The global pandemic and economic damage wrought by COVID-19 has had profoundly negative effects on our economy. However, steel and ferrous scrap has seen a recent surge in prices. In today’s article we’ll examine this event and what that means for industrial demolition companies in Oregon offering scrap metal recycling services.
Surging Demand Means High Scrap Metal Prices in 2021
Fastmarkets reported in mid-January that their price index for U.S. hot-rolled coil reached a 60 year high of $1,160 per short ton. This has translated to ferrous scrap prices which have also seen increases earlier this year. The scrap metal price in 2021 has ranged anywhere between $60 to $120 per gross ton depending on the scrap grade and the local market conditions.
A number of factors contributed to this increase in scrap metal prices, which include:
- More demand in early 2021 from manufacturers
- Diminished steel imports and thus competition
- Depleted inventory for steel and ferrous metals
These factors have contributed to December 2020 and January 2021 being among the best market conditions that many ferrous scrap metal recyclers have seen in recent years. However, there are signs of this surge slowing as new COVID-19 strains emerge and new challenges present themselves to scrap metal recyclers, including labor shortages, transportation and logistical shortfall, and potentially higher regulatory costs.
Despite the unpredictable effect of these factors, 2021 continues to look overall positive for scrap metal recyclers.
Steel Production on the Rise
The World Steel Association reported that global steel production dropped by 0.9 percent in 2020. In the United States alone, there was a 19.1 percent drop in total steel imports in 2020. Because of this, steel imports were reduced in North America, creating a market where scrap metals started to command higher prices due to rising demand and a lack of imported steel.
The months-long shutdowns that many economies had to endure resulted in shortages of manufactured goods and raw materials. This was followed by increased demand and a rise in prices as global supply chains adjusted to the continually shifting landscape of the pandemic.
Demand for Scrap Metal Remains High
Recycled scrap metal prices remained high largely thanks to demand from overseas markets for the product. These markets, primarily in Turkey and Mexico, offered better trading volumes which helped increase the price for ferrous scrap metal exports. For example, exports to Turkey saw an 11.1 percent increase compared to that same period in 2019.
2021 Offers a Sunny Outlook for Scrap Metal Recycling
Despite the uncertainty of the marketplace, there is reason to believe that prices for scrap metal will continue to rise. As steel mills return to full production capacity after cutting back production in 2020, there will be room for scrap metal recyclers to fill holes in the supply chain.
Demand continues to remain strong and is continuing to grow. Demolition companies, many of which offer asset recovery services, are poised to return to delayed projects en masse, opening up more raw scrap that recyclers can get a good return on. These two factors mean that scrap metal recycling is poised to see its greatest year in the past decade.
Demolition Contractors in Oregon Use Asset Recovery to Offset Costs
Demolition companies in Portland are savvy to the fact that asset recovery is one of the best ways to recoup the costs of demolishing a building without sacrificing the valuable materials that can be recovered from the site. Metals like iron, steel and copper can be found in pipes, wiring, windows, doors, walls, and more can be recovered and recycled. Concrete substrate remains valuable and sought after, and recycled concrete can be remade into new concrete.
When you combine surging demand for metals and concrete at high prices with a lack of product on the market, you get a great opportunity to potentially offset the costs of construction and diverting waste from the landfill simply by turning to asset recovery.
Metal and Concrete Recycling
At Elder Demolition, our expert crews are trained in the careful dismantling and recovery of structures of all shapes and sizes before preparing the materials for recycling. We offer a wide range of commercial and industrial demolition services and scrap metal recovery services in Oregon, Washington, Idaho, and Montana.
We also offer signature precision deconstruction services to help divert waste from landfills and create a lucrative alternative through metal recycling and concrete recycling. Contact us today to learn how we can help you.