not something that you can figure out overnight, so hopefully you will be a little more informed after this.