Benefits of Low Scrap Prices

[Dr. Cadmium]

Less competition. Curbside items that disappeared in a couple of hours are now up for grabs for days or even weeks. Also, there are a lot more active postings for scrap in the free section of craigslist - and less competition for scrap at garage sales.

Less theft. There are fewer metal thefts being reported in the news. This brings less attention to the business; see the above point. Also, there is less chance of your accumulated scrap being stolen.

More opportunity. When the market gets tough, the weak links of the chain drop out first. Closing scrap businesses mean opportunity for you to expand your own. Also, many local businesses/neighborhoods have or will lose their local "scrap guy" and you can take over.

[wheeler_dealer]

Good observations. I noticed tonight while driving to the store there seemed to be more than normal amounts of scrap on curbs that would normally be gone quickly. I haven't seen any of the regular collectors out lately.

[knibloe]

any thoughts on where the market is headed? If we have the room, should we hold on to it?

[Recyclersteve]

I'll add another benefit- lower gas prices. Often times when prices on copper and steel have low prices, so does oil. So that reduces your cost for driving to the scrapyard and helps to offset the lower prices you receive.

I saw three college age guys playing basketball at a house in my neighborhood a few days ago and asked if the pile in front of their house was ok to take. They replied, "There's nothing valuable in there. It is just junk." It was almost all wiring and cabling- a decent sized box full. Hey, I'll take that kind of junk any day.

[hobo finds]

Yep I am not thrilled to get $45 a ton for steel but if I get it for free might as well take it, going to be going to the scrapyard anyway...

[wheeler_dealer]

If space wasn't an issue, I would save and compact the valuable scrap. Markets fluctuate any free scrap is money in the bank.

[knibloe]

If space wasn't an issue, I would save and compact the valuable scrap. Markets fluctuate any free scrap is money in the bank.

That is what I am doing. A woman from church contributed a wagon load to my boys. We took off the short steel, copper and aluminum and set that aside. Got $17 for the rest. Also a friend of mine had a garage fire. I parked my wagon at his house. He is going to load the old roofing on it and any other metal that is "junk." When he is done we will drive it the 2 miles to the scrap yard. I know we won't get much, but again every little helps.

[hobo finds]

Also look into selling things as is... Dirty Alum price % wise hardly fell compared to clean aluminum prices. Also with steel prices so low it seems that the yards are less picky about items in the shred, when prices were high my steel was very clean, now not so much.

[silversaddle1]

I don't know how long you guys have been in this business, but I've been doing it for 27 years. I've seen markets go up and down more times than I can count. Every time my scrap buyers call me and say "sell it now, markets heading down" I always start holding back on the better stuff (copper brass, etc.) as I have seen it time and time again that the market always comes back, and stronger than before. But this time I don't know. I think the market has fallen so much that even when it makes a comeback, it will not reach the highs we have seen in the past few years. I could be wrong, but I worry. Still, we are still piling up our copper and brass, etc with hopes that it will get somewhat better. Overall, I can remember in the past when I would sell bare bright #1 copper for 90 cents a pound and be happy, so it ain't as bad as I've ever seen it.

[Dr. Cadmium]

Silversaddle, you've been in the business far longer than I, but here are my thoughts on the current scrap prices:

1) The crazy high prices of early 2008 were a fluke, and the very high prices of the early 2010s were caused by conditions that won't return for some time.

2) Steel is lower than it should be, but it can still fall more than it already has. At times in the past it's been so bad that companies not only did not pay for it, but charged to pick it up. The yards I deal with in the northeast have all been open at least 25 years, some for over 100 years. None of them are holding steel - all of the piles have vanished. They don't have as much room as yards out in the western or southern part of the country, but I've never seen them all this empty. I know some are holding items like Ni 200, tungsten carbide, and other alloys because they don't take up much space and the prices are really low.

3) For the next few months and possibly further into the future, copper and brass have more room to go down than up, as they are still high compared to historical prices. Typically steel, oil, and copper move together. To have steel and oil drop as much as they have this year and not have copper drop as much is unusual.

4) I don't know about "this time" either. The word "deflation" is being brought up in conversations I'm having with smart people I know. We could be stuck in this market spiral/gutter for several years or even a couple of decades (read about Japan)

5) One old timer in the business gave me this gem, "I've never seen a business go broke while turning a profit." My general take from that, backed up by my own experience, is that playing the market is a fool's game. By it today, sell it tomorrow. Make a small profit, repeat day after day. Go long with stocks or silver, which take up less space.

[Recyclersteve]

Of course a big determining factor in deciding how long to hold onto your scrap materials before turning them in for cash is how much space you have and how tolerant your spouse/significant other (if you have one) is regarding your "mess".

But, that said, I look at it this way. If I wanted to wait for a higher price, I'd rather do it with something very dense that has potentially a lot of room to go up in value. So perhaps that would include something like brass or dense copper (as could be found in a transformer). Copper wire, on the other hand, generally takes up quite a bit of space and doesn't weigh that much. So I'd be more inclined to get rid of it quickly. Ditto for steel which often takes a lot of space, is dirty and doesn't fetch much money.

[messymessy]

I was selling bare scrap copper wire sometime in the 90's and getting $.45 per pound because I ran out of room to store it.

[AGgressive Metal]

I know there is no single explanation, but I think the combination of Chinese demand and easy central bank money (ie, low borrowing costs) meant that a lot of countries/miners ramped up raw base metal extraction and now with the slowdown in China and Eurozone, prices have fallen dramatically. Same with oil. Take a look at this chart of global nickel production!

[Recyclersteve]

I checked my records for scrap prices realized in the last couple years and found this little diddy...

6/29/13- Got $170/ton for steel and 25 cents/lb. ($500/ton) for electric motors.
4/20/15- Was told that the motors would have to be thrown in with the steel and got only $80/ton for them, well less than 1/6 what I got about two years earlier.

I understand deflation, but this is a tad ridiculous.

Oops, just realized we got a bit off topic. I believe this thread was titled "BENEFITS" of Low Scrap Prices.