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What Causes Scrap Metal Prices to Fluctuate?

What Causes Scrap Metal Prices to Fluctuate?

If you are interested in scrap metal recycling, then you have surely done a reasonable amount of research on the different types of scrap metals and their prices. You may have found that the prices vary based on the type of metal. Even the specific metal prices fluctuate, often daily. In this short article brought to you by M&M Recycling, we will go over some of the reasons why scrap metal prices fluctuate. We hope that this bit of information helps you get the most money for your scrap metals. If you are looking for scrap metal buyers in the Atlanta area, then feel free to call M&M Recycling and speak with a friendly representative. At M&M Recycling, we strive to make scrap metal recycling seamless, profitable, and enjoyable!

Reason #1: Prices of Raw Metals

The metals produced by scrap metal recyclers are substitutes for virgin metals, or raw metals. Many manufacturers and businesses prefer recycled metal because it makes economic sense. However, if the price of raw metals drop then the price of scrap metals must drop as well to remain competitive. The basic rule is that when virgin metal prices increase, the price of scrap metal goes up as well. When raw metal prices go down, then scrap metal prices decrease also.

Reason #2: Price of Fuel

One of the advantages of metal recycling is that it uses much less energy than processing new metals from scratch. It makes economic and environmental sense. This does not mean that scrap metal recycling does not use energy. Whether it is coal, natural gas, or electricity, there is a lot of energy that goes into processing scrap metals so that they can be used again. When fuel costs are high, the cost of processing scrap metals goes up. This means that scrap metal buyers will offer less for your metals. Otherwise, they might operate at a loss and eventually go out of business.

Reason #3: Price of Transportation

If you have been collecting scrap metals, then you know how heavy they are and how much space they can take up. Moving these heavy metals from site to site calls for all sorts of transportation, including trucks, trains, and ships. When the price of transportation goes up, then you can expect your scrap metals to lose value.

This principle can also work in reverse, however. If the cost of transporting metals from abroad becomes too much, then the demand for domestic scrap metal becomes greater, meaning U.S. companies will be ready to pay more for a local supply of scrap metals and recycled metals.

Reason #4: The Scrap Metal Recycler

Every scrap metal recycling company is different, with different machines and processes. These differences will affect how much the company is willing to pay for your scrap metals. At M&M Recycling, we invest heavily into machines and our personnel to get great efficiency and pay our suppliers top dollar for their scrap metals. Call M&M Recycling to ask about our prices today.