Factors that Affect Scrap Metal Prices

January 15, 2019  

Whether you’re a business owner that purchases scrap metal post-processing, or an individual or a business owner that sells your scrap metal for processing, understanding how scrap metal prices are set is important. Consider these primary factors that affect scrap metal prices in the United States, and feel free to reach out to one of our scrap yards or scrap mills for more questions about the current prices that we are offering to buy scrap metal–

Energy and Production Costs

Clearly, the costs of energy (and production) can have a large effect on the price of scrap metal. Energy costs include the costs of gas, oil, and other sources of electricity. When costs of processing are especially high, the price that is offered for scrap metal may drop in order to make up for the difference. That being said, if the costs associated with new metal mining are particularly high, this can make scrap metal and scrap recycling a more valuable endeavor.

Supply and Demand

One of the most basic economic theories that drives the price of scrap metal is that of supply and demand. This theory holds that the greater the supply of a product, the lower the price; the greater the demand, especially when supply is limited, the higher the price. When scrap metal is in low demand and high supply, scrap metal prices will be lower.

Price of New, Virgin Metals

Another element that can affect the price of scrap metal is the price of virgin metals – those that are newly mined and have not ever been used, recycled, or processed. When virgin metals are more expensive (which can be driven by energy and production costs and supply and demand), scrap metal becomes more valuable as an alternative to virgin products. On the other hand, when virgin metal prices drop, scrap metal becomes less essential, as industries can afford virgin metals instead.

Contact Scrap Metal Services, LLC for Fair Scrap Metal Pricing

At Scrap Metal Services, LLC, we always pay top dollar and fair market value for our customers’ scrap metal and are transparent in how our prices for scrap are determined. To learn more about our scrap pricing, what we buy and what we do not buy, and our locations throughout the United States, please reach out to us today.

We are a leader in the scrap recycling industry with a reputation of excellence, sustainable practices, and worker safety. Please call us today at 708-730-1400 or send us a message directly.