HOW LOW CAN YOU GO?
We felt the sting in February 2017 with a scrap metal price drop. In October, scrap prices dropped yet again. China’s improved plants and abundant labour force presents itself as very strong competitor in the global market.
The U.S has already made headway as they are changing the import tax structure to encourage companies to buy U.S. steel and as always the tag-a-long local scrap metal. With higher duty on imports, buying local steel will become more attractive. The anti-dumping laws slip away as countries like China takes advantage of loopholes to bypass such scrutinies. China is known for their cheap labour. A fact of life. Govt loans and new, modern scrap metal processing plants in China are bolstering their economy.
Carbon steel output for the automobile industry (in China) reaches 800,000 tons in the first six months of this year as domestic demand soars, particularly for new energy vehicles or NEV’s published by chinadaily.com
There is no stopping China’s steel manufacturing and scrap metal processing.
India is a big buyer of scrap metal. They are also becoming independent in the scrap metal industry. The Indian government try to reduce the purchase of China’s cheaper scrap metal and are encouraging Indians to buy the higher priced local scrap metal to boost their own economy.
CHANCE OF A QUICK TURNAROUND
Scrap metal prices have reached a pretty low ebb. Lower scrap metal prices started to come to the forefront in 2015 and continuing to keep a low profile up to February 2017. From this point, we will begin to slowly improve over the months ahead. In March and April, scrap metal prices went up a smidgen by about $5-$10 a ton. Local prices may vary. It depends on your own local area. Prices are not consistent across the board.
This past October was a disappointment. Another drop of $10-$30/ton. We fell backwards. Recovery takes about 12-18 months to see meaningful changes. There is no formula except to look at growth or decline in various countries. China is a great force. They have the man power. The lack of unions and good allocation of resources is a benefit. Their growth has been 400% in some months. Countries are trying to maintain an even playing field in the global market. It is hard when China has most of the cards. If it takes roughly 14 months for prices to fall, it stand to reason that it might take 14 months to recover. It is always good to remember that each supplier (of scrap metal) has a selling point. When their yards fill up, they need to sell to stay in business no matter what price is set for that day.
PAUL’S SCRAP CAR REMOVAL
PAUL’S Scrap Car-Removal and Disposal has been providing quality service since 1992. Call us now at (416) 822-3253 to solve any of your scrap car disposal needs.
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