How has coronavirus impacted the scrap metal market?
Wednesday, 3 June 2020
The COVID-19 global pandemic is taking a toll on the businesses in the scrap sector and affecting prices and the delivery of scrap metal. Because many people in construction industries have been furloughed, and many scrap yards are shut down for the time being, market growth has been affected.
Initially, European metal markets didn’t seem to be impacted by coronavirus, only business with China was disrupted. However, everything changed as European governments took measures to protect their population from the virus, closing many construction-related industries and halting shipments of scrap metal amongst other commodities.
Some industrial plants in Italy were shut down in mid-March and plants in Spain followed in April. The industry in other countries (Germany, Austria, and the Netherlands) continued to produce with certain restrictions. However, as things progressed, more and more scrap metal providers closed down.
Traditional supply and demand is now disrupted as industrial production has fallen across the world. UK aluminium prices have continued to underperform because of the closing down of nearly all UK aluminium smelters. Copper prices have seen rebounds across the past weeks, which is probably because the demand for refined copper is still there and as some countries re-open their economies, supply remains disrupted, driving up the price.
Low prices on UK metal markets are causing concern. This means that many traders are currently storing expensive metal purchases and not handing them in because they would lose a lot when they are sold.
Outlook for the rest of the year
Governments are continuing to assess the necessity of construction-related businesses being open, as well as weighing up the supply and demand for the support of their economies. This, of course, has to be considered alongside the safety of citizens and operations of essential services.
In the UK, with the growing stagnancy in the economy, further rise in demand is not anticipated, with low production and low demand in the scrap market.
It is advisable to check the price of ferrous and non-ferrous metals regularly, to see how the market changes over the coming weeks.
Get in touch with ASM
Be mindful that the value of scrap metals is currently fluctuating daily. By keeping a keen eye on trends in the value of scrap metals you can see the right time to cash in on your unwanted vehicle, for example. At ASM we can always tell you the daily prices over the telephone too.
All our contact details are here – get in touch with all your scrap metal queries.
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