Why Do Scrap Metal Prices Change?

Just like anything of economic value, scrap metal prices tend to fluctuate significantly, and the market can be just as temperamental as currency exchange rates. This poses a challenge when it comes to choosing the right time to take your scrap metal to be recycled, as prices can change overnight in some cases due to both domestic and global affairs.

There are several factors that impact scrap metal prices - some are international and thus out of our control, while others are closer to home. As a rule of thumb, it’s a good idea to keep up to date with what’s happening in the market and to time your metal scrap yard visit accordingly. This blog covers the most influential factors that you should take into account in order to maximise your scrap metal profits.



Global Factors

The predominant authority that determines scrap metal prices is the London Metals Exchange (LME) - a prestigious organisation who take current global trends into account.. There are several criteria that they consider, including changes in demand, currency variations, economic events and the risk of oversupply. The LME’s prices are taken as a universal standard for metal scrap yards and suppliers worldwide.

Although LME does a lot of the hard work for you, staying engaged with the global economy and any impactful changes that occur is still beneficial. One change that no one could ignore was the Covid-19 pandemic, which affected every possible industry. With scrap metal supply suddenly cut off and many scrap yards forced to close indefinitely, prices skyrocketed. Now that the world is recovering from the pandemic, the scrap metal economy is slowly plateauing again - though there is an occasional spike due to supply and demand complications.

On top of major global events, quintessentially scrap metal prices come down to industry demand on a nation-by-nation basis. Many industries - technological, construction, automotive and electronic, to name a few - are dependent on scrap metal, and if demand increases or decreases then it impacts scrap metal prices greatly. This can be seen currently in the USA, where scrap metal prices have dropped due to declining demand overseas.

Domestic Factors

Location is important when it comes to domestic factors. Depending on whether a metal scrap yard is near a large city or not, it will affect the cost of transporting large quantities of scrap metal - the further away, the more expensive it is. For this reason, scrap yards may have to inflate their prices to offset transport costs. It’s also essential to be aware of petrol prices - which can be just as volatile - as scrap yards may change their prices accordingly.

Scrap metal prices can also be impacted by competition in the local area. For instance, the opening of a new metal scrap yard may mean that existing scrap yards need to lower or raise their prices in order to stay ahead of the competition and retain their customer base.

Competitively Priced Metal Scrap Yard in South Wales

Broughshire Waste Metals is a highly competitively priced metal scrap yard based in South Wales. Dealing with a vast range of scrap metals, we take the most responsible approach possible to recycling, whilst also paying high prices and adhering to environmental legislation. For more information about our scrap metal or waste management services, please get in touch.