China clearly has a major impact on scrap prices, I just read that their manufacturing index is below 50 which is seen as a bad indicator of their economic health. Anyone understand how that number effects scrap demand? My yard is new and I am more exposed to price swings than when I was alley running. Thanks in advance
When global industry falters, investors bail out like rats abandoning a sinking ship then head into the gold and silver markets for cover bring along higher demand for the precious metals market which brings up the cost of a troy ounce of gold or silver.
I do not think that we have any economists on the scrapper forum, you will have to learn to read the flags yourself. A good place to start is by reading publications from Kitco.
thats bad news for the scrap business.. market is climbing based on paper trade/speculation but the growth numbers in manufacturing/production (or lack there of !) are showing nothing but negative signs... 2012, by the numbers, is not shaping up very well. Consistent bail outs by printing money and other countries (looking at this at an international macro level) has to come to a screeching halt.
China started to cool its heels back about 4 months ago after they filled their Christmas orders for hard goods , toys and other crap. The economy of the world has them nervious, after the Christmas rush it may well all come to a screeching halt. Most of the world has been in manufacturing and world trade several 1oo years. China has been doing it for several thousand years. we in the western world can have patience for a few weeks. eastern and asian/orental countries can have patience for several 100 years. We plan for 5 or 10 years they plan for 50 or 100.
I hoard good steel and Iron, puleys. gears,rollers angle iron etc. If the economy collapses as I believe it will, those items and scroungers like us will be a valuable trade comodity.
but thats just me.
Thanks for the feedback everyone, dicey question to say the least. Fuel prices and scrap value used to follow each other....