How scrap metal value is determined

If you're a metal trader or dealer looking for the right price for your scrap metal, you'll be interested in knowing when the right time is to get the most value for your scrap materials. With the commodities market and the stock market fluctuating by the minute, it's understandable that you might be unsure of how it all works.

In this article, we'll analyze the key factors that determine scrap prices, helping you understand the industry a little better and appreciate how these factors can influence each other.

THE RELATIONSHIP BETWEEN GLOBAL METAL MARKETS

It's important to note that it's not just the domestic scrap market that influences scrap prices. The international market also plays a key role here. As Spain is one of the five largest scrap exporters on the planet, it's no surprise that the prices charged for scrap worldwide influence the value of scrap at your local scrapyard.

As scrap dealers, we therefore track the markets and monitor updated rates, which in turn allows us to keep up with the latest trends and offer you the best price for your metals.

SUPPLY AND DEMAND

As with so many commodities and products, the concept of supply and demand also weighs heavily on the value of scrap. Interestingly, the pace of the construction industry can play a significant role. When industry is slow, the demand for scrap will decrease, affecting the value of the materials. At the other end of the spectrum, when things recover, scrap metal becomes a more precious commodity.

LOCATION

The location of a scrap yard can also play a role in the prices of the scrap offered. Yards that are located near larger ports and cities capable of transporting scrap overseas will have lower overhead costs than a more rural inland yard. But similarly, if a scrap yard is located in a rural area where scrap is harder to come by, the yard may be more willing to pay a premium to take it off your hands.

MATERIAL QUANTITIES

If you're looking to sell your scrap metal, you'll likely have greater leverage in terms of value if you have large quantities available. In general, scrap dealers will be more willing to buy your scrap if they can acquire it in bulk, lowering the overall cost per kilogram. If you're willing to hold onto your scrap until you have a larger quantity, you may get a better price.

FERROUS vs. NON-FERROUS METALS

The most valuable scrap metals to recycle are non-ferrous. Common non-ferrous metals include aluminum, copper, brass, and lead. The easiest way to determine if your scrap metal is non-ferrous or ferrous is to test whether the metal sticks to a magnet. If it does, it's ferrous. Ferrous metals tend to be less sought after by metal recyclers, but they will still recover some value if they have large enough quantities of them.