‘Cyclical’ scrap metal market cools

  • Milwaukee Journal Sentinel
  • Wednesday, November 4, 2015 3:03pm
  • Business

MILWAUKEE — Ron Loos says he recently received $112 for a bin full of scrap metal that, not long ago, would have sold for about $600.

Loos said if the price drops much more, he might have to pay someone to haul away the scrap material from his business, Quality Tool &Die, based outside Milwaukee.

“It’s a big change from a couple of years ago,” he said, when people were stealing all kinds of metal because it was so valuable.

Scrap metal is a key ingredient in the manufacturing of new products. A global clamor for it has resulted, at times, in high prices and extreme actions — such as the theft of cars for their metal value.

Now, with a slowdown in the global economy, scrap metal prices have plummeted. Material that sold for $220 a ton in January, for example, now sells for about $80.

A few years ago, scrap metal from the United States was one of the top exports to China, where it was melted and manufactured into new products.

Now that China’s economy has slowed and industrial activity is down in other parts of the world, there’s less demand for raw materials.

“It’s a world economy now. What goes on in China affects what happens in Milwaukee,” said Jeff Isroff, CEO of United Milwaukee Scrap, a metal recycler in Milwaukee.

The strength of the U.S. dollar, relative to foreign currencies, has made the situation worse for scrap-metal businesses.

“But probably the biggest factor has been supply and demand. The fact of the matter is the supply has outpaced the demand worldwide,” Isroff said.

Prices for aluminum, copper, nickel and other materials have slid.

Steel mills that paid about $330 a ton for steel scrap in January, paid $165 in October.

“To say that the ferrous scrap metal market has collapsed, from a pricing standpoint, would not be hyperbole,” Isroff said.

The scrap metal industry isn’t going away, but individual businesses have closed or consolidated with others.

Prices are likely to get worse before they get better, according to industry experts who say they don’t expect much of an improvement until 2017.

“It’s a cyclical market. No one can really see where the bottom’s at,” said David Cauble, vice president of Cimco Recycling, in Milwaukee.

“This is a difficult time. You have to be smart and manage your money … and realistically, if you are just starting to do that today, it’s too late,” Cauble said.

Some businesses have stored scrap material while they wait for the price to rebound.

That’s almost like trying to predict stock market prices, however, and most businesses can’t afford to store material for too long.

Cimco has eight scrap metal yards. Cauble says the company has learned to weather the downturns that come periodically.

“We know that if we get metal in, and ship it out, we make money every month,” he said.

Some scrap metal businesses say they were getting about three times more for the material a year ago, and now they’re hesitant to spend much time and money on cleaning up yards filled with scrap metal.

“It’s getting to the point where you almost have to charge people,” to haul it away, said John Marty, co-owner of Anything Goes Salvage, in Waterloo, Wisconsin.

While the prices are down, he’s spending more time buying and selling old tractors and parts for tractors, including sales on eBay.

As for scrap metal: “If you can buy it cheap, then it’s all right,” Marty said.

People who make a living scavenging scrap metal are also struggling, sometimes getting about $20 for a pickup truck load of material they gathered from the trash.

“It seems like there are fewer ‘scrappers’ out there. I have heard guys talking about the prices being off, and that has made it less worth their time,” said Tim Nelson, a pastor at Transformation City Church, in Milwaukee, who knows metal collectors in his neighborhood.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.