 Sensitivity of scrap metal prices to global economic conditionsMPRA Paper from University Library of Munich, Germany Abstract: The scrap metal industry is part of the broader recycling industry that involves the collection,separation and processing of materials for manufacture into raw materials or new products. The demand for scrap metal is a derived demand – based on the demand for steel because scrap metal is an input to steel production. Steel demand in turn is based on demand by construction,manufacturing and other industrial sectors. Hence prices for scrap metal are a function of prices for steel. Scrap metal is an international commodity market – Australia is essentially a price taker and prices are set in global markets based on demand and supply factors. Prices of scrap metal in Australia are essentially set by the world price. Estimates of the sensitivity of Australian (or even global) scrap metal prices to global economic conditions are difficult to find. Nonetheless, one implicit estimate for Australia is that a 1 per cent fall in demand for scrap metal results in a fall in domestic scrap metal prices of 0.46 per cent. Nonetheless estimates of the price sensitivity of scrap metal to demand and global economic conditions can be highly volatile. Evidence suggests global scrap metal prices regularly halve and double over the period of 18-24 months. Keywords: Scrap metal prices; global economic conditions (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:35734 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
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