Nov 06 2008
Value of Recycled Cars Drop with Scrap Metal Prices
We here at Cars 4 Causes® are seeing the effects of the current economic downturn, credit crunch, or recession, however you like to term it. While donations continue to come in, the back end of our business, especially regarding recycled cars is currently being impacted. Cars that we recycle comprise the smallest segment of our business, but definitely impact the bottom lines of the charities we serve.
One aspect is related to the price paid for scrap metal in America and overseas to markets in China and India. According to the Institute of Scrap Recycling Industries,Inc. , the voice of the recycling industry, recycled scrap is utilized in manufacturing and currently accounts for approximately 40% of raw materials. Demand is increasing for scrap commodities in the United States and around the world. While many areas of the world economy are slowing down, other parts, such as energy, defense and aerospace remain strong.
The market trends were expected to continue for some time, and as long as demand exceeds supply, prices were expected remain strong. The current economic recession has caused the players in the commodities markets to change, many will no longer be able to continue as they have been in the past.
Our sources inform us that the price of scrap is falling. Brokers overseas are not buying in large part due to the credit crunch affecting the world economy. The end of October saw a dramatic drop in prices which had previously been strong due to the war in the Middle East, now falling due to the state of global markets. Many of these overseas markets are being adversely affected with buyers unable to meet their financial obligations. Having purchased these commodities on credit, they are unable to continue in the current economic climate. Slowing demand from manufacturers and builders is driving steel prices down and forcing producers globally to cut production.
The good news is that Cars 4 Causes® still has ways to direct cars to be recycled and get them off the road. Our affiliates are still picking up cars to be recycled at this time, and we are still able to get the highest average return in our industry for donated vehicles overall.
We will continue to monitor the situation and keep you updated as changes occur. Keep Giving Everyone!







