Why Are Scrap Steel Prices Down?

what to do about low steel scrap pricesThe Rough Road Of Steel Scrap Prices

So…it’s been a while since you loaded your truck, trailer, or car with scrap steel and you drive down to the scrap yard. You know that this load that you have is heavy because there was a lot of small nails, screws, and tiny parts that you really packaged together and packed in tightly so you are driving extra slow and cautiously.

You arrive at your local yard and get ready to sell the material that you have. You weigh up on the scale, unload your material into dumping hoppers, a bigger pile of steel, or whatever type of bin it is that you scrap yard uses and make your way back to the scale to weigh out.

WOW! You had 4480 pounds of Light Iron in the truck and you are already spending that money in your head. You should be getting what? At least $400-500 and that is going to help with your upcoming vacation and you couldn’t be more excited.

You get to the ticket counter, show your drivers license and get handed your money. You are SO EXCITED that you don’t even count it because you just want to get it into your pocket and drive home. Then something happens….you get home and look at the receipt, and there is only $90 there…there must be some kind of a mistake, but you read the receipt twice and it says that light iron is $45 per ton….now you’re VERY confused.

Why Are Scrap Steel Prices So Low?

Well you are probably confused and because of that you are going to have to figure out what happened. Did the scrap yard rob you of your hard earned work? Is there a mistake? Let’s figure this whole thing out.

We Are Seeing Multi-Year Lows

At the beginning of 2016 the scrap steel and iron prices have reach multi year lows, and some markets are even lower then back in 2008 when the overall markets collapsed. The overall global demand for metals has dipped way down and because of that we have seen not only copper prices, but the steel, aluminum, stainless, and almost all other metal prices decrease significantly. The market is in a large flux right now and because of the world supply and demand for raw materials there is not a lot of room for people to see the prices going up anytime soon.

Oil Prices Are Affecting Many Industries, Including Scrap

The markets are in limbo and because of that the scrap prices of steel and iron are going to continue to be low and one good indicator is the price of oil. With the oil prices so low this has affected so many different industries that you will be very hard pressed to see the market increase anytime soon.

Until the oil prices level out, the overseas market needs an increased supply because of shortages of raw material, and even for the Presidential election to be a factor in where the markets are headed. 2016 is expected to be a tough market for steel and iron pricing, and because of that you shouldn’t be too surprised when you see the prices of steel remaining low.

Suggested Reading: If Oil Prices Go Up, Will Scrap Prices Go Up Too?

Thoughts on Increasing Profit?

  • Shop around for prices through the iScrap App. Here you will be able to find up-to-date prices along with prices that other people have received from their local scrap yards.
  • Look for more scrap..with the prices so low there should be more scrap out there to pick up. A lot of the part time scrappers will give up for the time being and this will be the time for you to be able to capitalize.
  • Try to sort and separate your material more. Maybe items that have electric motors inside of them will suddenly be worth taking apart.
  • Ask your scrap yard for a dumpster. Some yards may have extra dumpsters that you could get dropped off to a job site or even to your house. Now you can put more material into it and increase your profits even more.

Suggested Reading: 5 Ways To Eliminate Frustrations of A Dropping Scrap Metal Market

Related Articles: