Whoever said that all prices of metals should be the same…was obviously a little crazy. That is like saying that all car prices should be the same, or any other material or commodity should be priced the same. We wanted to give some perspective as to why scrap prices for different metals are completely different from one another. It’s similar to what we’ve talked about before for the different factors that determine scrap prices, it directly relates to different metals. Read more about why different metals have different prices.
Reasons Why Scrap Prices Are Different:
- World Supply – There is much more supply of iron ore in the world then there is copper and there is more copper then there is gold….for these simple reasons you are going to have certain metals be worth more money then others.
- Usefulness – How useful a metal is will play a huge role in how much money it is going to be worth. If copper was not a great conducted it would not be used as much in transmitting data like phones, computers, or thousands of other electrical devices and connections. Something like gold is more rare and while it could be used a good conductor (that’s why gold was used all of the time in the 1970-1980’s on circuit boards), gold is very expensive compared to copper or even aluminum.
- Recycling Process – How easy is a metal to recycle? Let’s compare steel to aluminum in the recycling process. According to ISRI, aluminum cans can be recycled and back on a store shelf for reuse in 60 days. Steel on the other hand is a much more complicated process. It often has to be put through more steps and has more residue on it, thus taking longer for it to get through the recycling process….plus there is much more iron ore in the world allowing it to be a slower recycled product.
- Your Yard’s Abilities – This is on a smaller scale of scrap pricing. Depending on the equipment your scrap yard has to process various materials, it can determine the difference in pricing. For example, if your scrap yard has a shredder for steel and iron, it’s much easier for them to process and make money on. However, if they don’t have a granulator for copper wire, their wire prices may not be as strong because they may be processing it through a more labor intensive system.
There are so many reasons why we think that scrap should be scrap and the price should be the same…but if that was the case it would open up a big box of worms and would be very difficult to really get a good grasp on.
Metal prices have to have a fair chance, otherwise they would be looked at as more of an equal playing ground and that would leave some metals not getting recycled due to their low weights and would create a very awkward predicament.