Battling Chinese Government Causing Drop in Scrap Metal Prices

There is alot of uncertainty and no main infrustucture around the world, some of the contributing factors with the collapse of Greece's economy spiralling them into severe debt and China's government is battling a property slump, excess capacity and capital outflows. Their economy expansion last year was at its slowest pace since 1990. There is presently a major decrease in demand from China for steel, iron ore and other scrap metals which has caused a drop in the scrap metal prices in Australia.

According to the Australian Financial Review (AFR) Steel production in China will drop 1.2 per cent to 813 million tons this year, before rebounding to 8 25 million tons in 2016.

We believe that this is just the tip of the iceberg and can see the prices dropping even further than what they are at present.  Unfortunately it all goes back to the age old saying "what goes up, must come down".  With that said once the dust settles we do anticipate for the prices to increase again at some point. 

To Read the Australian Financial Review article click hear

 


 

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