Buying, selling, and recycling scrap metal has become increasingly popular, creating a booming scrap metal market. You can recycle scrap metal from beat-up cars, tins, cans, wires, and so on. One thing you may have noticed while scavenging through steel salvage yards in Chase, MI, is that the price of scrap metal can change quickly and often. Here are four factors that play a role in pricing scrap metal.
One of the greatest influences on the price of scrap metal is the cost of fuel. Every type of metal requires extreme heat to be made into basic materials and products, from wire and sheet metal to rods and bars. To accomplish this, manufacturers use coal, natural gas, and electricity to produce the hot temperatures needed to make metal pliable. When the costs of these fuels rise, so does the cost of the scrap metal at salvage yards.
The global market plays an important role in how much salvage junk yards can pay you for your recycled scrap metal. A majority of scrap metal (and garbage) is shipped overseas. International markets pricing for exported scrap metal gets monitored and evaluated closely.
Rare metals imported to the U.S. also play an important role in the price fluctuation of scrap metal. Countries might raise or lower export costs and taxes for scrap metal. These fluctuations can be based on how much importing rare metals cost, and sometimes, the political standing between countries.
Prices for recycled scrap metal on the domestic market are then adjusted based on the cost of importing and exporting costs overseas. This ultimately affects how much you can earn from recycling scrap metal on any given day, week, or month.
Supply and Demand
The price of scrap metal depends largely on supply and demand. One example is steel. If the economy slows down, less cars will get built. This will lead to a decrease in the demand for steel, which would result in lower prices for recycled steel at the local salvage scrap yard.
Another example is copper. When there is a housing boom, builders will need enormous amounts of pipe and wire to build homes. This will cause the price of copper to increase at record speeds. The increase in the price of copper materials results in a larger payout to you for recycled copper.
Virgin metals also play a significant role in supply and demand of scrap metal and the price naturally fluctuates. This fluctuation influences the cost of virgin metal and the price of scrapping the metal. This causes higher demand for scrap metals, because producing them is cheaper, and you end up getting a better price for recycling them.
Where you recycle scrap metal has an impact on the price. Sellers and brokers, who usually have large quantities of scrap metal, are looking to make money on materials they buy, and this will influence how much money you’ll receive. Scrap yards need to understand the different costs for producing, manufacturing, importing, and exporting scrap metal. They must also know what metals are and aren’t in demand, in which areas, at all times. The best salvage yard in Chase, MI uses these figures when calculating the best, fairest price to pay for small to large amounts of scrap metal.
If you have any questions about why prices for scrap metal vary, contact Fair Salvage Company today!