The scrap metal market is proving to be highly volatile at present. We feel it is our duty as leaders in vehicle recycling to provide an explanation as to how this volatility affects the value of your scrap vehicle.
Scrap metal prices have slowly been moving down in 2014 but as we move closer to 2015 this movement downwards is becoming more volatile. This downward affect means that you’ll be receiving less when selling your vehicle now versus the same period last year. Global markets are responsive to demand. When demand is high and supply is low the price that can be paid for scrap vehicles goes up. The same occurs when demand doesn’t change but supply goes down. When demand is low and supply is high the prices that can be paid for scrap drops. The same happens when demand doesn’t change and supply increases.
We are currently experiencing a heavy reduction in demand from global industry that is looking to use scrap metal. Supply of scrap metal has remained steady therefore using the explanation above we can see that prices drop as a result.
Global markets such as scrap metals and oil are often closely linked and benchmark figures are produced using the behaviour of one another. If a trend occurs in one market it is likely to be replicated in another. Oil is a perfect example of this. Recently we have seen the price paid for fuel drop as a direct result of supply increasing in excess of demand. Remember, when supply exceeds demand prices drop as a result.
Metal prices are also linked to stock market movements. Many of the commodities such as ferrous metals i.e. the body shell & non ferrous metals i.e. aluminium components are traded on the stock market daily. Stock market values fluctuate up or down meaning that prices can change frequently. Having daily insights to all of the above it is our opinion the likelihood that the price for scrap metal increasing in the next 12 months unlikely and more likely to continue to decline until world demand picks up.
To ensure we pay a fair price for scrap vehicles to all customers we fix our metal prices monthly in advance to protect against volatility in the market during that month, This not only encourages fairness in our service but also ensures that we pay the best prices for scrap vehicles at the time of quotation.
If you have a scrap vehicle that you are looking to sell our advice is to sell it now to protect yourself against almost guaranteed falling costs moving into the new year. Click here to get an instant quote for your vehicle now.