Non-ferrous scrap buyers are divider on whether or not Hurricane Sandy will produce enough scrap metal to have a meaningful impact on inbound material traffic and pricing, particularly as the market automatically moves into a seasonal slowdown.
A number of buyers this week are estimating that damage caused by Hurricane Sandy would have a marked impact on scrap flows. Many believe the scrap supply will start to build up in the coming weeks, cause many yards to become overloaded. In these situations, typically yards become so overwhelmed with inbound material, they don’t have time to process it. They just do their best to get it in and out, trying to minimize the impact on their company’s cash flow. They’re typically getting it cheaper than normal, because they’ll drop the prices on inbound scrap due to an overload of supply.
This is a direct conflict with the general seasonal tendency for prices to rise as snow and ice make the transportation and collection of scrap more difficult.
Some buyers, however, said they don’t expect the Sandy increase in supply to effect things so much that it would decrease prices, expecting the flow impact to be minimal. The specific types of damage caused by the storm seems to be more flooding than any sort of siding or windows being ripped out of homes. They, instead, believe the uptick will come in the scrapping of cars – couple with an increase in auto sales.
So in the end, only time will tell exactly what sort of direct impact the scrap industry will see as a result of the devastation caused by Hurricane Sandy.
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