Understanding the Factors Influencing Scrap Metal Prices

 

What makes scrap metal worth more?

 

High demand for scrap metal drives up prices to seller’s benefit. Metal, like all commodities, is subject to fluctuations in the Global Economy.

Construction, manufacturing and automotive sectors rely on enormous quantities of metal for production. From new transport networks to big skyscraper projects to the latest high-tech vehicles, in periods of boom, these industries look to source metal not only from mines (‘virgin’ metal) but also from scrap metal to meet demand. 

The availability of scrap metal supply to meet these demands is influenced by the rate of scrap metal recycling versus the amount of virgin metal production. When there is high demand for metal and short supply (scarcity of production and availability) salvage metal prices climb in value as an economical and environmentally friendly solution.

 

What global factors influence metal recycling prices?

 

Natural disasters 

 

Hurricanes and earthquakes can affect the market in multiple ways. The devastation following Hurricane Katrina, demolished buildings, damaged infrastructure and destroyed vehicles caused a sudden increase in the supply of scrap metal. Although supply increased, the price of scrap metal remained high as demand also increased. Construction sought to source, repurpose and use as much scrap material as possible to hasten the rebuilding of New Orleans. 

What about a decrease in demand? Metal recycling prices dropped as demand lowered during the COVID-19 Pandemic. Lockdowns and the reduction of industrial activity stalled the scrap metal industry. However, the subsequent recovery phase saw a surge in prices as industries ramped up production.

 

Political unrest 

 

Chile is the the top copper producer in the World with 24 per cent of global copper production. The country has a decades-long history of Copper mining strikes. As mining companies negotiate with striking workers production of copper decreases and in some instances stops completely. 

A strike in a copper mine in Chile directly influences market prices, short supply of virgin copper equals higher demand for scrap copper to meet global manufacturing needs. 

This example of political unrest has a ripple effect on virgin metal market prices, scrap metal on the other hand presents itself as less volatile offering a more steady supply to meet demand.

 

Foreign Policy

 

Australia is keen to go green, by lowering our emissions and achieving Net Zero to meet these targets companies are pivoting to a future that utilises scrap metal. The Net Zero Plan will guide Australia’s transition to the target of net zero greenhouse gas emissions by 2050. We are proud to be part of a global effort to combat climate change.

Global policies that focus on conserving natural resources look towards greener industries that recycle waste products like metal. Scrap metal is an expanding industry with major growth on the horizon. A move away from pillaging natural resources toward reusing, recycling, and renewing raw materials will continue to positively influence the prices for scrap metal.

 

What local factors influence scrap metal prices?

 

Domestic policy 

 

Domestic policy is one factor that increases demand and in turn sell value for those looking to get rid of their unwanted scrap. 

Victoria’s Big Build, major works to improve road and rail travel, is increasing demand for local scrap metal. Under the state’s Recycled First Policy recycled and reused materials are considered over virgin materials and will divert valuable materials from land fill. The Metro Tunnel, Regional Rail works and the Suburban Railway Loop (Melbourne Airport Rail) are only a few of the huge upgrades to infrastructure that fall under this scheme. 

As part of Victoria’s circular economy strategy. Recycling Victoria outlines a 10-year plan to grow domestic recycling capabilities and innovation. This includes scrap metal. 

 

How much more does virgin metal cost to produce compared to recycled scrap metal?

 

In general, scrap metal is often cheaper than virgin metal to produce. The cost of production for virgin metal often outweighs the benefit both financially and environmentally making your scrap metal worth more.

 

The Pro’s, the Con’s and the price of virgin metal vs scrap metal

 

Pro: Recycling scrap metal typically requires less energy and fewer processes compared to mining and refining virgin metal. The collection, sorting, and processing of scrap metal are generally less costly. 

Con: Virgin metal extraction from ore is an intensive process involving mining, transportation, refining, and smelting. These processes are energy-intensive and expensive. 

Pro: Recycling scrap metal is more environmentally friendly, reducing the carbon footprint and leading to lower production costs. 

Con: Virgin Metal Mining operations have significant environmental impacts, including land degradation, water pollution, and greenhouse gas emissions.

 

The price: virgin metal vs scrap metal

 

Examples are approximate and subject to market fluctuations. Steel is one of the most widely used scrap metals and copper is one of the most desirable and valuable scrap metals. 

Below is the price of recent market trends for Steel and Copper

Steel:

• Virgin Steel: The price of virgin steel can range from $600 to $800 per ton.
• Scrap Steel: The price of scrap steel can range from $200 to $400 per ton.

Copper:

• Virgin Copper: The price of virgin copper can range from $8,000 to $10,000 per ton.
• Scrap Copper: The price of scrap copper can range from $4,000 to $6,000 per ton.

In both comparisons, scrap metal is more cost-effective for businesses to buy. The pros associated with lower production costs of recycling scrap metal in comparison to virgin metal mining support an upward trend for scrap metal recycling prices. Good news if you are looking to sell scrap metal.

 

Current Scrap Metal Prices Chart

 

Got some scrap lying around? Calculate how much you’ll get for your scrap metal with our Scrap Metal Price Calculator* 

* These prices are for drop-off only. Due to market fluctuations, our Scrap Metal Price Calculator is provided as a guide only. Please contact us so we can give accurate prices for your scrap metal based on the type and quantity of your commodity.

Stakeholders in the scrap metal industry can better navigate fluctuations and market dynamics by understanding that prices for scrap metal are influenced by supply, demand, world events, global policies, domestic policies and production costs.

 

Is now a good time for scrap metal prices?

Now is a great time to sell with these factors leaning in your favour. We offer premium prices for scrap metal to supply local, national and global demand. That means more money in your pocket. Win-win, profit from your unwanted metal and help to build a greener future.