What Is Scrap Metal Today
Scrap metal still consists of used pieces of metals that are sold by weight and purity. In the United States, most scrap metals are made of copper, iron, steel, aluminum, gold, nickel alloys, and brass. Scrap metal includes all forms of the metal such as tubes, pipes, wires, tools, machine parts, and small forms like metal shavings. The costs of processing recycled metals are usually lower than refining raw metals. Typically, it involves melting scrap into ingots of metal at a particular purity. Recycling benefits the environment by reducing the amount of metals in waste systems as some metals may contribute to ground and water pollution. In the Information Technology age, scrap metals also involve electronic wastes and recycling.
Value of Scrap Metal $
Many factors contribute to the prices paid for scrap metal. Prices vary with the type of the metal, the quantity, the location, and the prevailing spot market price. A basic distinction is between ferrous and non-ferrous metals, and most recycled metal is ferrous. When considering the type of metal, one must further determine the grade. High-grade scrap metals have high percentages of the metal with low amounts of tarnish such as rust or carbon from burning. Buyers pay more for top grades than lower grades, which require a greater amount of processing to yield pure metal. Quantity also affects scrap prices; large amounts command higher prices because the demand among scrap buyers for large quantities is higher than for small batches. Transportation of scrap is a factor for sellers, the weight and bulk of scrap metal make it more profitable to sell locally, one might gain a better price in a distant market but lose money in fuel costs.
Spot Market Price Fluctuations
Spot market prices can change daily or even more frequently. Standard financial exchanges post current prices such as mercantile exchanges. The posted prices are for raw or virgin metals, and processed metals such as stainless steel. Buyers set scrap prices as a percentage of the posted rates for virgin metal. The value of the metal as a commodity depends primarily upon demand. For example, the price of copper used in electrical wiring rises as demand increases due to housing, commercial construction, or structural renovations. Demand can also be seasonal as construction in the United States increases in warm weather months. A short supply can cause prices to rise, and this can occur due to news events and political situations that affect the free flow of goods across international boundaries. Conflict or political tensions can result in trade disputes, which affect price and availability of raw materials or finished goods.
Effects Of Fuel Prices
The price of scrap metal increases directly with rising fuel costs. Processing raw or virgin metal or re-processing scrap metal requires heat energy. Heat energy in metal processing comes from fossil fuels such as natural gas, coal, or petroleum. The costs of refining scrap metal rises with the costs of fuels. Therefore, the spot market price of raw metal such as copper rises with the price of fuels needed to refine the ores. There is also a cost for transporting ores and that too involves burning fuels.
Global Markets For Scrap Metal
Exporting and importing comprise major portions of the global market for scrap metal. Many nations depend upon foreign supplies of scrap metal in lieu of domestic mining and production. China and India continue as major buyers of scrap metals, and their monthly market fluctuations affect global prices and supplies. Speculation, currencies, and inventories play a greater role in the modern global marketplace than before the conversion to high-speed electronic communications. Market fluctuations impact distant markets and investor speculation can determine prices without regard to demand, such as through stock and bond transactions based upon investor behavior and financial markets. An emerging hybrid of scrap metal trading is electronic scrap that involves metal imprinted circuits, and metal electronic parts.
Prices And Trends
Global Pricing Patterns