Scrap-metal sector is latest victim of commodities bust

As prices for steel, iron ore and other commodities have dropped because of a demand slowdown and oversupply in China, prices for scrap metal have also collapsed.
That is leading junkyard operators to stockpile cars instead of shredding them, stalling the auto-recycling industry and the chain of largely small businesses that make up the U.S. scrap sector, which is a linchpin of the U.S. industrial economy and an $105 billion-a-year business.
According to the Institute for Scrap Recycling Industries, U.S. scrap steel exports fell to $4.1 billion last year, down 34% from $6.2 billion in 2014, according to customs figures. The index price for scrap steel in the U.S. has fallen 29% to $203 a ton, from $261 a ton a year ago.
Mr. Staab, the junkyard manager near Pittsburgh, has been in the recycling business since 1973, and says he has learned to recognize business cycles. For example, “when the price of oil goes up, people bring in SUVs and trucks,” he said. Lately, he has been seeing a lot of economy cars, which he also believes indicates a sluggish economy. “We’re going to see a couple years of these prices,” he says. “We’ll just need to hang on.”

(Wall Street Journal)