Scrap Metals Supplement - Welcome: Front and Center

Looking out at the metals recycling landscape, it would be easy to throw out some cheap platitudes: It is always darkest before the dawn. Misery loves company. What goes up must come down. No pain, no gain. But these clichés don’t truly highlight the magnitude of the drop in most metal prices, nor do they describe the subsequent impact this drop is having on the recycling industry.

Many factors have contributed to the collapse in market prices for a variety of basic materials. One of the most commonly cited reasons for the drop has been the rapid deceleration of the Chinese economy, which had the effect of shutting off steady to strong demand for many grades of scrap metal (as well as other secondary commodities, such as paper and plastics). In addition, some buyers have reneged on previously negotiated orders, adding to the market’s overall sour mood.

The dire situation with the U.S. auto industry, problems in the residential housing market and credit concerns have brought associated challenges that impact markets for secondary materials in addition to the general economic climate.

If there is any solace in this volatile market it is the fact that as price and demand have dried up, bludgeoning many scrap metal operations, media outlets outside of those that have regularly covered the recycling industry are taking notice of the problem and how the recycling industry affects and is affected by the general economy.

While historically many recycling industry professionals have been reluctant to talk about their businesses, the magnitude of the downturn has driven more industry professionals to voice their concerns to the general media. As a result, legislators are becoming more cognizant of the importance of the recycling industry, not just from an environmental standpoint, but also as a dynamic, vital segment of the overall economy. And that is not such a bad thing.