Do Oil Prices Affect Scrap Metal Prices?
Like many markets, there are many outside factors that can affect the pricing of another market. This is true in the metal scraping and recycling industry as well. Demand is always a driving factor for the price of anything in any market, but there are always tens or hundreds of factors that influence pricing as well. When it comes to scrap metal pricing, oil pricing does play a role in prices.
Oil affects so many things for so many reasons. Think about it, if it is more expensive to run machines because of the oil prices being so high, then the overhead will affect the price of the new production of metals and thus drive the prices up. But when the pricing of oil is low for such a long time the reverse affect will begin to take place.
If oil prices are so low it will affect the overhead, driving those prices lower, and then from there the scrap prices will start to take an affect. There will generally be a bit of a hangover affect because some of the materials that are needed will need to fill higher priced orders, but the overall picture will make sense because of the scrap prices.
For those who scrap metal often, they may try to figure out all the factors that influence pricing. Using oil prices to do so is not always the best idea. In the last 10-15 years the markets have changed so much. And because of other factors, its hard to directly correlate the price of oil to the price of scrap metal.
Looking to have Second Street Iron & Metal take care of your scrap today? Contact us now to get your junk off your hands!
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