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?
Bookmarks