Scrap metals industry shows cautious optimism
The pulse may be faint, but there are signs of life in the scrap metal business. Opinions on the state of the market and future prospects are mixed, however, ranging from pessimistic to mildly optimistic. Even so, most all the metal recyclers interviewed are operating with a tight rein on operating costs and holding their breath.
Dramatic slowdowns by United States scrap generators in heavy industry, manufacturing, especially automotive, aerospace, machinery and their suppliers, and in construction have led to tightening supplies of scrap metals. Scrap metal dealers, brokers and processors are finding it harder to acquire scrap and traveling farther away to secure it.
Severe winter storms across many parts of the country compounded shortages. Some believe that scrap metal commodity prices have bottomed out and are slowly beginning to recover.
Looming over everything are the yet unknown ramifications of the Buy American provision included in the recently passed $787 billion American Recovery & Reinvestment Act. No one seems to understand exactly how the legislation will be implemented or how it will affect scrap steel exports.
A firestorm of protest from many countries and several leading United States manufacturers has caused Washington to moderate its position. It seems likely that federal contractors will be politically motivated to use domestically produced steel on infrastructure projects while our government walks a tightrope to meet World Trade Organization fair trade codes and trade treaties with foreign governments. ...read more
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Recovering precious metals from electronic scrap and catalytic converters from autos has become more profitable than ever before. That may explain why more and more specialized “niche” recyclers and refiners have sprung up and the sector has really surged over the past several years. Gold, which traded at an average annual price of $264 per ounce in 2000, has been trading near $1,000 per ounce in recent days. Of course, prices fluctuate, but they have been trending steadily upward for gold, silver and the platinum group metals: ruthenium, rhodium, palladium, osmium, iridium and platinum. The obvious reason for the sharp price increases is the economic crisis; for the feeling of security in uncertain times and as a hedge against inflation. Precious metals do not even have to be converted to cash – they are tradable as investment or industrial commodities – gold, silver, platinum, and palladium have an ISO 4217 currency code. ...read more