Getting more and more confused on metal prices

Price of oil (and subsequently price of fuel) is down, factor 1 to help knock down the price of shred. China's economy is tanking, they are not importing nearly as much scrap metal, factor 2 to help knock down the price of shred. Our own economy is slow, plus the world economy has slowed down, demand for scrap has slowed, factor 3 to help knock down the price of shred. I went in to take a flatbed of shred hoping to get the $70 a ton it was at a couple of weeks ago. Go in to get paid and find it has gone up to $85 a ton. Mind you, I am definitely not complaining, just trying to figure out why with fuel so low and demand down why in the period of 6 weeks shred has gone from $40 a ton to $85 a ton. Any back chair economists out there with any ideas.



HT1 - since you are very knowledgeable about the business side of a scrap yard, do you have any idea what some of the forces are that are affecting the rise in prices with the drop in demand?

stop looking Macro economics and look Micro economics this is not the only answer, but a very likely one the yard you went to has an order to finish, and they are buying scrap at break even. this is often the case when you see a sudden 20% increase_{shred feed is often at a 20% margin} watch for the bottom to drop right back out before the 1st of Feb.

Additionally some of the mills that idled from the holidays may be back on line and running short on material. there is a similar issue with shredders, a small shredder has a skilled 4 man crew, you have to feed the beast or have those guys sitting on their thumbs. you lay them off or cut hours they may not be available when it is time to ramp back up... this issue all across the scrap yard is why it will take as long for the prices to rise as it did for them to go down. yards(and the industry as a whole) will have to increase the capability back to what it was.

now you want to worry about China remember the Chinese new years starts FEB 8 lasts a week after that the china market may... MAY start to move. which way I refuse to predict.

Now as to your shred issue, if you produce, say 5 tons a week, you should really try to talk to a buyer from the yard of your choice, and let him know what you got, and see where he can get you... Volume matters in all yards, if they have a hot order to fill they will call people that might have what they need...
Hoarders you should be doing this also, but I warn you exaggerate at your own risk. you tell someone you have a ton of copper and cannot produce it, you have burnt a bridge and it will not be forgotten

V/r HT1

Very good advice on the volume. I am one of the hoarders, and am currently sitting on 1000 lbs of copper(conservative approximation, all separated into #1 and #2), so I will let my yard know I could be a contact if they could give me a good price. Also have a couple hundred lbs of clean brass, but that may be too small for their needs, but would not hurt to let them know about that.