Scrap Iron Prices Drop

Scrap Iron: Mixed Prepared HMS #1 and #2Scrap iron, HMS 1, HMS 2, cast iron, ferrous tin and used appliance prices decreased substantially today.

Even with a weaker dollar, commodity markets softened as international buyers have over bought and world inventories of used metals are at an all-time high.  Most nonferrous scrap products are expected to trend downward, as well.

Factory orders are down.  Consumer confidence is weak and emerging economies have sufficient supplies of scrap metals to last several months.  These pressures are forcing scrap metal prices lower.

Softened commodity markets coupled with higher US and European unemployment means fewer and fewer economic options for the growing number of working poor --especially for those who once thought of themselves as part of the well-educated middle class.

The stock market has enjoyed a six month run-up and created a false sense of economic recovery amongst those who still had a little cash to invest.  Commodities --including precious metals like gold, are still preferred over greenbacks.

Earnings reports by the big international companies this week may lead some investors and economists to over state their optimism.  Much of the good news expected to be reported by these giant conglomerats is more related to cost cutting measures, layoffs and increased service fees than to any real increase in production.

Soaring sovereign debt and the near total collapse of trillion dollar developments, such as Dubai, leave little doubt that higher inflation and increased interest rates are inescapable.

Lending to small business owners is expected to contract even further.  

Scrap metal traders and collectors who have established strong partnerships with their buyers may enjoy one to three more days of relatively stable prices, but should expect lower prices for their ferrous metals later this week or beginning next week.