Last Updated: October 5, 2016
So it’s time — or even past time –- to junk your old car. But you really need a good price for it. Maybe you want to put that towards a new car. Or you’ve got another big purchase to make. Or bills to pay off. Or who couldn’t use an extra bit of cash?
So you’re ready to call the salvage yard and say, “Junk my car for $500.” Then you’ll wait for an “Okey-dokey.”
Right now, though, you’re more likely to get a sigh. 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.
But in 2015, scrap metal prices are…how shall we put this delicately? So it’s hard to sell my junk car for $500 cash. Several factors in combination have dropped scrap metal prices low and kept them that way.
Junk Car Medics will diagnose your car woes with cash. Unfortunately, right now, you may not be all that happy with the diagnosis.
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.
In 2014, the scrap metal industry was fat and happy. Early in the year, scrap steel was going for $400 per ton. Sellers all the way down the line were doing well. But then…something happened. By summertime, the price had dropped by about $50. Hhhhmm….not great…but it’ll go up, surely…
Surely not. Prices dropped another $50 during the fall. The biggest shock was waiting right around the corner. During February 2015, the price fell by $80. In one month! Prices haven’t rebounded yet during this year…and the outlook is not hopeful so junking your car for $500 cash is going to be tough.
We Can’t Junk Your Car For $500 Cash – Here’s Why
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.
Depressed yet? Sorry, we didn’t want to kill your buzz after you declared, “Junk my car for $500 cash.” Believe us; we’d like to. We’d love to. But right now, the scrap metal business is sickly, and there’s no indication of when it’ll feel better. Too bad Junk Car Medics can’t cure it. But we will give you a fair price for your junker. It just might not be the number you hope for.