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November 3, 2008

Scrap metal prices plummet from $10 to $1 per 100 pounds

By Cristin Ross

cross@jacksonvilleprogress.com

The falling stock market is taking more then retirement funds with it.

Since the economy started its downslide, the price of scrap metal has also begun slipping, and that’s got both local scrap yards and area scrap haulers feeling the pinch.

“It’s pretty awful right now,” said Courtney Whitehead, an owner of Jacksonville Iron and Metal scrap yard. “We just don’t have anything coming in. It’s all very much up in the air.”

Whitehead’s yard had been paying $10 per 100 pounds of scrap just a few weeks ago. Now it’s down to paying $1 per 100 pounds.

“It had never been that high before,” Whitehead said.

Jerry Parker, a Rusk mechanic who hauls scrap metal from what accumulates at his shop, said it’s not worth it at today’s prices.

“You don’t even cover what you burn in gas just to take it out there,” Parker said. “And I’m in a bind because I’ve got a load ready, with no where to take it.”

According to an article from the Hamilton (Ontario, Canada) Spectator’s Thursday edition, scrap dealers around the world are facing the same situation — loads of scrap metal bought before the economic crash is now worth a fraction of what they paid.

Industry officials report scrap prices have fallen from around $230 a ton to about $177 a ton in the last few months. The decrease, coming after two years of prices so high they sparked a rash of thefts locally and nationwide, comes as the largest buyers of scrap — steel makers — have shut down or cut production as demand for their products dwindle.

“I’m not worried too much, since I’m more into salvaging and selling auto parts than selling scrap,” said Glen Smith, owner of Smith Auto Salvage in Jacksonville. “It’s a nice little bit of extra when we do get the crusher in here and get rid of what’s ready to go, but it’s just like the stock market; it’s up, it’s down — you just can’t depend on it as a constant.”

And it doesn’t look like the market will make another jump in the near future, according to the Web site, Steelguru.com.

The Web site, which is operated by a team consisting of several steel industry insiders and IT professionals, forecasts that because demand remains weak, scrap prices will keep on dropping, possibly as low as $150 per ton if demand is further lowered.

“However, it is being said that there is still room to bargain with suppliers for the time being,” the site states.

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