Although it hasn’t happened yet, it’s very possible that this may be the only way scrap metal prices soar. There are many reasons for the recent dramatic drop in scrap metal. In our opinion, bad economic policy created by the Obama administration that has caused steel industry these woes.
In only 18 months, metal has fallen about 75% off its highpoint of 18 cents per pound for scrap vehicles. Right now a car weighs in at only 4 cents per pound. The major reason for the price drop is contributed to a horrific Chinese economy.
China was one of the largest buyers of US Steel and because of their lack luster economic conditions, they have just about ceased all new construction and growth forcing the US Steel market to plummet. Other countries like Japan and India are also contributing to the drop.
Tough regulations right here in the United States also causes slower growth as the US economy relied heavily on foreign steel exportation. Right now steel production in the US has slowed to just about nothing as there is abundance. The price of scrap metal vehicles may continue to fall until one of 2 things. A change in US policies or war.
Historically, wars have brought the United States out of recession while increasing steel production instantaneously. With recent terrorist attacks from Muslim extremists in both France and San Bernardino California, it’s appears like the war on terror is far from over and it is possible that within the next 2 we may be looking at a major world war. Islamic extremists can not be converted or perused about their thinking or ideology. They are driven by their interpretation of the Quran God where we the free world and non believers of the prophet Muhammad are deemed as infidels.
Although not a fan, war may be the only way.