American recycler news, inc. – metals market meltdown

Businesses are worried, consumers are cautious and investors are downright jittery. Small scale business with high profit So what does this mean for the short-term and long-term U.S. Low overhead high profit business and global recycling market?

Over the last 30 years, the global recycling market as a whole has become a very efficient mechanism. High profit business ideas india Gone are the days when markets were regionalized and fragmented, and a select few controlled the flow of raw materials.

Business with low investment and high profit Faced with today’s challenging market conditions, tighter profit margins from lower scrap metal prices have dramatically impacted the metal recycling industry.

Brett Muckle, president of Asset-X, a scrap metal brokerage based in Chicago, said today anyone can order an intermodal container, load it with scrap, and basically ship their raw materials anywhere around the globe. High profit plants This increased freedom of choice has leveled the playing field, and allowed a much more fluid and efficient scrap market. High profit small business ideas 2013 That said, when the U.S. High profit margin business india economy slowed in 2008, there were still markets abroad that where strong, and so scrap flowed overseas, until there was an equilibrium achieved in the global scrap commodities market. High profit online business ideas That balance has disappeared the last few years.

“In general, scrap markets are tied to economic growth,” Muckle said. Business with low overhead high profit “And as we now truly live in a global market, it’s not enough that the U.S. High profit business for sale auto sector had one of its best years in 2015, we need the world to generate enough global demand to consume the materials being generated by such a large and intricate recycling system. Business ideas with low investment and high profit in hindi China is consuming less and exporting more cheap commodities, Europe is slow, and the U.S. High profit companies still isn’t growing as it was 10 years ago. Items to sell with high profit margins And the infrastructure that facilitates the world’s recycling – the thousands of scrap yards and organizations – are feeling the pain.”

What has happened over the last couple of years has been a steady decline in prices, for all scrap grades. Low risk high profit business ideas Scrap steel, copper, and aluminum, are off anywhere from 40 to 60 percent.

According to Ryan Olsen, vice president for business information and statistics at the Aluminum Association, through October, preliminary data published by the U.S. Low cost business ideas with high profit Geological Survey (USGS) indicate that recovery of aluminum from scrap totaled an estimated 6.593 billion pounds, down 1.7 percent from the October 2014 YTD total of 6.710 billion pounds.

“This steady decline has made it difficult to stay ahead of the pricing curve, has slowed the flow of materials, and caused a general margin erosion for recyclers,” Muckle said. Low investment high profit business in chennai “We have seen numerous yards shut down in an effort to reduce overhead for the larger scrap conglomerates and smaller or more leveraged yards have gone bankrupt or shut their doors because they cannot weather this economic storm.”

Metal Logics, a scrap metal processing company in Seymour, Indiana has experienced a major downturn for the past 12 to 15 months. Small business high profit “Obviously January 2015 was the biggest one month slide – down about $90 per ton,” said Kyle Franklin, vice president and chief financial officer at Metal Logics. High profit small business ideas “A strong dollar coupled with China’s poor economic situation has crippled the export market. High profit products to sell on ebay At the same time, seeing the importing of steel from outside countries hit our domestic markets and has really created the perfect storm.”

Franklin stressed that these markets certainly present trying times for a scrap processor and recycler. High profit business While Metal Logics has seen the downturn, this is certainly not something they haven’t seen before in the industry.

“Back in 2008 we saw similar numbers,” Franklin said. Low price high profit shares “It is a very cyclical industry and currently we are on the downswing. High profit margin products in india The key is being able to ride out the rough patches and come through the other side with less competition and ready to strike. Low investment high profit business ideas We have seen about a 25 percent reduction in material across our door for 2015. High profit business in india 2012 Factor that in with prices falling from in the $300s a gross ton to in the low/mid $100s at the end of year and it is a challenge not easily faced.”

Experts agree that all sectors of the metal recycling industry are being hit hard. What is a high profit margin That said, Franklin is specifically seeing a change in public “across the door” purchasing.

“With prices so low there is no incentive for the average customer to bring in material,” Franklin said. Highest profit margin products on ebay “They can sit and hold or not even worry about recycling with prices as low as they have been. Low capital high profit business This is also the same for demolition projects. Low risk high profit business Many companies are waiting for prices to recover before they schedule teardowns. Business ideas with low investment and high profit It is re-training their market expectations. High profit business opportunities Something that they would have been paid well for in the recent past now will be a significant cost to them.”

The Aluminum Association has also seen a macro-trend in terms of aluminum recycling where the domestic industry is collecting and recycling more aluminum than ever before.

“In fact, around 70 percent of U.S. Business with high profit aluminum production today is making recycled, or secondary metal compared to just 30 percent of production in the 1980s,” Olsen said. Today high profit shares “Recycled aluminum requires 92 percent less energy to make than new aluminum, which has a major impact on the industry’s environmental footprint.”

For Tom Buechel, owner of Rockaway Recycling and the creator of the iScrap App, business is down significantly. Best business ideas with low investment with high profit “Anyone who says that they are doing just fine is not telling the whole tale and it will be like this for a long time,” Buechel said. Low budget high profit business “With the 2016 predictions very bearish right now you have to expect prices and overall business to be down. High profit products to sell At my scrap yard the customers who would do this part time have largely stopped because the return on their metals was not paying enough to continue to do it.”

“The price of oil will continue to affect what we are going to see with the prices and it will be a very interesting 18 months ahead of us,” Buechel said.

According to Jeff Griffis, vice president of DADE Capital Corp., located in Perrysburg, Ohio and a national service provider and equipment finance source for the scrap industry, “2015 was definitely a trying time for ferrous scrap metal recyclers. Low investment high profit business in bangalore But the general consensus is that ferrous scrap prices bottomed out in November, 2015.

“Ferrous prices increased in both December 2015 and January 2016. Low investment and high profit business Prices for finished steel products have increased. High profit margin industries Imports, primarily from China, have decreased in part due to the imposition of counter-vailing duties as high as 225 percent. High profit items to sell While it won’t be a quick recovery it appears that we’re on track for a return to normalcy in the ferrous market.”

According to Fred Seidenberg, partner at American Metal Solutions and former owner of Mid-Carolina, steel mills and recycling companies are in trouble. High profit shares “Companies that own shredders are basically in the red. High profit crafts All the shredders I’ve talked to are losing money on steel and are only able to make money on Zorba. Low cost high profit business And China has over capacity on steel – everything has slowed down to a halt and they are unloading it into America at cheap prices. Low cost high profit shares The last decade China drove the market.

As Olsen explained, just over 50 percent of U.S aluminum scrap is destined for export. Small business with high profit margin in india Year-to-date, however, U.S. Low investment high profit business in kerala scrap exports are down roughly 9 percent. High profit agriculture business in india A large reason for the decline is China’s decreasing appetite for foreign-sourced scrap aluminum.

“China has produced roughly 55 percent of the global primary aluminum produced in 2015,” Olsen said. Businesses with high profit margins “That’s up from 38 percent in 2010 and 11 percent in 2000. Low value high profit shares As China continues to produce more and more of the world’s aluminum, their domestically generated scrap continues to increase as well. Business with less investment and high profit Consequently, their appetite for U.S. Profit margin high or low scrap continues to decline. Low capital high profit business ideas China represented over 55 percent of U.S. Retail business with high profit margin aluminum scrap exports YTD (through Oct.), but that’s down from 63 percent over the same period in 2014 and 69 percent in 2013.”

“I have heard there are cities in China with huge skyscrapers that are completely empty – so many people are in poverty in China as they have overbuilt and over expanded,” Seidenberg said. Low investment high profit business ideas in india “They have too many steel mills. Retail products with high profit margins Their currency is devalued which is why the dollar is so strong. High profit business with low investment Nothing lasts forever but I think it will likely be a long slow recovery. High profit business india People in the industry will just have to adapt.”

Recyclers have spent years growing their reach, and building infrastructure, but when both volume and margins decrease, it becomes a task of how much fat to cut to survive, without hitting the proverbial “bone.”

“And as long as companies continue to allow prices to fall without resistance, there will be room left for markets to continue to slide,” Muckle said. Low budget high profit business in india “Some economists believe there could be another 10 to 20 percent drop left before that equilibrium is met, where supply matches demand. High profit low cost business Right now there is still too much supply, and not enough demand. Business with high profit in india In my 30 years in the industry, I have not seen this many bankruptcies or yards shuttering.”

In an effort to stem the tide, the industry is seeing yards diversify into other areas where they are not historically players, such as electronics recycling, auto salvage or even demolition.

Indeed, the key for Metal Logics’ success has been flexibility. Low investment high profit business in hyderabad They have branched into many new areas as a result of the poor markets. High profit items to sell on amazon “Trying to do more ‘useable’ sales has been a key,” Franklin said. Best business ideas with high profit in india “We are utilizing eBay and other platforms to sell what would have traditionally been scrap at higher returns. High profit margin items We now look to do more with by-product management as well including glass, plastic, cardboard, etc. Highest profit margin items on ebay And the biggest key for the scrap side is identifying markets that cannot wait for the market to improve to move inventory.”

Franklin believes we will continue to see more down pricing for a considerable time. Low cost high profit products “We are coming into an election year and we will see a holding pattern until we see the new direction for our president and economy,” Franklin said. High profit items to sell on ebay “We may have seen the lowest of the lows already, but I do not believe we will see any major gains in the market until 2017.”

Muckle also pointed out that as long as cheap commodities continue to flow in from abroad, it will displace domestic raw materials. Business with high profit margins in india “There is no immediate light at the end of the tunnel, and the consensus is at least another 12 to 18 months of these markets,” Muckle said. Ebay products with highest profit margin “Eventually the cost of collection, and to process scrap will hit a floor, or demand for raw materials will pick up on a global basis, and prices will stabilize. High profit business ideas philippines Until then, it is a battle of attrition, and the last person standing wins.”

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