Scrap metal prices are something that many people are interested in – just as in the way many people are interested in the current prices of various stocks.
We are way past the age of industrialization and production, but that era and its effects can definitely be felt and seen all around us today. One of the most important elements of the industrialization age is metal, and the part at which it has played is a rather large one. As a matter of fact, the whole industrialization age can arguably be seen as a time where the discovery of metal, its uses, the different things you can do to it and its possibilities to us as a civilization played an important part in our history. Today, metal is considered to be one of the most important elements in the world, paving the way towards new eras of construction, industrial design, home and improvement, as well as new discoveries in science and technology. This is one of the reasons why metal prices affect almost every single aspect of our lives whether we know about it or not.
There are many forms a metal can take, but two of the most popular forms that have been commercialized and are readily accessible for personal, commercial, industrial, and construction use, are virgin metal and scrap metal.
Metal and scrap metal – the similarities
Virgin metal is the form taken by metal which is considered to be the industry standard. This form of metal is considered to be “new” and basically untouched and unmodified. In many forms of trade and construction, virgin metal is the much preferred form most of them consider to be perfect for whatever purpose it is that they are going to be used, whether for construction, production or commercialization. Virgin metal is untainted and unused, and is considered to be at its strongest when it comes to its yield and durability. Current virgin metal prices are affected by a lot of different things, but supply and demand is almost always one of the factors that can heavily affect the prices on metal.
Scrap metal, on the other hand, are kinds of metals that are considered “used”, or in layman’s terms – “second hand”. These can be considered “bargain sale” metal, because from the term itself, scrap metal are pieces of metal which are collected from various sources or from various uses. It is considered “second hand” because it was previously used for a different purpose before fulfilling this purpose and then being discarded. Based on worldwide prices, current scrap metal prices are generally lower than virgin metal prices, but scrap metal prices are still heavily influenced by virgin metal prices. Scrap metal prices might be more preferable to virgin metal prices, but what are some of the reasons why there are scrap metal in the first place? While the word “discarded” might have a negative effect on most of us, we should consider the following:
- Scrap metal often comes from construction. The construction of a house, a building, or even a simple structure almost always uses some form of metal either for foundation, reinforcement, scaffolding, and various other elements that may or may not be an actual part of the constructed structure in the end. This results on hundreds of pieces of metal being scrapped because they have already served their purpose once the construction is over, and metal is one of those elements that simply cannot be discarded easily through burning or waste disposal and actually has some value especially if the structural integrity is still intact. This is one of the main sources of scrap metal in all parts of the world.
- Various junk yards produce scrap metal from different metals collected. As mentioned above, construction and various factories produce millions of tons of metal which are then collected so that they can be recycled and resold for a cheaper price.
- The scrap metal prices are much lower not because of inferior quality. Just because it has been used before does not mean it is structurally unsound to use again. As a matter of fact, various methods of reheating and reforming of scrap metal can actually strengthen the metal, thereby producing a much better alternative than the virgin metal
- Current scrap prices still depend on virgin metal prices. This will be detailed below.
What specific metals may be influenced by price changes?
So what are the different variations of metal? There are literally dozens of different types of metal with all of their specific purposes. Some of these types are Tin (which can be used for manufacturing), Lean (which is a relatively cheap metal and can be combined with other types of metal to produce a higher grade alloy), Copper (which can be very useful for electricity conduction purposes), and Iron (which has its general uses in construction). All of these types of metals have their different properties and flexibilities when it comes to uses, but most of them all follow the same rule when it comes to pricing: they are still pretty much affected by metal prices. It doesn’t matter when it comes to volume, quantity or even the different composition, when it comes to the prices of scrap metal, you can very much predict where it is going just by looking at the prices on metal.
What are the different factors that affect scrap metal prices?
Now that it is established that current scrap metal prices generally follow virgin metal prices, let’s now take a look at the different factors that might affect the different metal prices:
- Supply and demand can affect scrap metal prices. As with all of the different commodities, supply and demand plays a very important factor when it comes to the prices of scrap metal and virgin metal.
- Scrap metal prices can also be affected by politics. The biggest importers of metal, like China and Russia, can heavily dictate the state of scrap metal prices.
- The prices of scrap metal are also affected by importation. As with politics, if the leading importers of metal decided to raise the prices, then the whole world will feel the increase.
- Current scrap metal prices also follow oil prices. Oils is the number one factor that can affect scrap metal prices because the only way to reform metal is through heat, and oil is needed to be able to produce heat.