Originally Posted by
wayne1956
Another issue is fuel prices. When fuel prices fall, so does
scrap prices (especially shred) as it does not cost as much to ship from point A to point B, in addition to cutting the cost of creating new steel from ore. OPEC has voted to cut production, so if they keep to that and price of oil goes up, so will fuel and probably shred prices.
fuel and scrap are linked to the global economy. if the global economy is hot the price of oil can not be low. production can just match need with a proper global economy. thats why oil (gas) is still low; its not being utilized to full potential. the same is said for metal. its aa commodity. if global production of things (wether it be commercial buildings, cars, or laptops) is not high enough then scrap is not utilized. I have scrapped a little for a lot of my life and I don't remember 2.5 cent
scrap metal prices before even in short down periods in the economy. when was the last time you remember an extended period of time where scrap steel was 2.5 to 3.5 cents for so long? the difference is the length of the period of the repressed economy.
the difference is OIL production can be cut enough to produce high oil prices without the global economy actually being stronger but
scrap metal is a thing of industry. The price paid for scrap may go up a bit with the price of oil but its main driving force must be economic
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