Scrap Metal Market Spikes in April
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One quarter into 2018 and the scrap metal market continues its strong run. Last months metal market update showed a slight decrease as steel and aluminum tariffs were announced and buyers and sellers patiently waited to see how things turned out. However, this month the national average price for crushed autobodies rose $18 to break the $200 mark and settle at just under $212. Compared to last month the scrap average is 9.3% higher and in a year over year comparison, is 14.1% higher than 2017.
Overall in Q1 the scrap metal market is up almost 25% compared to where it was at the end of 2017. April has generally been a good month for scrap prices with increases the last couple years. 2018 outperformed the same time period by a greater margin than we’ve seen recently.
National Crushed Autobody Price Per Ton Index – April 2018
All regional zones across the country experienced positive growth in pricing but some zones improved more than others. Zone 3 (southwest) rose over 12% and Zone 5 (southeast) led the way rising up over 19% vs last month. The price per ton for crushed autobodies is hitting levels in each zone that hasn’t been reached since 2014-2015. Scrap steel sellers nationwide last month certainly have had a lot to smile about.
Scrap Metal Market Zone Pricing Map
Industry News: Trade Feud With China
Problems could arise for companies that recycle scrap metal and other materials stemming from the 25% U.S. scrap aluminum tariff that China imposed last month. China is the number one customer for U.S. scrap as they bought 2/3’s of the used paper and half the scrap aluminum exported last year. With the tariff increasing the cost of U.S. scrap aluminum exports to China, processors will likely boost their purchases of tax-free scrap from other places such as the European Union.
From a recent Wall Street Journal article, members of the industry have been making some comments on the subject. Joel Litman, of Texas Recycling Inc., said “if China doesn’t take it, you can ship it to other places, but nobody has the capacity that China does. Bruce Keizler, of SA Recycling LLC, would go on to say, ” if you cut out the exports, there’s going to be an abundance of scrap around, and that’s not healthy for prices.”
Aside from a general market concern here there is also a very real concern that recyclable material will end up in landfills if other buyers besides China can’t be found. We will be following the growing trade feud between the U.S. and China and reporting on any effects to the scrap metal market.