Post-Election – How Is Scrap Going to Be Affected?
With the 2020 US Presidential Election over, what is going to happen to the scrap metal markets?
That was what we were thinking when Joe Biden was announced the winner of the 2020 Election. It may not have been the first thing that you thought about – but it was very close to the top of the list. Below we have put together a few ways that the Biden Administration can affect scrap prices in 3 major industries and plans.
New Infrastructure & Construction
One of the things that we have heard but the incoming administration is the push to work on and improve the overall infrastructure of the country. That means we’ve been highway changes new guardrail, new bridges, and all types of other things. This would drive up the demand for steel and iron when bigger projects are being promoted, encouraged, and scheduled. With these bigger projects getting planned out, there may be a small spike in demand for aluminum as well.
Electric Vehicles Increasing
With a massive push towards green energy and clean energy, we will start to see the incoming administration focusing on creating more charging stations across the country for electric vehicles. More electric vehicles mean that the need for power and the amount of energy that charging stations will require a massive influx of copper. This is great news, considering so many markets has decreased their copper user as new technology (like aluminum wire replacing some copper wire) has taken over. On top of this, we have seen a variety of auto manufacturers expanding their electric-vehicle lineups. Some are talking about their new electric pick-up trucks, SUVs, and other smaller electric cars, which will all require more copper.
What About Gas, Wind, & Solar Energy?
We don’t have a good pulse on where long-term oil and gas industries are heading. We do know that in the short term, there continues to be a high demand coming in the second half of 2021 and beyond in the oil industry. While the electric vehicle market continues to make a push, it’s going to take a lot of growth before it is replacing our current energy industries like oil and diesel. In the meantime, you have thousands of tractor-trailers that pull loads all across the country that will continue to be gas or diesel-powered for the foreseeable future, which will always affect the oil industries.
Recommended Reading: Why Do Oil Prices Affect Scrap Prices?
Where Else Will Scrap Be Affected?
With the push towards electric vehicles, we plan on seeing oil prices riding a rollercoaster in the coming months and years. One of the biggest things that will result in these price changes will be how the steel market changes during the same period of time. Heading into 2021, we have seen iron ore prices increasing to near all-time record highs, but with the pandemic still ongoing, a vaccine on the rise, and different economies changing in there forecast for 2021, we are not sure where the market for these different materials will go from here.
Investors Are Saying 3-5% Increase for Copper
We know that most people do not follow what investors talk about very closely when it comes to the copper markets. But one thing that we do know is that markets have different fluctuations depending on how investors perceive the economic environment. One of the things that we have seen is a large metal impact with copper demand increasing 3 to 5% year over year for the next few years. Now, these predictions are generally taken with a grain of salt as we have seen copper run at the end of 2020. But to make a better decision we have to see where the economy is heading after the turn of the New Year.
Until then, keep on scrapping!
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