Q:

What factors cause fluctuations in scrap metal prices?

A:

Quick Answer

The price of scrap metal fluctuates correspondingly to the price of virgin metal. When the price of virgin metal increases, the price of scrap metal also increases. Other factors, such as the cost of fuel, politics, importation costs, and supply and demand, also play into the equation.

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What factors cause fluctuations in scrap metal prices?
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Full Answer

A very high amount of heat is required to melt scrap metal down and recycle it into another usable product. Electricity, natural gas and coal are the kinds of fuel usually needed to sustain the high amounts of heat needed. Therefore, when the cost of fuel increases, the price of scrap metal also goes rises.

Additionally, the rule of supply and demand also determines the price of scrap metal. When demand for scrap is high but the supply is low, the price of scrap metal rises. Conversely, when demand is low and the supply is high, the price falls.

Politics also play a part in prices, as foreign policies affect taxes, shipping and importation costs. Trade agreements, as an aspect of politics, often cause the prices of scrap metal to fluctuate.

Other factors that also influence the price of scrap metal are the time of the year and the international trading of scrap metals.

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