Line graph showcasing the rise and fall of scrap metal rates

Factors That Affect Scrap Metal Rates

The scrap metal industry can be highly lucrative, but volatile. Much like the stock market, scrap metal rates can change significantly at a moment’s notice. Whether you’re someone who collects and sells scrap metal as a hobby, or a business owner whose company’s operations involve purchasing processed scrap metal, it’s important to understand what causes the going rate for scrap metal per pound to fluctuate.

Sgt. Scrap is the premier scrap metal dealer serving customers in New Jersey, as well as Delaware, southeast Pennsylvania, and parts of New York. Here, we offer a closer examination of the factors that determine current rates for metals we buy.

Supply and Demand

Just about every economic concern is impacted by supply and demand. The scrap metal industry is no different. The demand for metal in various sectors such as industrial, construction, and technology affects costs. For example, a metal that’s high in demand but low in supply will garner a much higher price at a scrap yard. Conversely, a metal that’s in low demand and high supply won’t be worth as much. Seasoned scrappers often wait until their metal is in high demand to receive the best price possible.

The Time of Year

The time of year will impact supply and demand for metals, and therefore impact pricing. Demand for scrap metal is typically much higher in warmer months and lower in colder months. That’s mostly because the construction industry is in full force during the summer, tending to slow down once winter comes. Once construction ramps up in the warmer months, you can expect to see a surge in scrap metal rates to account for the new demand.

Energy and Production Costs

Energy and production costs, such as oil, gas, and other electricity sources, will largely affect scrap metal prices. High processing costs as a result of a surge in fuel prices can lead to a change in scrap metal prices. To make up for the difference in production costs, the current rate for scrap metal may be lowered.

The Price of Virgin Metals

The current price of virgin metals will impact the going rates of scrap metals. Virgin metal means newly mined metals that have not been processed, recycled, or used. When prices for virgin metal increase, so too does the price for scrap metal. This is because companies will opt for recycled metal instead of new metal to reduce costs, making scrap metal more valuable. Alternately, scrap metal becomes less valuable when virgin metal prices dip.

International Trade

Believe it or not, the scrap metal prices you receive at your local scrap yard are impacted by international trade. If the demand for scrap metal fluctuates in other countries that are prominent importers of scrap metal like India and China, scrap metal prices here will change. An increase in demand for scrap metal around the world results in higher rates for scrappers.

The Quality of Scrap Metal

The condition of your scrap metal greatly impacts how much it’s worth. Scrap metal that’s covered in insulation, corrosion, or residue, or metal that is mixed with other metals, is significantly less valuable. The reason for this is the time and effort that’s required to clean and organize the metal before it can be processed and recycled. Taking the time to remove any residue or insulation from your collected scrap before taking it to a scrap yard can earn you higher prices.

Receive Competitive Scrap Metal Rates From Sgt. Scrap

In a constant effort to be the best scrap dealer, Sgt. Scrap is pleased to offer the most competitive and fairest prices for your scrap metal. Serving people throughout New Jersey, Delaware, and parts of Pennsylvania and New York, customers will receive top dollar for their collected scrap at our Haddon Township and Pennsauken Township locations. The metals we buy are sorted, inspected, and accessed on-site so you can get paid faster. If you have at least 500 pounds of non-ferrous scrap metal, we can do a mobile pickup. If you have more than 5,000 pounds (which can include steel), we offer rolloff dumpsters that we can drop off and pick up.

To hear our current scrap metal rates or to learn more about what causes them to fluctuate, contact us today at Sgt. Scrap.

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