Those in the demolition and recycling industry understand that the scrap market is volatile. Scrap prices have been down across the ferrous and nonferrous spectrum, but recent drops in ferrous scrap prices in particular are giving people who rely on margins from scrap sales, including demolition contractors, reason to worry.
Construction & Demolition Recycling (C&DR) is a sister publication of Recycling Today, a publication that has had its pulse on the scrap metals recycling industry for more than 50 years. Because of that long history of covering metals markets, C&DR can garner deep insights into the factors contributing to the market slump. This current downturn appears to be a result of a confluence of situations from the strong U.S. dollar to lower oil prices affecting demand for U.S. scrap, both domestically and overseas. Ferrous scrap prices have stayed practically unmoved from February to April, and it is unclear how long this scenario is going to last.
In the article “Mixed messages,” in the May 2015 issue of Recycling Today, Michael Casbon, technical director for Carmel, Indiana-based sustainability consultancy firm ERM discussed how scrap prices were affecting the demolition industry. “When the scrap price drops 50 percent, like we have seen, and if you started that job and took it for zero dollars, it puts a lot of pressure on the contractor,” Casbon said in the article.
Many in the demolition industry agree if scrap prices stay low, it will take some of the less qualified competition out of the game. “They will go back to what they were doing before and the bigger demolition companies will start doing more of the demolition again,” Casbon predicted.
The Recycling Today Media Group understands the importance of sharing commodities pricing and supply and demand information with our readers. Every issue of C&DR features pricing trends for some of the most traded commodities within the C&D recycling industry. You can find them in the By the Numbers department, located on the last page of the magazine. As well in 2015, we have introduced a series of metals recycling articles to provide insight into specific metals markets. The series featured copper in the March/April issue and will feature ferrous in July/August and stainless steel in November/December. I hope these articles will help you understand these markets better.
As well, Recycling Today posts Management Science Associates (MSA) Raw Material Data Aggregation Service (RMDAS) ferrous prices, which are updated around the 20th of each month, on its website (www.RecyclingToday.com/RMDAS/Default.aspx).
The best way to get through this dip in the market is to stay informed and the Recycling Today Media Group is a resource that is here to help.