What Factors Impact Scrap Metal Prices in Australia?

Whether you own a business that purchases recycled scrap metal after processing, or an individual or a business owner that sells the scrap metal for further recycling processing, having a knowledge of how scrap metal prices are set is vital.

Recently, the scrap metal business has been experiencing low rates. It will not be surprising if scrap metal prices vary in future, and this can be a source of frustration for people looking to recycle scrap metal. The rate per weight of scrap metal is influenced by different variables, with some rising the price while others drag it down at the same time. The assessment of all these factors for finding out their effects on the price of scrap is difficult, but taking an overview of these effects can help you better understand why these prices vary and when is the best time to sell your scrap metal.


Therefore, consider these main factors that impact scrap metal prices, and you can reach out to the nearby scrap yards or scrap dealers to ask more questions about the current prices they are offering for different types of scrap metal.

Energy and Production Costs

Undoubtedly, the costs of energy used in production will have a large impact on the price of scrap metal. The cost of energy includes the costs of oil, gas, and other sources of electricity. While costs of processing are particularly high, the price offered for scrap metal may fall to make up a difference. Keeping in mind the costs related to new metal mining, which are mainly high, this can make scrap metal recycling a more important process.

Metal Supply and Demand

The scrap metal industry works on the monetary laws of supply and demand. If the demand is more, then prices will also rise. For example, the requirement for copper rises during a housing boom, thus increasing its price. If the demand for the metal is not much, prices will also be lesser. There may also be chances when industry suffers a housing bust or a recession.

The availability of metal also affects scrap prices. Some metals exist commonly than other ones, which means there is more supply of them in the market. Such metals are easy to find, so their prices are less. For example, aluminium is available in abundance, so the cost of aluminium scrap is much lesser than the cost of more uncommon metals like gold or copper.

If the supply is low, prices are high because the metal is harder to discover. The perfect time to sell your scrap is when the supply of metal is less or the demand is high because the prices will be highest at that time.

The Price of Virgin Metals

The value of scrap metal is closely related to the rate of the virgin metal. The price of a specific scrap metal rises when virgin metal prices increase because manufacturers prefer using scrap metal instead due to fewer production costs. This enlarged need for scrap metal causes its price to rise, following the law of demand stated above. The scrap metal market follows the same trend as well as the virgin metal industry because it is a replacement product.

Individuals who are looking to sell scrap metal will have profit because scrap metal recyclers will pay them more for their scrap when there is a greater demand for it. If you need to sell your scrap metal when rates are high, take a view of the trends related to the virgin metals markets.

Importation Costs

Scrap metal recycling is one of the major businesses in many countries. Some companies import metals from other countries, and the costs of importing metal greatly impact scrap metal prices in the. When importation costs are more, manufacturers may look for domestic sources of metal. It can cause the price of scrap metal to enlarge because the domestic demand is more. On the other side, if importation costs are modest, scrap prices may also reduce.

Metal taxes also affect scrap metal prices because it can cause importation costs to enlarge or discourage other countries from shipping metal. The financial status of foreign countries also impacts importation costs and the need for scrap metal.

Fuel Prices

Fuel prices have the utmost effect on scrap metal prices. When the price of fuel rises up, so does the rate of scrap. This is why the process of recycling metal depends on the consumption of fuel. Fuel is used in the heating of metal to melt it down and to produce different products. The high heat required to heat metals can be generated from coal, natural gas, or electricity. So whenever there is an increase in the costs of any of these, the cost of metal will also increase.

Gas prices also impact the cost of transporting scrap metal and related products. The higher the transportation charges, the higher will be the cost of metal and vice versa. When fuel prices are less, the scrap metal prices will also low. When you are trying to sell scrap metal, check out for fuel prices to know when is the best time to sell.

Contact Metal Merchants for Fair Scrap Metal Pricing

At Metal Merchants, we always pay top prices and the fair market rate for the scrap metal of our customers and transparently tell you how our prices for scrap are determined. To know more about our scrap metal prices, what metals we buy, and in which locations we serve in Australia, fill out the form online on the website. 


Comments