Historically, the scrap metal industry has demonstrated remarkable economic stability. Yet that's not to say that that the forecast always remains sunny; just as in any industry, down years can strike from time to time. Fortunately, the scrap metal industry saw steady gains in 2017, with more or the same predicted for the year ahead.
Investors, building contractors, and even regular homeowners can benefit from a broader knowledge of fluctuations in the scrap metal market. If you would like to improve your knowledge of scrap metal prospects for 2018, read on. This article will discuss projected growth trends for two of the scrap metal industry's best performers: steel and copper.
Steel
The outlook for steel markets in 2018 remains strong, as detailed in an assessment issued by the World Steel Market. They claim that steel demand should continue to grow at its current pace in most of the world. The one exception to this will be the Chinese market, which is expected to plateau as growth slows down.Excluding the Chinese market, the World Steel Market estimates that global demand will increase by 3.0% in 2018. This growth can be explained by above-average economic performance in developed economies such as those of Japan, the United States, and the European Union.
In addition, emerging economies are expected to perform more robustly in the next two years that they did in 2017. Political and economic reform initiatives in countries such as India, Mexico, and Egypt will play a large part in this growing trend. Growth in Central and South American countries is also expected to have an impact, producing as much as a 4.7% jump.
In addition, emerging economies are expected to perform more robustly in the next two years that they did in 2017. Political and economic reform initiatives in countries such as India, Mexico, and Egypt will play a large part in this growing trend. Growth in Central and South American countries is also expected to have an impact, producing as much as a 4.7% jump.
Concerning scrap steel specifically, things may be even more optimistic. In this regard, China remains a key player, thanks to their Green Development Targets. This initiative mandates that Chinese steel production must incorporate up to 220kg of scrap steel for every ton of steel produced through 2020. As a result, Chinese imports of scrap steel should show moderate gains.
Copper
Copper possesses an uncanny ability to predict swings in the economy at large. Historically, surging copper prices have almost always preceded overall boost in economic activity. Falling copper prices, on the other hand, tend to predict economic stagnation. This bodes well for the year ahead, with copper prices expected to remain on an upward trend.Two key factors play into the continued growth of copper markets. The first factor involves increasing demand for copper in the automotive industry, specifically with regards to electric cars, whose batteries and electric motors both utilize substantial amounts of copper. As more and more auto manufacturers introduce electric cars, the price of copper will continue to soar.
This growth trend should remain remarkably steady in coming years. In fact, experts have predicted that the demand for copper to be used in electric cars will rise nine-fold over the coming decade. Whereas 185,000 tons of copper were used for this purpose in 2017, by 2027 that number may be as high as 1.74 million.
The second factor driving copper growth involves declines of up to 2.5% in the world mine production of this metal. Such a decline creates a market deficit that will act to increase the price of copper. This represents a boon for the scrap copper industry in particular, as it offers a unique opportunity to seize a greater share of the overall copper supply.