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Factors that determine values of metal

Prices of metal fluctuate the way foreign currency does, hence traders or metal collectors often need to be fully aware of the market. Nevertheless, there are several major factors that are pushing or pulling the change.

One of the most dominant factors will be the international market. Metal tycoons like United States and China are often accountable. For example, United States export an estimated 55% of the World’s ferrous metal yearly. While the annual trade in terms of metal scraps, between China and United States can be as high as 8 billion. As a result, market prices of metal can suffer great impact when there is a change in policies or regional demands.

Similarly, local market also played a role as government impact the industry by imposing affecting rules; while collectors, processing companies, or manufacturers influence the demands of different kinds of metals. For example, when economy is slow, there will be a decrease in public related construction or repair projects, thus the demand for new materials like steel; will be scaled down as a result. Occasionally, the sales of new car can also be a good indicator, if the demand for metals is changing. The demand will reduce when there is a drop in sales.

On the other hand, individuals who have direct contact with metals, also have a say in the price. Although armed with the same type of metals, but different collector will pay different price for them. At the same time, these collectors also keep their pockets safe by reselling the collected scraps to those who are willing to pay or when the market demand is high. Thus, it is not surprising to see collectors making monthly or weekly adjustments to metal prices, so as to suit their business model.

On a personal basis, one needs to know that the grades of metals will also affect their worthiness. While collectors pay individuals based on the amount of metals they have gathered, it does not mean that the heavier the weight, the higher the price. Most of the time, quality plays a more essential role as compared to quantity. For example, the price of insulated copper wire is much lower than bare copper wire even though they belong to the same category. Furthermore, if one does not know how to separate their metals properly, such as mixing the higher price bare wire with the lower price copper tubing, it is likely that, they will be paid the latter price.

Therefore, there is no excuse for not doing homework, if one is serious into metal scrap trading. It is advisable to keep a log book or excel sheets to keep track of all changes.