If you find yourself asking any of these questions, we have some information why it’s not easy to predict the scrap prices or have a reason why they change.
- What is the price of scrap copper?
- Where are scrap prices going?
- Should I hold onto my scrap metal?
- When will scrap prices go up?
Scrap Prices. It’s probably the number one topic in the scrap metal industry. Most of the questions the iScrap App Team gets through email and social media they often relate back to where the scrap metal market is going and where prices are. That is one of the reasons why we have our Weekly Scrap Price Report Series, where every week we talk about the current prices, the markets, where prices are, and what you should expect moving forward. While we keep you informed on what is going on in the scrap market, we explain why scrap prices change.
Why Do Scrap Prices Change?
There are several factors that go into how scrap prices are determined. Those factors determine how often or less often those prices change. Below are some reasons why scrap prices change.
Worldwide Reasons Why Scrap Prices Change
- Market Demand – Like anything else in the world, if there is a higher demand for metal for projects the prices can go up. Projects like infrastructure improvements, construction, product manufacturing, or other items, that require metal could be ramping up efforts. The metal types that are demanded could be completely different depending on the industry. That is sometimes why the steel scrap prices will go up but the copper prices are the same or even going down.
- Example: If there is a demand for more cars to be produced recycled steel and aluminum could prompt the scrap prices to go up a bit because those industries need the material.
- Stock Pile Levels Change – Countries like China and India are often the center of recycled metals in the world. If these countries have too much metal stockpiled, they may not want to keep buying so prices may drop. Or on the opposite side, if the countries realize they have too little scrap metal, they may be willing to pay more to get it into their countries and the prices may go up.
- Example: After the 2008 Recession, the scrap metal market dropped. Some countries had so much scrap stockpiled but no one was using it, so it was just sitting there wasting space. This caused international countries to lower prices significantly because there was much less demand for scrap metal.
- Market Requirements May Change – Some of the countries that buy a lot of the world’s scrap may change the way they buy or classify material. Sometimes the way certain metals are processed overseas is a bit different than North America. The larger markets that buy a lot of the world’s steel, copper, or aluminum could change the way they separate or sort material. This change can create a blip in the market and cause scrap prices to change.
- Example: In late 2017, China decided they didn’t want to keep collecting “the garbage of the world”. So, they began to turn down buying scrap copper wires and cables that didn’t yield a good return. So wires like Romex and regular insulated wires were no longer being imported and bought into China. This change caused scrap wire prices to drop because it was harder to get rid of the material on a global level.
Local Reasons Why Scrap Prices Change
- Transportation Costs Change – Scrap prices could change locally because of things like oil or fuel prices. Scrap yards have to transport scrap metal to bigger yards or to ports. With the cost to get a truck on the road being more, then yards may drop prices. This will allow them to make up the difference with the materials they buy.
- Competitors – Scrap metal recycling is a competitive industry. In busier metro areas there are more scrap yards competing with each other. So like any industry, the presence of competitors may change prices depending on how they are buying scrap. If scrap yards are fighting for customers in an area, this can cause some to raise prices higher than their competitors.
Suggested Reading: Factors That Determine Scrap Prices
What You Can Do To Track Scrap Prices
Similar to the stock market, the scrap metal market is constantly changing because of many outlying factors. Generally, scrap price changes don’t have just one reason why they change. The best option to keep tabs on where scrap prices are going is to follow along with our weekly reports on Facebook, where you can ask questions live. Another option is, check the iScrap App for current scrap prices and local reported metal prices. Also, sign up for our emails that go out with weekly reports and news about the scrap metal market.