James Norvill, BCC Welsh Entrepreneur of the Year and Managing Director of GD Environmental Services.
The days of saving together a nice collection of scrap metal and weighing it in for a fair profit seem numbered as the value of scrap metal plummets to a record low.
The world economic crisis has had a significant impact on the value of waste within the commodity markets. The most surprising change has come in the value of scrap metal which has dropped from a respectable £185 per tonne in July to just £25 per tonne this October.
This price decline is another indication of the instability of the world economy. The slowdown in China’s economic growth over the last 6 months has created a noticeable drop in demand for scrap metal world wide. This decrease in demand accompanied with the housing crisis in Europe and the USA has lead to the inevitable downturn in the value of scrap metal. Only last week Steel giant Corus confirmed plans to reduce its production of steel in the UK by 20% over the next 3 months to adapt to market change. But aside from the economic problems what are the other repercussions?
The days of weighing in your old car for £200 seem numbered and having your scrap metal bin removed from your commercial premises free of charge is no longer feasible. This drop in scrap value could also have a significant impact on the environment. Rogue Traders within the waste industry have always thrived on the value of scrap metal as a steady cash earner. But with scrap metal so low we have begun to notice the unthinkable – the fly tipping of scrap metal! Over recent weeks its been astonishing for GD Environmental to be called out to clean up fly tipped waste where the majority of waste collected has been scrap metal.
This occurrence and the high value of transport costs is a true reflection on just how little value remains in the scrap market with little profit to be made when compared to the market at the beginning of the year.
If over the coming months scrap value continues to fall it wouldn’t surprise me to see more scrap metal being fly tipped across the UK. With fly tipping costing local authorities in Wales over £2.9m last year its essential that in coming month’s security is tightened on notorious areas of fly tipping and stern punishment is dealt to those responsible.
This latest hurdle has come at another bad time for businesses operating within the skip hire and recycling industry. With scrap metal one of the key components that can be reused and recycled from waste it helps to not only to increase business profits but also to keep disposal costs down for customers. But with this recent landslide in the value of scrap it will prove to be a long winter for many waste management companies across the UK.
For more information on GD Environmental Services please call 01633 277755 or visit www.gd-environmental.co.uk
