Factors that Affect Scrap Metal Prices

Price word cloud for scrap metal pricing trends when wanting to sell scrap metal.

Whether you’re a business owner that purchases scrap metal post-processing, or an individual or a business owner that sells your scrap metal for processing, understanding how scrap metal prices are set is important. Consider these primary factors that affect scrap metal prices in the United States, and feel free to reach out to one of our scrap yards or scrap mills for more questions about the current prices that we are offering to buy scrap metal–

Energy and Production Costs

Clearly, the costs of energy (and production) can have a large effect on the price of scrap metal. Energy costs include the costs of gas, oil, and other sources of electricity. When costs of processing are especially high, the price that is offered for scrap metal may drop in order to make up for the difference. That being said, if the costs associated with new metal mining are particularly high, this can make scrap metal and scrap recycling a more valuable endeavor.

Supply and Demand

One of the most basic economic theories that drives the price of scrap metal is that of supply and demand. This theory holds that the greater the supply of a product, the lower the price; the greater the demand, especially when supply is limited, the higher the price. When scrap metal is in low demand and high supply, scrap metal prices will be lower.

Price of New, Virgin Metals

Another element that can affect the price of scrap metal is the price of virgin metals – those that are newly mined and have not ever been used, recycled, or processed. When virgin metals are more expensive (which can be driven by energy and production costs and supply and demand), scrap metal becomes more valuable as an alternative to virgin products. On the other hand, when virgin metal prices drop, scrap metal becomes less essential, as industries can afford virgin metals instead.

Contact Scrap Metal Services, LLC for Fair Scrap Metal Pricing

At Scrap Metal Services, LLC, we always pay top dollar and fair market value for our customers’ scrap metal and are transparent in how our prices for scrap are determined. To learn more about our scrap pricing, what we buy and what we do not buy, and our locations throughout the United States, please reach out to us today.

We are a leader in the scrap recycling industry with a reputation of excellence, sustainable practices, and worker safety. Please call us today at 708-730-1400 or send us a message directly.

How Will Tariffs Affect Metal Prices?

tariff graphic concept for how changes in tariff will affect price of metal, contact a reputable scrap metal recycler

How Will Tariffs Affect Metal Prices?

Tariffs, including what they are and how they work, can be complicated to understand. What’s more, if you are employed or run a business in an industry that relies heavily on metal, you may be wondering how tariffs will affect metal prices. Here’s a brief overview of what you need to know-

What Are Tariffs?

Tariffs refer to a type of tax that is paid on an import or export to the United States. The tariffs imposed under President Trump specifically impose a tax on imports to the United States, which is assessed at the border (of course, in response, other countries enacted a tariff on imports to their own countries from the United States).
The basic idea behind a tariff is this: because it increases the cost of the good to be imported, the cost should act as a deterrent, urging Americans to purchase locally-manufactured items instead of imported ones. While this is a nice idea, in theory, the problem is that the vast majority of goods in the United States are made overseas, or at the very least, contain parts that are manufactured overseas.

What Do Tariffs Mean for Metal Prices?

The tariffs that were enacted by the Trump administration a few months ago have meant that metal prices have increased. To be sure, in January, the cost of Ingot Premium aluminum was 10 cents a pound, and by mid-March (after Trump had announced the 10 percent tariff on aluminum), the price had jumped to 20 cents a pound. Steel underwent a similar price hike – in January, the cost of hot-rolled coil was $661 per short ton, and in March, the price had increased to $836.

When Will Tariffs End?

If you’re in an industry that relies on the import of metals, you may be curious about when the tariffs will end. The answer is unclear, but as of September 2018, Trump has said that he’s considered more tariffs, not fewer. As a leader who strongly believes that imports hurt America, he’s been vehement in his conviction that tariffs will make America a stronger country and global leader.

Recycling Scrap Metal Can Help

While no one can avoid tariffs, and your business may be forced to import and pay high taxes on your imports as such, recycling scrap metal can help. The recycling of ferrous and non-ferrous materials like steel and aluminum reduces the need for additional imports from other countries, is good for the environment, and can be economically beneficial for companies.

We Can Help

To learn more about how we can manage your scrap metal processing and recycling needs, please call us today at 708-730-1400 or send our team a message today. We are a leader in the scrap recycling industry.