It’s a mountain of scrap at E.J. Knight Scrap Material Co andpiling up. Exports to China and supply to local foundries have stopped abruptly. There are practically notakers for the Scrap. The mountain of scrap valued at half a million US$ in mid2008 is worth not more than 100,000 US$. Still no takers.
“I probably got a half a million dollars here in goodtimes,” Kamensky said last week. “In today’s market, it’s probably worth$100,000 — and that’s if I could get somebody to take it. Nobody wants it. Icouldn’t give it away.” – This is what the third generation Salvage yard ownerhad to say about the current market trend.
At its peak, aluminum was bringing 60 cents a pound. Now,Kamensky is paying 20 cents per pound. And it’s not just aluminum. Copper, justtwo months ago the hottest metal on the market, has fallen from $3 per pound to$1. Prime steel — for which Kamensky was once getting 35 cents per pound whenhe sold it — now goes for 6 cents per pound.
The conditions on the streets are far worse than that. Theaverage daily income of a street scrap vendor has dropped to below 30 yuan (4.4dollars). Compared to what they were making in mid 2008 it is less than half. Thefoundries have stopped procuring from the yards and the industrial output fellto 8.2 % compared to the previous month’s 17%.
All of a sudden the scrap Industry is in Chaos. It hasindirect effects on the environment like PET bottles going to landfills due tolack of buyers. So what is the solution for the situation? The Internationalcommunity should implement strict laws for recycling and ban any miningactivities for a certain period. Same should be applied to the polymerindustry, to regulate the fresh produce of raw materials for plastic pet etc.Yes, there will be layoffs in certain sectors but compared to the environmentalissues and the vast majority of people involved in the scrap Industry, it willbe a minimal damage. If we can act on this now we can certainly see the prices stabilizein 2009.