7 Factors Affecting Scrap Metal Prices
When you’re considering selling your scrap metal, it can seem as though the prices change on an hourly basis. Why do scrap metal prices change so drastically on such short order?
In this post, we’ll take a look at key factors that affect scrap metal metal pricing:
Supply and Demand
It’s the one constant in almost every transaction throughout history – if something is in high demand and low supply, it will be priced higher. If it is commonly available and in low demand, it will be priced lower. The same goes from scrap metal.
Quality of Scrap
Is the scrap you have available covered in insulation or corrosion? You’ll end up with a lower price because the scrap service will need to remove the insulation or clean it up to get top dollar for your metals. Clean, high-quality scrap will always bring a higher price.
Quantity of Scrap
Are you selling a pound of aluminum cans or a truckload? If the scrap service can get more scrap metal with lower overhead, including a lower number of transactions and transportation, they can offer a higher price.
Location, Location, Location
Are you out in the country where the scrap will have to be transported longer distances to get it to market or in a city where a higher cost of doing business is at play? Expect to get a lower price for your scrap in those situations.
Time of Year
In general, when the weather is nice, there is more demand for recycled metals, so you can expect a higher price. This is especially true in the automotive and construction industries.
New Commodity Market Prices
When the price for the new metal changes in the market, you’ll notice a related change in scrap metal prices. When prices rise, for example, a company that typically uses new copper will change to recycled copper to help save costs.
With more countries worldwide becoming active in the industry, foreign market changes can affect local scrap prices. Increases in the Indian or Chinese market can affect the scrap metal prices you’ll see at home.
Now that you’ve had a chance to review the factors that affect scrap metal market prices, why not take advantage of those factors? Take a look at what the market is doing and contact us to see what we can do for your scrap metal needs.