Possible Future of Scrap Metal Prices Not So Good

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.

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Originally Posted by wildbillhappy

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.

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I hope you are right, but i doubt it. As far as real estate. It's still got a ways down to go before people with the crummy jobs left can afford to buy them. til then down, down down.

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Originally Posted by CollinsHaulin

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.

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Hey and you're not far away either. Back in the 80s scrap prices were around 15 to 20% of what they are now but living expenses were about 50% of what they are now. It was a lot tougher making a go of salvaging then but you learn to just work smarter, talk to more folks, sell more for reuse. The other side of the coin is that as things get bad or worse more and more folks will be looking for deals - ie. good used stuff - another reason for reuse. I stockpile all the woodstove, lumber, roofing, building materials, plumbing.... that i can get my hands on. Good luck.

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.

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.

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Originally Posted by rbrooks715

I didn't think i would ever see real estate do what its done either. <<

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I didn't either, but in hindsight its not a surprise. When I was shopping for a fixer upper house in the early 2000's even rough houses seemed overpriced, but we all assumed that was the way it worked. Buy a house, keep it a few years, and it beats inflation. Oh well!


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.

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Originally Posted by freonjoe

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!

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Or looking at it another way. We need more buyers for the many houses available. Higher wages, more jobs = increased number of buyers. Home prices are low compared to the high of the bubble, but in many areas they are still higher than they were before the bubble.

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Originally Posted by CMHN

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.

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I think you are right about the end of the war. I too have done a lot of scrapping at $20 ton iron, 25 cent brass, 60 cent copper... I didn't end up scrapping a lot of the iron because I could sell it as useable but then the economy was better back then too. If I tore down an old warehouse, I'd have all the corrugated tin sold before I ever took it down. Same with water tanks and towers... It's tougher to sell for reuse now, but I think essentials will increase as economy continues to decline though I may end up trading a lot more than selling for cash - barter works too!

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Originally Posted by rbrooks715

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.

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Right on! But we have to be sure that U.S. companies hiring well paid U.S. workers get the infrastructure work. I'm thinking the new San Francisco Oakland Bay Bridge. The pieces of the bridge are brought on giant barges from China.

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. <<

there are more houses for sale than there are buyers. well, qualified buyers at the very least. you are going to have calculate the ability to buy into your formula. our population is growing, but at a slower pace.

Banks aren't just going to dump a property they've invested 200k for 25k...The sky is not falling. Its just low clouds. <<

they are and have been. check out some of the real estate auctions and the prices on reo property. you can also browse thru trulia. hud homes. or similar sites. it is true that many of these need repair. i just bid on some houses in atlanta. they originally sold for over 250k. 15 years later and they brought 45 to 50k. detroit is even worse off. so is vegas. sometimes a loss is the best answer. write it off and put that capitol back to work.


vacancy rates for rentals around here is 15%. eviction rates are up. and we have a lot of vacant property for sale.

the problem is not a lack of interested buyers or renters. regardless of what the true number of unemployed is. unemployed folks normally do not have the money to rent or buy. they are going to find it difficult to qualify for a loan to make that purchase.

mall owners like to charge rent based on door counts. the more people counted coming thru the doors supposedly equates to higher sales. sounds reasonable. until you stand at the door and count the number of people leaving who did not buy anything. 100 people walk in and 90 walk out empty handed. no purchase. true door count is 10. this is even worse in real estate or used vehicles. 100 people are interested in it. only 10 can afford it. and how many of those 10 will want to buy it. that 10 is the potential customer base. if none of those 10 want it, no sale.

is the sky falling? well, i guess that depends on where you are standing. can we change that. of course.

i know i am glad i don't have any property in detroit.

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Originally Posted by IronPirate

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...

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I don't see any newer homes going for less than replacement, but I do see some older ones going like you say. Maybe homes are becoming more like cars and other things. As they get older, more worn out, they depreciate in value. I question replacement value too. I've seen same contractors building and selling houses for 400k and not so distant past building and selling similar homes for 150K yet seemingly still making a profit. The building trades are in shambles, low paid labor is king. I would think, relatively speaking, it is much less expensive to build a home now than it was in the 70s and 80s when you still had union plumbers, carpenters, electricians and viable apprenticeship programs. Couple that with lumber going for 1/3 of what it was going for at height of boom.

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Originally Posted by IdahoScrapper

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.

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I know you addressed to CHMN but I'll chime in. When I was salvaging (I like this term better than scrapping because it implies reuse over scrap) back when iron was $15 or $20 a ton there was no climbing back up. It had been that price for awhile and no reason to think things would change. Thought I think prices now will fall, I don't bank on it. I don't ever think it makes sense to hang onto things hoping for a price increase if you paid cash money for it. For me, no matter what prices do, I can always make more turning things over as quickly as possible so I have that cash and then some to reinvest in more. Waiting for a 20% price increase that may or may not occur will bring you much less profit than selling $200 worth of stuff today, using that money to buy more tomorrow, selling that... on an on. Cash flow has always been most important to me. If I sat on things the cash would not flow.

Look at any restaurant or mall parking lot on a Friday night. Parking lots full of new cars. Recession my a@&.<<

lets first look at all of the closed malls and restaurants. they are no longer in operation. ergo, their are fewer over all customers. then we will look at the % of the total population that the remaining business' represent. is their current customer rate simply a result of of gaining new customers from the business' that have closed? and then we can look at their seating ratios vs gross and net during the rest of their business hours. is friday the only night that is profitable? what is the net rate comparison. how does that compare to the last 15 years.


Parking lots full of new cars. Recession my a@&<<

i am curious. do you think the economy is thriving and healthy?

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Originally Posted by RecyclingSecrets

I know you addressed to CHMN but I'll chime in. When I was salvaging (I like this term better than scrapping because it implies reuse over scrap) back when iron was $15 or $20 a ton there was no climbing back up. It had been that price for awhile and no reason to think things would change. Thought I think prices now will fall, I don't bank on it. I don't ever think it makes sense to hang onto things hoping for a price increase if you paid cash money for it. For me, no matter what prices do, I can always make more turning things over as quickly as possible so I have that cash and then some to reinvest in more. Waiting for a 20% price increase that may or may not occur will bring you much less profit than selling $200 worth of stuff today, using that money to buy more tomorrow, selling that... on an on. Cash flow has always been most important to me. If I sat on things the cash would not flow.

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I kinda see your point in turning items asap.

I had a pile of copper that would have gotten me another $1,400 to $1,700 had I waited a year/18 months. Percentage wise I don't know what that comes out to. Wishing I had held onto it, but a person can't foretell what the market will do.

What period was scrap at 20-30/ton? I've only been serious about this for roughly 2 years, and prices have been fairly decent from then till now.

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Originally Posted by rbrooks715

i am curious. do you think the economy is thriving and healthy?

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My glass is half full.

In 06/07 I was getting around 300/ton iron and 3.50/lb for copper in 08/09 it dropped to 65/ton and .90/lb but is now back at 210/ton 2.80/lb

used car prices down ? $15 minimum wage ? dam* pass that bong over here. we have become a service society, due to over regulation. raise the min wage to $15 and wipe out half the jobs left in the country. good move. :). oh and by the way that 4 year warranty on that used car, its already figgured in the price.

raise the min wage, do you think cost and there for price wont go up to compinsate, and at that point what are you going to do about those on fixed incomes and the unemployable.

my first job in the big city was a donut frier at $65 a week in 1962 had my own place paid for my own food, own car and was 18, and a partier, still no matter how hard I tried I could not spent all of that $65

Did not read the whole thread...Its been a long day but here are my 2 cents

Part of the reason for the scrap metal prices going up is not only for the fact that scrap is now worth more...but that there are more YARDS that have opened up. When you have two yards they have to beat each other in price to get the scrap..the one who gets more for there steel will stay around longer and get more people with the one with a lower price as to work hard on giving better service like they will unload or this or that to get the scrap they need

So not only did scrap metal became more...but you have MORE yards that have opened up causing a bidding war. Trust me..if they can get away paying only 20 a ton for steel....they WOULD..but they cant because another yard is paying this a ton.

Same thing when it comes to e-waste...there where very few buyers...that keeped prices low....but as more and more buyers hit the market...price will go up...both the long term buyers as my self...will bring our price up to try to kill the other yards (we need the scrap to feed our family...).

Its hard to explain but anyone who has ever run a yard...and or had a store...you will have those people who will go else where for a better deal...you always have to work on our pricing and make sure you are still turning a profit.

Three simple words supply and demand. 2001 44 steel mill in bancrupty Americas production hovering at 25 percent capacity or lower. Many mills mothballed or idled. Fast forward 2011 zero mills in bancruptcy and capacity at 85 percent or more. 1500 industrial plants in manufacturing are closed each year less scrap more mills fighting over less supply. The price of scrap isn't going lower anytime soon. I got news for you at the rate we are closing manufacturing plants we have thirty years left of manufacturing get ready for the price to go higher in the future. Its a 90 billion a year industry. I remember when I couldn't get more then a hundred for prepared per ton and the market moved up or down five or ten dollars a month.

I think... The price of fuel is keeping up prices.

You hit the whole issue square in the head, Fuel prices are at the real heart of scrap prices vrs. new mining extraction. The Leeb analysis described in Game Over is a comprehensive review of what we have left in both oil and metals. I would say this is a must read if you are in the scrap biz. The price of oil and scrap will more or less "stairstep" over time. From all the research I have done copper,platnium, and palladium are the sure fire "strong" metals, scrap steel also looks good since there is not much easy to get to iron ore for new mining. If I was wealthy I would physically acquire and horde copper (there are wealthy investors that have done (are doing) this, 40K lbs in conex boxes), 2 billion people are electrifying their lives over the next 10 years. Unlike gold "real" industrial metals are hard to create bubbles around due to the price being tied to legitimate demand and growth. Ever study 3rd world economies, they work hard to develop and export value to other markets, sound familiar? We already have record levels of metal theft as the poor try to remain solvent, this will increase as prices increase. We will part ourselves out to meet the demands of world markets. The only thing I can see to disrupt this trend would be a total oil embargo from the middle east..that would stop Eastern development. The Chinese have publicly stated they would be comfortable with 200/bbl oil since they could control the market at that point, that shows a very confident long term out look for our scrap metal.

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Originally Posted by RecyclingSecrets

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.

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No offense but recheck you gold facts. The last 10 years gold has been on a roughly 250-1650 bull run while the S&P is up about 165 points. Gold moves with alot of things. Interest rates, turmoil, the dollar strength, leverage in the stock market, you name it. Be careful linking it to the economy only because you trade that way and your going to get broke right off. We get a melt off in the stock markets and the first thing traders are dumping to cover their leverage in stock trades is winning positions. Gold has been a nice hedge on a weak dollar and low intrest rates but traders start taking margin calls on 50 to 1 plays that are going bad and you can bet gold is going negative 10-15% like yesterday.......just something to chew on.

Wall Street's had a nice rebound off the 09 lows. Gold has done quite well in that time frame too as it did set a unadjust for inflation all time high in that period.

So 2011 vs 2010 for me was less pounds of stuff but more $$. Best prices I have seen on many items, but also high gas prices and the most other scrappers out there! I do agree that there are many new yards and other places purchasing items in the last few years!

well... we made it back to 15-20 a ton.
And re-use is king once again :)
It was a good ride while it lasted