Anyone involved in metal recycling is aware of fluctuations in its value. In this blog, we want to shed light on some factors that may affect the value of scrap metals.
Production and Energy costs
The cost of energy and production has a significant effect on the price of scrap metal. These include cost incurred for gas, oil, and other sources of electricity. If the costs of processing are high, the price that is offered for scrap metal may drop to make up for the difference.
Supply and Demand
Just like any other commodity, the demand and supply make an evident.
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Quality and Quantity
The value of scrap is highly dependent on the quality. Scrap metals covered in corrosion or insulation would not bring the value as much as clean, high quality scrap metal would do.
Imagine trading a pound of aluminum cans vs trading a truckload of aluminum scrap. Obviously, the truckload will fetch you more revenue. If the scrap buyers in Dubai get more scrap metal with lower overhead, including a lower number of transactions and transportation, they can offer a higher price.
Location
Most of the times, the scrap metal is not fully processed at the Dubai scrap yards. The scrap is transported for further processing. If the processing location is farther from the scrap yard, it will affect the overall costs, thereby reducing your profit margins. The buyers may also consider the transportation cost into the prices they offer for the scrap metal to protect their individual profits.
Price of Virgin Metal
Virgin metals are those metals that are newly mined and have not ever been used, recycled, or processed. If virgin metals are expensive owing to the energy and production costs, supply and demand; scrap metal becomes more valuable as an alternative. Similarly, if the virgin metal prices fall, scrap metal becomes less essential and industries can afford virgin metals.
International Commodity Trading
With countries getting more active in the industry, foreign market fluctuations influence the value of scrap metal. India and China, for example, deal with very large quantities of scrap metal imports. In case the economy slows down, scrap metal prices can take a hit as well. It is important to keep an eye on market trends to determine the right time to trade scrap metals to get the maximum value.
Lucky Group is the leading metal scrap buyer in Dubai and one of the largest recycling companies in the U.A.E. The company has spearheaded recycling initiatives to build a sustainable future for the planet. We guarantee the best value in market for the scrap metal.
Disclaimer: This article(s) has been prepared solely for information purpose, using publicly-accessible sources that are believed to be accurate and reliable at the time of publishing. LUCKY GROUP accepts no liability whatsoever for any loss or damage resulting from the use of information, images or opinions expressed in the report. LUCKY GROUP does not give warranty of any kind regarding the completeness, accuracy and reliability of the information included in the article(s).
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