Car junkers (including Junk Car Medics) didn’t suddenly start taking advantage of you. We’re facing a big problem: the price of scrap metal has plummeted in the last two years. The cars that auto junkyards buy that have reached the end of their life are stripped of all materials and fluids and crushed, with the remains sold to a local shredder. We (and other junk car buyers) can’t get nearly what we could previously. And it’s a lot of work to tow a car, strip it and crush it believe it or not. Therefore the price we are able to offer to buy cars has reduced greatly.
But why are scrap metal prices suddenly so low even when compared to last years scrap car prices? How does that affect the junk car industry? And what can you do to ensure you get the highest value possible for your junk car? We have the answers.
HOW DO SCRAP PRICES AFFECT THE VALUE OF MY JUNK CAR?
According to an article on ETF.com, the average car contains 2,400 pounds of steel. The average truck contains 3,000 pounds. That accounts for about 55 percent of the car’s total weight. There’s also approximately 300 pounds of aluminum in the average vehicle.
When a car junker purchases your vehicle, what they’re really buying is the value of that scrap metal by the ton. Steel, aluminum, copper and other metals can be sold for cash to scrap metal dealers. Those scrap metal dealers, in turn, sell the metal to manufacturers who recycle the metal and turn it into new cars, building materials, wire, smartphones and other items we use every day.
The price for scrap metal varies based on demand. If car manufacturers aren’t making many cars, the price of steel and aluminum drops. If builders aren’t constructing new homes and apartment buildings, the price of metal also drops.
A BRIEF (RECENT) HISTORY OF THE INTERNATIONAL METAL MARKET
Metal is a commodity (a raw material for manufacturing or food products) that’s traded internationally. That means what’s happening in the world affects the prices. For years China’s economy was growing so rapidly it created high demand for steel, copper, aluminum and other metals. As its economy slowed from a sprint’s pace to a marathoner’s stride, demand for metals has also gone down, says an article on CNN Money.
However, that doesn’t mean China’s production of steel has slowed down. China has huge overcapacities in steelmaking, says Jan Pfeifer with InvestmentMine. “This steel has to go somewhere and now it is going into the world market, where it depresses prices.”
China produces both finished and semi-finished steel, says Nick Tolomeo with Platts, a leading global provider of energy and commodities information and benchmark price references. The semi-finished steel (also known as billet) has been used as a scrap substitute by steel mills in Turkey, the largest overseas buyer of U.S. scrap. Now that they’re opting for Chinese billet, U.S. scrap is left stranded on the east coast.
Pfeifer says the U.S. and EU have imposed huge import tariffs on steel to try and counter the influx of inexpensive materials from China. That’s helping, says Tolomeo, but it will still be a while before the entire U.S. steel supply chain sees sustained market improvement from these measures.
“Any time you’re trying to figure out what China is doing it’s a guessing game,” he says. “They have somewhere around 150 million metric tons of excess capacity. They seem to be getting more serious every day about rationalizing this capacity. But even if they’re serious about that and taking measures, it’s probably two to four years before the U.S. market sees a material impact.”
source : https://www.junkcarmedics.com/blog/scrap-car-prices-per-ton/
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