Wavering Market Leads to Blurry Future for Automotive Recyclers

A new article entitled “Automotive recycling market volatile” (linked to here) from the American Recycler highlights the worrisome trend and cautious approach that companies and investors are taking with the automotive recycling market.  Currently experiencing one of the worst economic periods in decades, industry experts believe 2017 will be better though still unlikely to be booming by any standards.

Worried, cautious and jittery are three words that members of the automotive recycling industry would use to describe the current market.

 

According to Sean Kelly, from the Center for Resource Recovery and Recycling at Worcester Polytechnic Institute, the current market volatility “has a great deal to do with the foreign tariff battle regarding specific commodities, among other things, such as dumping (selling below cost).” ¹

It was recent that the U.S. Department of Commerce (DOC) imposed a 500% tariff on imports of cold-rolled steel.  China among other countries, is being targeted because their price dumping is negatively affecting the U.S. steel industry and prices around the world.  Lower prices for steel and smaller margins are surely weighing heavily on automotive recyclers.

So what are some automotive recycling companies doing to hoist themselves up?  Well a recently released study from the Aluminum Association’s Aluminum Transportation Group (ATG) shows that “the recycling rate for end-of-life vehicles to be in excess of 90 percent.” ²  From aluminum rims to harness wiring, recyclers find a purpose for each and every item pulled from automobiles.

Another key in the automotive recycling market going forward that should be paid attention to is the recycling of plastics.  Sorting systems have been developed that allows plastic to be separated in a way so that they have an increased value and a life beyond heading to the landfill.

“Due to the low price of scrap iron over the past few years, plastic, if packaged properly, can be worth more in value.  As owners, we need to maximize revenue wherever we can.” –Mike Bassirpour, GLR Advanced Recycling ³

With the future of the market in question we will have to see what companies prioritize in order to get ahead in 2017 and the future beyond that.

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NOTE: All figures are believed to be reliable and represent approximate pricing based on information obtained prior to publication. Advanced Remarketing Services is not responsible for the accuracy or completeness of the information provided, or for the use or application of information herein.