When it comes to the scrap metal industry, many factors are included in the pricing of the various types of materials. Scrap metal, circuit board recycling and wire recycling and others are influenced by the characteristics of the market as well as the different price points and demands. Some of these factors include, overseas and local demand, currency rates and environmental components, among others. Here are some insights and expectations for scrap materials in 2017.
According to the 2017 Market Forecast from www.scrap.org , analysts state that there are a number of concerns that could stunt future price growth. This includes, the large volume of off-exchange aluminum stocks, LME aluminum price backwardation, flat physical market premiums, rising U.S interest rates, and the stronger dollar. Even with these concerns, the World Bank sees the average aluminum price increasing from $1,575 a mt in 2016 to $1,626 in 2017.
For most of 2016, copper has been falling behind amongst the rest of the base metals. An interesting fact is that there was an election surge in November, the reason being the expectations for copper-intensive U.S infrastructure spending and higher manufacturing output. There also has been some manufacturing data that indicated increased Chinese demand for copper. Wire recycling may see an influx depending on the copper prices.
Iron and Steel
The composite U.S price for shredded scrap jumped 37 percent from October 2016 to December 2016. The numbers being $197.17/gross ton to $270.83/gross ton according to Scrap Price Bulletin. Unfortunately, the increase of U.S dollar is likely to make U.S scrap less attractive on the global market. However, the World Association in Brussels expects to see an increase of 2.7 percent for this year.
Lead and Zinc
Last year lead and zinc topped the ranks for base metals last year. They increased from $1,500 a mt to $2,900 a mt by last November after the start of the year. This year it is expected that there will be an increase in both pricing and demand.
Nickel and Stainless Steel
Nickel prices are known in the industry to be difficult to predict. An example can be seen in last year’s numbers, the prediction from Société Générale (Paris) being a lot lower than was forecasted. But the International Nickel Study Group located in Lisbon says that the global demand for nickel might increase which might also exceed the production of nickel due to its unpredictably low outputs from last year.
Paper and Plastic
Recovered paper prices ended 2016 on a positive note by doubling its initial pricing. There were low domestic mill inventories of OCC and a good amount of demand from China last year. There will be three key factors for 2017; Chinese demand, Strength of the dollar, freight rates and the ability to ship quality material. It is predicted that they should see a boost in margins for this year.
For more information and details on the 2017 scrap metal market, consult the source here.
Pickard, Joe. "Managing Expectations-2017 Market Forecast." Scrap.org. N.p., Jan. 2017. Web. <https://www.scrap.org/docs/default-source/default-document-library/marketforecast_jf17.pdf?sfvrsn=2>.