In the Spring of 2008 I was buying and selling millions of tons of scrap metal. During that time we saw the retail price we paid to sellers off the street drop from $0.15 cents per pound for #2 Steel (most common) to $0.07 cents per pound. While most of you probably don't sell much scrap metal I'm sure all of you can remember what happened to the US economy in the months that followed.
This morning I went back to visit the old scrap yard to visit and to fix a little problem that my replacement has never learned how to fix (Something the boss breaks from time to time.) It's not dirty and never takes me long, it's nice to talk shop and the boss and I are very good friends since I helped him found that business...
Anyway, I noticed things were slower than usual and inquired as to why. The answer will be good news and bad news. The good news is that we will see a reduction in metals theft. The bad news is that #2 steel has fallen to $0.07 cents per pound.
For those who might not be aware, scrap metals are considered by many experts to be among the leading economic indicators. The largest buyers with the deepest pockets are currently buying low and stockpiling with no intention of selling any time soon. Our largest competitor locally is DH Griffin who is currently stockpiling everything he can get his hands on. I learned early on to pay very close attention to everything DH does. I also found that he doesn't mind telling people how to make money in the recycling business. He could have put us out of business from the beginning but instead he coached us on how to beat the City Council at their own tricks and paid us more for our steel than the steel mills would pay us.
The smallest buyers have quit buying altogether as the cost of shipping and handling exceeds the price of the product in many markets depending on how far you have to ship. Three months ago my old boss sold a container load of steel for $.22 per pound to some guys who thought they were going to make a killing selling it in Africa. Last week, when the steel came back he paid them $.08 per pound after they paid to ship it two ways.
Tighten your belts, Greensboro, hard times are ahead.
