So it’s time — or even past time –- to junk your old car. How much is your car worth? Who do I sell it to?
First you may think to list it on Craigslist, put it on your front lawn with a for sale sign on it, see if anyone is interested in purchasing your vehicle. It sits…nothing….now you just want it out of your yard.
So you’re ready to call the salvage yard and say, “How much is my car worth?”
Right now, though, you’re more likely to get a sigh.
WAIT?!? WHAT?!?! MY CAR IS ONLY WORTH….WHY??
Auto salvage yards want to give you an excellent price for your vehicle; they really do. If they can, it means that they will do well, too, when they move your car along for scrap metal.
So let’s take a look back. But in 2015, scrap metal prices are…how shall we put this delicately? Crap, that is delicate, right? Several factors in combination have dropped scrap metal prices low and kept them that way.
Scrap steel is big business; it’s essential to the steel industry. It can be recycled numerous times without becoming weaker. Reusing steel requires less energy and creates less pollution compared to refining steel ore. Each year, 80 million tons of steel are recycled into new products, including construction materials, appliances, guard rails, fire hydrants, bridges, file cabinets and vehicles.
Here is what happened- In 2014, the scrap metal industry was going good, earlier that year we saw decent scrap metal prices. Then by summertime the price dropped about $50/ton. Ok not great…but not terrible…YET. The price will rebound, right? Well…. The price has continued to drop throughout the past 2 years, will it rebound? At this time it is not looking hopeful, the outlook for 2017 is not great.
WHY YOUR CAR IS NOT WORTH AS MUCH AS YOU THOUGHT-
All in all, it’s a pretty crummy slump. What’s up with that? Why did prices plummet, and why aren’t they going back up? It’s not like a roller coaster, up and down and up and down and up… It’s more like a ski slope with a pretty serious drop-off.
- Exports are down: The U.S. used to export a lot of scrap metal overseas. A LOT. To the tune of about 20 million metric tonnes each year. As recently as 2011, that number was 24 million. Not too shabby. But after that peak, the amount kept dropping until it was only 15.3 million tonnes in 2014. And that brings us to basic economics: when demand is low, prices are, too.
- The U.S. dollar is up: U.S. currency is on an upswing. Sounds great, but one effect is that it’s more expensive for other countries to buy American goods. And when products cost more, importers often buy fewer. That leads to, well, see #1.
- Canada is hot: The U.S. is importing more Canadian steel. Canada’s steel industry is shrinking, so they have more to send over the border. And if the scrap is in a city close to American steel mills, it can be cheaper to import metal than to transport it from somewhere else within the United States. Add a weak Canadian dollar to this mix, and imports are where it’s at.
- China is cold. The Chinese economy has slowed down, and that extends to the steel industry. We used to sell lots of scrap metal to China. But if they won’t buy it, we can’t sell it.
- Increasing imports of steel: China produces steel comparatively cheaply to sell to other countries, including the U.S. Because of this, other steel-producing countries are losing business. Where do they go then? To the U.S.! As more and more steel is coming in from other countries, American steel mills are not doing well. Since demand for their product is lower, they don’t need as much scrap.