Steel Prices, not going up for 2-5 years?!?

I went to my yard where I recycle my steel and I ask them if prices have gone up any. The cashier told me that they had a conference and in the conference they said the prices for steel were going to stay around the same price for 2-5 years! Now that is quite some time to forecast ahead but, it seems to me that this company (this company has many yards in many states) is anticipating an economic slow down. I currently get $85/gross ton for #1 HMS. Looks like things look a little better in other parts of the USA but, here in CA. things arent too good for steel. I charge for all steel now so, any steel I get I just consider it gas money.

Everyone is trying to second guess the market. Some buy long and others sell short. This business model is based on economics and looks at cycles, 20 year cycles at this point. The grandkids will be pretty happy campers when I kick the bucket. Still stock piling and when the demand is there, they can cash out.

No one can foresee the future, but there will always be value in scrap. When the refineries are hungry, prices will improve. Until then we can either stock pile or sale. I am still holding out and wish others the best with their decision.

A prediction: Prices will fluctuate depending on your location. Refineries will increase prices when they are behind on a contract and drop them when they are long. Scrap yards will respond in the same way. Price fluctuations will be weekly, if not daily. It will be a wild ride and good luck to all.

I have no idea of the time frame but a slow economy seems likely for the foreseeable future.

It was sometime back in the early 2000's that the government started creating a lot of new money within the Federal reserve system. ( The Federal Reserve is like a go < ----> between. It's like a United States Government bank and it loans money to the big banks.

The big banks borrow the money and in turn loan it out to the public.

There was a $hitload of borrowing going on before the recession hit. That overheated the economy and caused price inflation. Finally .... it came to a point where everybody was in debt up to their eyeballs and the economy crashed over the winter of 2007-2008.

A bit later during the end of the GWB administration there was a banking crisis so The Fed nearly doubled the existing money supply to loan out enough for the "Big Bank Bailout". That really drove price & currency inflation. Metals prices went up up up.

Have you ever gone on a really good bender ? You're high that weekend but you're sick as a dog for the next week ?

It's like that with the economy too. We had the glory days of high metals prices and now it's the morning after. As some of that "created" money is returned back to The Fed and taken out of circulation it creates currency deflation.

During the deflationary phase of the recession prices drop and money becomes harder to come by.

Long post ... but IMHO it's not really all that complicated.

You know what they say ..... (debt) payback is a bit*h.

Originally Posted by Metalbestos

I don't think they know any better than the rest of us . Sounds like they want you to sell it so they can have the repeat business as opposed to you stock pilling and not seeing them for the next year . Gasoline is allready starting to climb , everything else should follow suit shortly after .

I'm not sure about other parts of the country but here in Maine it's a seasonal thing. My wife has been watching the price fluctuations for years and she maintains that the oil companies hike the prices in the spring/summer to squeeze more money out of the tourists. Hard to say .... it may be a penalty for all the pleasure driving that's being done this time of year or it might have something to do with how the supply chain works at the refineries.

For whatever reason ... price increases have been seasonal in the past. ( The future might be different. )

Originally Posted by olddude

I will put my head in the noose here. Look for a September or October surprise and my guess is it aint gonna be a good one. Use some of your down time to plant a garden and learn to can. Just sayin. mcw

Lol ... not lookin' to hang ya bro.

I was just wondering. Is it more of a feeling that something is about to go Southbound -or- is it more like an unexpected event like what happened in NYC on 9/11 ?

They call an event like 9/11 a "Black Swan".

There's usually some kind of rumbling before hand but most people overlook it because their attention is somewhere else. That's why it comes as a complete surprise.

I'm not really what you would call a prepper but we do live by the seasons. It's normal for us to stockpile enough supplies to carry us through the winter. By late Autumn the freezers & the pantry are full. We're loaded with fuel. It's quite a bit of work to put up enough to carry us for three or four months during the lean times.

It wouldn't be easy, but i think we might fare better than a lot of others if it all went sideways. We're on an island so we're geographically protected from unfriendly outsiders. Worse case ... we could cut our supply chain and provide enough food for ourselves. There's plenty enough seafood and our fishing fleet is among the most productive in the state.

< sigh > I hope it doesn't come to that ......

while the metal prices definitely suck, down about 60% of the past average, they shouldn't make or break you. Time to become more diverse whether that means selling used items on the secondary market or charging for your pickups to help cover that loss. Take this time to learn different ways to expand your business into more profitable directions.

As long as I'm getting $.05 a pound, I'm good. Of coarse I want the higher prices but I'm in the green at $.05 for shred. Currently my yard is paying $.06 a pound so it's all good. I have a ridiculous amount of copper, brass, and a/c coils stockpiled and will just continue to accumulate until a good time comes to sell. Iron and aluminum gets turned in as I get it.