Operators of secondary raw material buybacks confirm that the prices of recyclable waste, especially metal, are falling. On the other hand, they state that it is only a return to the usual prices before covid.
“The Covid period was a period of hunger for raw materials, metal prices rose to unprecedented heights. But it gradually went away and the prices stabilized at the usual prices. For the decisive types of metals purchased, it is in the range of 3.5 to six crowns per kilogram, summarizes the chairman of the Union of Buyers and Processors of Secondary Raw Materials, Petr Miller.
Expensive gas. It also builds less
As far as secondary raw materials are concerned, the Czech Republic is not self-sufficient and dependent on imports. Both demand and supply are determined and changed by circumstances that redemptions can hardly do anything about. “In April, for example, prices were affected by Ramadan in Turkey, which is the largest importer of scrap metal,” explains Miller.
Of course, the conflict in Ukraine also has a fundamental influence. On the one hand, some types of steel previously imported from the East are now practically unavailable, and on the other hand, gas prices have jumped sharply, the future supply of which is completely uncertain. “It literally shook the metal and non-metal scrap market. The announced problems with gas supplies forced the smelters to behave cautiously, so they pre-supplied and probably reduced production as part of the pan-European uncertainty,” adds Miller.
According to economist Lukáš Kovanda, the drop in prices is also due to the low interest of smelters in old iron. Apart from gas prices, he has one more explanation for that. Cooling of the real estate market. Steel components of building structures are made from recycled scrap, which are part of the vast majority of new buildings. Steel serves as reinforcement for concrete, it is used to make metal profiles, cabling, pipes.
“The construction industry is going through a crisis. Developers dampen plans for new construction. They are afraid of putting too many apartments on the market that no one would buy due to rising interest rates,” explains Kovanda. If less is built, the demand for steel is lower.
He only raised the price of paper. But also the most important one
Metal prices went down by tens of percent. For example, the Barko scrap metal in Zastávka near Brno buys a kilo of iron scrap for three to four crowns. Two months ago, however, people could get up to five crowns per kilogram.
“There was an unusual upward swing in prices this year, now it’s coming back. The drop over the last two months was drastic and now we are at the prices that were usual two years ago,” says Pavel Kuzník, head of the Barko scrap metal facility. The price of copper, which some time ago was bought from them for 200 crowns, also fell by a whole quarter. Now they offer 150 crowns per kilo.
The Pardubice scrap yard Jarý also reports a significant drop, especially for iron, over the last two months. “The prices of raw materials are jumping a lot now. The price level for iron was now at a year high, but in the last two months it has halved. The prices of aluminum, copper and stainless steel have been on a swing all year, now they are at a minimum,” says Jarý Radek Hanák, operations director of the scrap metal. They currently buy a kilogram of metal scrap for 4.70 crowns, while in May they offered it for 7.80 crowns.
“I don’t know of a metal whose price hasn’t fallen. For example, we bought type 27 iron (sheet metal) three to four months ago for nine crowns per kilogram. Today we are buying it for four crowns,” adds Tomáš Kempa, head of the Ostrava company Kempa Šrot.
Of the secondary raw materials, only the price of waste paper is increasing. According to Kovanda, we should also look for covid behind this. In the lockdown, a large part of consumers moved to e-shops, which use a lot of paper to package shipments. And not everyone returned from e-shops to brick-and-mortar stores. The demand is also increased by the fact that paper is increasingly promoted as a supposedly more environmentally friendly alternative to plastics in packaging.
“Now the prices of paper and cardboard are rising here. We buy paper for 3.50 crowns per kilogram. Processors are able to offer us up to six crowns for it, almost twice as much as at the beginning of the year,” says Radek Hanák from Jarý scrap metal. In the end, we all experienced the rise in the prices of waste paper first hand. It is reflected in the price of the toilet, which has risen in price by tens of percent in a year.
To the collections now, says the economist
According to Lukáš Kovanda, the demand for iron will continue to weaken in the fall, just as the demand for real estate will weaken.
“It is reasonable to fear that the prices of raw materials for collection have yet to bottom out. People don’t have to get a penny anymore. They should hurry up with the collection now if they want at least some financial compensation. The last ones to take advantage of the already very low prices of raw materials will be pensioners, single mothers and the so-called working poor,” advises the economist.
Petr Miller from the Association of Buyers and Processors of Secondary Raw Materials is more reserved. “I would need fortune-telling to predict what will happen on the scrap metal market.” According to him, the development of the war between Russia and Ukraine and the sanctions against Russia will be crucial.
