– Oh, here we found a weighing room. – My partner told me, pointing towards the forest on the other edge of the field. – They realized three tons of ferrous metal there two years ago. And they sold it for only five “rubles” per ton. Think about it, right? They earned only fifteen thousand then. And now, sixty thousand would be cut off like a bush in return. Yeah. I don’t know how long these prices will last, so we need to dig up and sell as much as possible.
The last phrase of my fellow cop has become a motto for many thousands of Russians in the last two months. And the thing is that thanks to the sudden rise in prices for scrap metal, ferrous metal mining has again become a profitable and attractive business for many metal detector owners.
So what is the reason for such a sharp rise in prices for ferrous metal, and how long can such prices last?
If anyone doesn’t know, I’ll give you some statistics. Even last summer, at scrap metal collection points, ferrous metal was accepted for 10-12 rubles per kilogram. In large cities they accepted 12 rubles. Resellers in rural areas with a sour face paid 10 rubles. At the moment, in cities they buy ferrous metal for 22 rubles per kilogram, in rural areas for 20. That is, as we see, the price of scrap iron has doubled.
As the domestic media write, there are two main reasons for such a sharp rise in prices. The first is the sharply increased global demand. The second is that the ruble fell by 30% against the dollar and euro last year. Also, separately, there is a suspicion of a monopolistic conspiracy of traders (intermediaries) on the Russian market. This was recently stated by the FAS (Federal Antimonopoly Service). But while the investigation is underway, no evidence has been found.
In general, the price on the domestic market jumped because wholesale buyers of scrap metal began to sell it en masse to Europe. Thus, creating a deficit in the domestic market. And, as we understand, this (shortage) is a temporary phenomenon. Therefore, we should soon expect a stop in price growth and a subsequent fall.
So, when should we expect a reduction in the purchase price of ferrous metal and should we expect it at all???
Analysts at Kommersant Publishing House predict stabilization of prices for metal products and scrap metal in Russia around the beginning of July. This is attributed to two reasons. First of all, by that time the mining industry will be able to meet domestic and external demand, thereby eliminating the shortage rush. Secondly, the Russian government is preparing a package of countermeasures to force traders to trade on the domestic market. To achieve this, they plan to introduce an increased customs duty rate on the export of scrap metal from Russia. The planned duty is 90 euros per ton.
But these measures will not be implemented until mid-summer. In the meantime, in the second quarter of this year, an increase in prices for metal products and scrap metal is predicted in the region of 25-30% of the existing ones. And here, friends, a good question arises. Is it worth rushing to hand over already accumulated scrap metal? Can I wait a little longer???
