Throughout 2020, the COVID-19 pandemic affected many industries and caused prices to rise due to shortages in supply, but increase in demand. One of those industries that saw major price increases is the scrap metal industry.
Pieces for scrap metal increased to historically high numbers across the board while suppliers struggled to keep up. In 2021, prices continued to rise and have stayed consistently high. So, the question is will scrap metal prices go up in 2022? Let’s look at the data and check out predictions on scrap metal prices.
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Is Scrap Metal Price Going Up?
The simple answer is yes, scrap metal prices are going up. It is, however, not expected to continue to go up. The increase of prices since 2020 has been due to lack of supply. The COVID-19 pandemic resulted in massive shut downs and restrictions, which put a large dent in the metals industry. Factories were not able to operate, and scrap metal yards were closed due to restrictions globally, which caused a shortage of supply. Without metals to satisfy demand, when they became available prices would rise, and have been continuing to do so.
As things slowly return to normal and restrictions are loosened, things have been getting back to normal. Metal manufacturers were able to open back up and continue production. As supply increases, prices of scrap metal are predicted to drop. Another factor in prices, however, is access to shipping to get the supply to where there is demand.
With shipping issues occurring across the globe. This could continue to affect prices and cause an increase, but it is difficult to predict.
According to Moody’s Investors Service, an international credit rating agency, the positive outlook for the scrap metal industry has changed to a stable prediction. That doesn’t mean prices will go down, but they will level out from the historically high numbers of the past year in 2022.
Prices are currently high due to supply and demand issues. Production was slowed due to COVID-19, and as the economy recovers, prices may go back to normal.
Are Scrap Metal Prices Going Up?
As scrap metal prices continue to be at a high, including all types from primary base metals to precious metals, they will level out in 2022.
Primary Base Metals
According to Moody’s, aluminum prices are expected to stay high through mid-2022. They have exceeded $1.18 per pound, which has been the highest level in a decade.
Copper prices will stay high through late 2022 because of the shortages and structural deficit. There has been a struggle to keep up with copper demand, which continues to keep prices going up. Prices of copper have stayed above $4 a pound all year, and have been steadily increasing.
Zinc went from being in a shortage to now a surplus, so prices are not expected to go up. The rebound will lower prices even if demand for zinc stays high since production has been able to recover.
Aluminum prices are also expected to stay high until the middle of 2022. The current price is around $1.18 a pound, which is the highest price aluminum has seen in ten years.
Nickel is predicted to continue to have high prices, but they will drop in 2022 since manufacturing has bounced back. Since production is back to normal, nickel is at about $8.62 a pound, which is 40% higher than the average was in 2020, which was around $6.25 a pound due to the high demand and lack of supply.
Zinc prices are expected to fall going into 2022. The demand has lowered as production increases, which will continue to create a decline in price. A shortage of Zinc raised the prices, and now that there is a surplus of it, prices will be going down. Zinc production is also expected to increase in pace which will ensure no more shortages at least for a while.
The price of iron-ore has increased more than ever before due to short supply and high demand. Moody’s predicts that the prices will fall back to normal eventually, but as supply continues to be short, prices could stay high through 2022.
As for steel, there is still a huge problem with supply and demand. Prices may decline due to production being back, but the demand will continue to be there. Steel prices have also been oddly high throughout the year due to the shortage in supply that has never been seen before.
Moody’s predicts that inflation will keep gold and other precious metal prices higher than usual. Prices will lower from historical highs and stay consistent as 2022 approaches.
When Will Scrap Metal Prices Go Up?
The scrap metal market can be tricky to predict – especially after the last year. Prices have hit historical highs never seen before, and production was halted because of COVID-19. So, when will scrap metal prices go up? It is hard to say for sure, but predictions are being made for 2022.
One of the biggest factors affecting scrap metal prices is the supply chain. Even if production is back to normal, if they cannot get shipments to where the demand is, prices will continue to be high.
At this point, production of metals has returned back to normal after COVID-19 shut downs. This will increase supply of scrap metals which should lower prices back to normal. A big reason for the increase in metal prices was the lack of production in large markets like China.
On a smaller scale, local scrap metal businesses are reliant on people bringing them metals to resell. If there isn’t a constant flow of that, prices will go up due to demand and lack of product. This is also something to think about if you yourself have scrap metal you aren’t going to use on hand. You could make a bit of cash off of it.
Another factor that will affect scrap metal prices is the global demand. Over the last year, prices steadily rose due to demand from other countries. It again goes back to production and how much scrap metal can be produced.
To sum it up, scrap metal prices are not expected to increase greatly in 2022, but again it depends on the metals in question. Scrap metal prices are at an all-time high right now, and the prediction is that with increased production, prices will move back towards their averages by the middle of 2022.
So, if you’re planning to purchase scrap metal it may be best to wait until 2022. Even if prices do not decrease much, you will not be paying some of the highest prices for scrap metal that have ever been seen in history.