Just my thoughts on where I think scrap metal prices are headed. I believe that we're in a bubble and I'm afraid it's going to burst soon. Metal prices boomed especially during the housing boom. Re-mortgaged homes became ATM machines for many. Big Box sales of Chinese made goods soared and so did Chinese demand, and to a lesser extent India, need for scrap metals so prices increased to meet the demand.
Well, the housing bubble bursted. Big Box stores are closing down, malls are emptying. Where does China turn to maintain its production? Europe? No, they're having the same or worse problems than us. On top of this we have high unemployment and we've let industry export all our high paying jobs save a few. Congress is all balled up and can't figure out how to create American jobs (can they spell INFRASTRUCTURE?).
So, I believe that we're seeing just the tip of a downward slide in metal prices. It is smart of us to find reuse avenues for a lot of what we collect. For instance, people installing home power systems would love some of the heavy copper cable we find. Low voltage DC systems require them. Same for batteries - large batteries are ultra expensive new. Most all utilities have backup power with big exide style battery banks. In my experience they rotate them out way before the end of their useful life.
While thinking about alternative energy, you might consider Solar PV panels. The cost of new has dropped from around $5 per watt to about $1.50. Used ones that are still in working condition should be very cheap and in demand for a good profit.
Thinking about Gold too. Usually when the economy does poorly gold does well and that's been the case so far. BUT, this time our on-the-street economy is doing poor but wall street and the stock market are doing very well. Gold historically has been a hedge against poor stock performances and the like. With Wall Street doing well, I'm wondering if we're seeing the beginning of a slide in gold as well.
Nothing lasts forever. We tend to believe that when in these bubbles that this is the way it will always be. The dotcom bust, housing bust, the 20th century american dream bust are all testament to the ups and downs.
Just my thoughts. Watcha think?
hey, somebody else from NorCal!
I vaguely remember scrap prices being really low in the early 2000's long before I was an actual scrapper. Not too long after high school I bought a ford explorer on eBay which ended up being a turd. Scrap yard in Chico only gave me $75 for it in 2004. Nowadays I get $450 or so for those turds. Hope metal prices don't go back to what they were or I'll be looking for new work.
I think in therory your absolutely right. And if things go the way some forcast and have for a while, water food guns and raw goods to barter and trade with will be the real mediums of exchange. Just my .02.
For you Newbies back in the early to mid 90's they used to pay me 15.00 aton for tin and appliances . Thats why I gave it awy to scrappers as I was running a second hand appliance store. Let's Hope things don't return to those levels. However I saw a new chevy volt at the dealer today and it was 41,000.00 as long as cars are terribly overpriced I don't think scrap prices will ever plummet to those levels. I didn't think i would ever see real estate do what its done either.
the chinese, the asian market, is run by folks who are considerably more intelligent than the u.s. they have raised the wages of their citizens 3 times in the last decade. the average worker in china now makes over twice what they did when little bush took office. which gives those workers disposable income to purchase goods and services. china is very restrictive on immigration. they protect their country and citizens. so they do not lose jobs to imported labor. or see money being exported from the country.
the asian market will slow, as exports drop off, but it will not collapse. a healthy economy requires customers. the chinese have assured that they will have those customers.
consider how many customers america would have if the current minimum wage was $15/hour and we did not allow company's to hire non-americans. unemployment and under employment would drop. tax revenues would increase from sales which would create more job openings as company's grew. and that would create even more scrap items as employed individuals would replace those older items with new items. western union would see it's money transaction drop by over 50%. that money would then be spent in the u.s. as well.
there is a lot of support for gold. i doubt if it gets lower than 1500. i expect it to get closer to 2k.
we could eliminate unemployment and greatly reduce dependence on social services if we repaired or rebuilt that infrastructure. bring back the old wpa and ccc programs. take all of that money we spend in foreign policy and spend it here instead.
there are viable solutions and this country can fix the problems.
the problem is the 535 children in washington.
Good insights. thanks!
I don't how it was down in the States but up here in 2009 we were getting close to $400 a ton for mixed tin. Now it is $265.00 not great better than last year when it was $185.00
Plus the yard I have been dealing with just bought the gravel yard next door which is huge.
So I think you are seeing something that they don't
The Scrap Yard is called AIM American Iron and Metal
They own a few yards all over the place.
I think the biggest thing right now that will impact scrap prices is the end of the war. At my company we noticed the price of metal drop a little and were not sure why.
On another note, I hope the price does drop again, you will see these new vultures go back into their caves and let the scrapping to the truley dedicated recycler. Back when the price was $20 a ton I was the only scrapper on Craigslist list and I would have a full load of scrap every day of the week. Now that the price is high there are hundreds of ads on Craigslist along with a flagging war and I can barely get a load a month because of the vultures. When the price goes back down and the vultures actually have to work for the money they will be nowhere to be found and back collecting wellfare.
Ok rant over, you can now enjoy the rest if your program.
Last edited by CMHN; 01-10-2012 at 07:13 AM.
400/ton sounds nice.
Hey CHMN, when scrap was 20/ton, were you cashing it in, or stockpiling it for when it climbed back up?
Same problems here with people spamming CL for metals. Imagine it's a problem every where.
I was taking them in as I got them, with the price of shred as low as it was, it sure made sense to break down everything you could and sell what you could to make extra money, but it was easier it seamed.
one of the reasons there is so much competition in the collection of scrap is all of the folks who are laid off found a way to make a few dollars. many of them use scrapping as extra spending money. they are not trying to live off of what they scrap. one of the reasons the price is going down is so many are collecting scrap that do not care what the price is.
the consumer who used to be your source of scrap has now become your competitor. they no longer generate as much waste, they learned to sell their waste, and now have learned how to collect that waste.
it has all been created by the lack of jobs.
does not matter of you liked old bill and his politics. he was right.
it is all about the jobs.
put those folks back to work at decent jobs and you will have more waste to collect and less competition.
don't forget about India...they will emerge as the next China and will need materials just as badly. Look where the investors are putting their money - shipping. A lot of traders expect large contracts for scrap to India in the next few years and are investing in transportation and metal futures.
I'm banking on scrap to stay steady or raise slightly. Like the price of fuel, we'll never see super low numbers again.
I didn't think i would ever see real estate do what its done either. <<
i am guessing you are not old enough to remember carter and reagan. over priced over leveraged and 14% + mortgage rates. and then it all came crashing down.
recycling secrets is correct. real estate has not hit the bottom yet. either the cost of goods and services will have to fall or the number of employed and their wages will have to rise.
the economics of taking from the poor and giving to the wealthy have always lead to recessions, depressions and the total collapse of countries. a large middle class is an absolute necessity for a thriving economy. we have lost our middle class. the current economy is proof.
you're right, I was born in '77 so that era isn't very memorable. However one significant difference is the level of globalization and interdependence of the world economy.
Perhaps scrap is like gold, when the economy strengthens, scrap prices will fall? However its a resource just as oil is, and necessary for growth around the world. Plus there's a greater economic incentive to recycle materials than ever before.
Short of the zombie apocalypse, we're not going to see $20 scrap again. Yes things can get worse, but I'm not a gloom and doom guy.
Also, something odd about current housing prices - we're seeing houses sell for much less than replacement cost. This concerns me. Even used cars always sell for more than the market value of their components...but not houses? Something seems artificial about these low prices. I agree we're in a correction, but something isn't right here...
I think the prices for existing houses is so low is because there are too many houses avalable for the number of buyers in the market. Just wait till more of the shadow inventory starts showing up!
Also, something odd about current housing prices - we're seeing houses sell for much less than replacement cost. This concerns me. Even used cars always sell for more than the market value of their components...but not houses? Something seems artificial about these low prices. I agree we're in a correction, but something isn't right here... <<<
an item is only worth what someone is willing and able to pay for it. there is an amazing amount of real estate on the market. a lot people who would like to buy but lack the ability. the remainder are looking for a deal. i don't need a house, but if the price is right, i might buy a couple more.
the price of used vehicles is down. the sell thru rates are dismal. go to one of the dealer auctions. half the cars being run thru will not make the reserve. and the rest are being bought cheap. some of the automotive yards are buying at the dealer auctions because the parts are worth more than the bid. people are repairing rather than replacing.
and the rest. well, you see em on the road every day. those are the ones you wonder how they ever got it started and when it is going to finally blow up. the dually running 4 slicks in the back. the mosquito fogger that runs a quart of oil for 100 miles.
check out the warranty's being offered on used trucks. a 4 year old titan can qualify for an 8 year 120,000 mile factory warranty. some dealers are giving life time drive train warranty on those. i bought an 04 silverado last year and got a 60,000 mile factory warranty. getting close to time to trade again. that is all in an effort to increase sales.
if you want me to write a check for that used truck or house, better be something really sweet about the deal. otherwise, i will put that money in a truck load of computers or several gaylords of boards.
yes the automotive fleet in america is at its oldest point in history, but we're not seeing those super low prices here. A lot of folks just holding, dealers as well. Its just sorta stagnant...But there's money out there for the stuff people really want. Priced a diesel pickup lately?
Look at any restaurant or mall parking lot on a Friday night. Parking lots full of new cars. Recession my a@&.
I agree to a point about houses being worth what people will pay...the value of a commodity is in peoples confidence in that item. No one has confidence that their house will be worth more in a few years than it is now, so many rent instead of buy.
here's the thing...there's only so many houses, and so many condos and apartments, and right now there's a growing population. So eventually its got to even out based on supply and demand. As rentals become more expensive because they're in demand, ownership will again be seen as more attractive.
Right now we're thinning the herd of houses - the crap gets demolished, the mediocre ones become rentals as people take advantage of pricing to move up and out, the great places will always be expensive. Bad neighborhoods get worse because the lowest common denominators can move "up" to a more visible - and permanent - location.
Banks aren't just going to dump a property they've invested 200k for 25k...The sky is not falling. Its just low clouds.
Last edited by IronPirate; 01-10-2012 at 04:29 PM.
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