Recycling is attaining a new perspective in the global economy today. Recycled products including scrap price has had a tremendous impact on the economy of various countries. What seems interesting about this industry is that it has a double sided effect. The first one is recycled products are low energy consuming and easy to manufacture. The second one is that it is turning into a highly productive and profitable market.
Scrap price and its directional behavior
Scrap price has been changing forever in the metal market industry. In some cases, change is for the good and so is it in the recycling industry. The prices of metals, plastics and glass obtained from waste have now reached a point where there cannot be a downslide in terms of prices. Even if there are fluctuations, these have been less on the lower side. Some of the industry experts believe that by the end of 2014, there will be an all time price hike in the recycling market.
The China link
China has had a huge impact on global markets in the recent times and also has been largely affecting the pricing of commodities, including the scrap price. The main reason is, with a population of 1.3 billion and an economic growth of 10% per annum to contribute; China indeed has had a massive impact on the scrap metal business scenario. Overall, even experts agree that the economic growth in China in the last 10 years had had a severe impact in the increase of price in commodities.
The supply factor
The economic growth in some of the developing countries has caused a global decline in the supply of metal. As the middle class is growing in countries, such as China, Malaysia, India, the Philippines and South Korea, people are now able to easily buy and replace appliances. This indicates that the metal consumption in these countries is going to steadily increase at a huge rate in the near future. That also calls for a severe shortage in supply. This is one of the areas where the recycling industry is gearing up to meet with the demands. That is why scrap price is also going up simultaneously.
Environmental factor
On the other hand, there is pressure from the environmental activist groups to reduce consumption and recycle more. They have been releasing scary reports about environmental destruction and have brought in the attention of some leading nations. Government of various countries like USA, the U.K., Germany, France and Australia are now taking recycling more seriously. They also see countries as mentioned above have a tremendous potential to recycle and become major suppliers of recycled material to the rest of the world.
Conclusion
In general, consumption and demand for various materials like steel, copper, aluminum, iron, glass, paper and plastic cannot be met with the supply. Also, the iron ore industry is moving deeper into the shoreline looking for metal. This is a major indicator that finding metal in the natural environment is becoming more and more difficult. That is why recycling is the only ray of hope going forward and the shortage of metal in the natural environment is causing a surge in scrap price.
Last Updated on 7 months by Thanam Industry
