Scrap metal pricing can be mystifying to many scrappers, especially those new to the industry. The truth is rather complicated, but less difficult to grasp than you might think. Knowing a bit more about how scrap prices work can help you get the most for your scrap!
Supply and Demand
The biggest factors affecting scrap metal prices are supply and demand. When more businesses need recycled metal, demand goes up, which drives prices up. When there is more scrap metal on the market than is needed, the supply is too high for prices to rise.
The best time to sell scrap metal is when there is a high demand for it and a low supply generally on the market. If you check scrap metal spot prices regularly, you can see trends, and notice when the market for certain metals goes up or down.
Of course, the thing that makes this difficult is that the supply and demand of one metal fluctuate without much influence from the supply and demand of other metals. The price of copper and the price of stainless steel aren’t necessarily closely related to one another.
The price of scrap metals varies based on what part of the country or the world you’re in, as well. This is because supply and demand not only happen on a global scale, but at the local level. If you live twenty miles from a huge storehouse of copper, the supply of copper is always going to be higher, driving prices down.
However, the differences in price based on region usually aren’t enough to justify traveling very far for scrapping, unless you have tons and tons of scrap and a way to move it all cheaply. Generally, recycling in your own area works best, but it never hurts to check a variety of prices.
The Human Factor
Of course, you don’t have time to measure every uptick or downturn in supply and demand in every market for every metal the world over. A better way to optimize your scrapping enterprise is to build good relationships with people in the industry, starting with your local scrapyard.
Scrap yard employees and owners can be some of the best sources for information about scrap prices not only at their own shops, but on a larger scale as well. Starting conversations can take you a long way in the world of scrap.
In addition, scrap yards often reward loyalty with special offers. For example, here at Encore, we often raffle off a large-screen TV once a month; all you have to do to enter the contest is recycle some scrap metal.
On top of that, calling ahead to check current prices can get you the most up to the minute information about the going rate for a particular metal at a given yard.
Once you’ve found an honest scrap yard to deal with, getting the best price is easy. Between checking in with the yard and watching spot prices, you can easily find the best time to sell each of your metals. Of course, cleaning and separating your metals makes this part of the process easier—and means you’ll get paid a little more no matter where prices are. Win-win!