If you’ve scrapped metal over time, you’ve probably recognized that prices aren’t steady, but rather tend to fluctuate – sometimes dramatically. Have you ever wondered what’s behind the dance?

While the prices of scrap metal can change day to day, the dance they do isn’t random. There are some interesting factors at play that determine the rise and fall. While it can be difficult to pinpoint and predict every variable, there are some clear and identifiable reasons for why scrap metal prices are what they are any given day.

Why Do Scrap Metal Prices Fluctuate?

In short, prices fluctuate because they’re dependent on a variety of factors that also fluctuate. These are driven by the laws of supply and demand.

small wooden seesaw with some using their finger to balance it on one side and coins on the otherImagine a seesaw with supply on one side and demand on the other. When the supply is lower, demand may become higher, causing prices to rise. Similarly, if there is an excess of supply, prices will lower. And just to make it more complicated, supply and demand itself is influenced by other factors, as well.

Scrap metal is used in numerous industries, such as transportation, construction, technology, and other manufacturing. Begin to imagine all the products in which scrap metal is found – automobiles and aircraft, rebar in buildings and bridges, appliance parts, furniture, pots and pans, cellphones, sculptures, and much more. When the industries that use scrap metal are booming, the demand for more scrap metal for their projects grows – and prices go up. When economic growth in these industries slows, the inverse is true: demand decreases, and so do scrap metal prices.

Because it’s used in particular industries, scrap metal prices can be influenced by seasons as well. For example, the construction industry tends to be busier and need more materials in warmer times of year, potentially driving the price of scrap higher during construction season.

So, What Affects Demand?

Some changes in demand are driven more by trends than seasons. For example, technological advances. Have you ever noticed that some of your gadgets seem to become outdated in a week? When new inventions or updated technology come into play, these might require specific metals, increasing their prices. The opposite also has an effect – some innovations can make certain products of components obsolete, decreasing the demand for the metals they contain.

♻️ Global Factors

On a large scale, scrap metal prices can be influenced by some of the biggest players in the global economy. When big economies like the United States, China, Japan, Germany, and the UK are doing well, they’re likely to have a strong demand for scrap metal and prices can follow suit. This is particularly true of industrial nations that import a lot of metal, and can affect local prices.

To add a new layer of drama, we can introduce geopolitics. When countries get into trade disputes or introduce tariffs, this can also disrupt the scrap metal market, slowing the flow of scrap metal between some countries. These barriers can lead to shortages or excess supply, which then affects prices.

Another factor? Currency exchange rates. A weaker currency can make a country’s scrap metal exports look more attractive, affecting the dynamics of supply and demand.

♻️ Local Factors

a view from the bottom up of a crane coming down to grab a pile of scrap metalThings that happen closer to home can influence prices, as well. A local scrap yard’s intake of scrap can determine prices, and so can local demand.

Transportation costs and location matter too. Scrap yards collect, sort, and prepare scrap metal, and this takes energy and fuel. If costs related to these processes rise, so do the scrap yard’s costs. Any changes in scrap yards’ costs can make a difference in scrap metal prices. And if a scrap yard is near a city or a port, this can mean lower costs of transportation and allow the scrap yard to pay more for scrap metal.

♻️ Mining & Recycling

One industry that impacts scrap metal prices is mining, because it also supplies metal. Usually, it takes significantly less energy and expense to use recycled metal rather than raw ores. If newly-mined metal becomes more or less rare – or more or less costly to extract – this will affect the value of scrap metal.

Changes in environmental regulations and eco-consciousness also impacts the demand for recycled materials of all kinds. Stricter regulations will lead to greater recycling efforts, which can increase both the supply for scrap metal and the demand for it!

What Metal Usually Brings in the Most Money?

While prices fluctuate, some metals tend to consistently bring in more money. Precious metals like gold, silver, and platinum are valuable due to their role in applications such as jewelry, electronics, and other industries. However, people don’t tend to dispose of these, and they’re less abundant than other metals.

Copper is more readily available and has a wide range of uses, so it tends to be well worth collecting for scrap. With exceptional conductivity and rust resistance, it continues to be versatile, with value for wiring, plumbing and other uses. And as industry grows, copper continues to be in high demand, meaning it tends to give scrappers a good return.

Stainless steel and aluminum are fairly common, so they may not fetch as much money per pound as some other metals. However, these can also often be found in large volumes and demand remains steady, so it can still be quite profitable to collect.

Need More Info? We’re Here to Help

It can be tricky to keep track of prices and demands of various metals, but scrapping is well worth doing. It can be profitable for you, beneficial for the community, and good for the environment. And we’ll walk you through it! We’re passionate not only about the how, but also about the why of scrap metal recycling.

Give us a call or request a quote today.