ASM Metal Recycling gives their viewpoint on different scenarios that scrap metal prices could face after Brexit.
With the UK set to leave the European Union by 31st January 2020, questions are increasingly being asked in the scrap metal industry as to what the impact of Prime Minister, Boris Johnson’s Brexit deal will have on scrap metal prices.
Selling your scrap metal for recycling can be a handy little earner, particularly if you’ve recently cleared out your home or workplace and discovered a large volume of waste metals that could be reused to ease the burden on the wider environment.
But is now the right time to sell your scrap metal or will the price of scrap metal be higher after Brexit?
In this article:
- Will scrap metal prices go up in 2020?
- Will scrap metal prices go down in 2020?
- How will the scrap metal industry be impacted by Brexit?
Will scrap metal prices go up in 2020?
It’s safe to say that much of the UK scrap metal industry has suffered in the last 12-18 months. Primarily from the uncertainty caused by delays to the outcome of Brexit. In September 2019 alone, some UK scrap metal traders reported a significant decline in the value of ferrous scrap metal prices of up to 50%.
This has been driven by reduced consumer demand for finished products. However, there has also been a domino effect from the top of Britain’s scrap metal industry, where some of the leading players have paid much less for ferrous metals in recent weeks, which has a knock-on effect for scrap metal values further down the sector’s ‘food chain’.
However, there is a chance that scrap metal values could improve into the New Year. Some industries have noted the possibility of a so-called “Brexit bounce”, with renewed optimism and vibrance in the event that the impasse in the House of Commons ceases and the UK proceeds with Brexit – or indeed revokes Article 50 and remains in the European Union (EU). Either way, the end to the political and economic uncertainty could yield short-term benefits for scrap metal values.
Long-term, many experts in the scrap metal industry believe there will always be a demand for scrap metal in the UK. Furthermore, if Brexit does transpire, the new trading opportunities with other nations, as well as those inside the EU, could bring with it a positive bounce to scrap metal values.
Will scrap metal prices go down in 2020?
Just weeks after the UK voted to leave the EU, a prominent metals recycler warned that “anti-British” sentiment in the global scrap metals market could affect exports. It could, of course, get even more uncertain for the marketplace should the UK leave the EU without a deal. A no-deal Brexit would result in the UK reverting to World Trade Organisation (WTO) rules as opposed to EU trading rules, leading to external tariffs imposed by the EU on UK metal exports.
If external tariffs are imposed and the UK is unable to come to a free trading agreement with the EU post-Brexit, this could result in many scrap metal dealers being forced to offer less money for domestic scrap metal. This would be necessary to balance the increased trading barriers across Europe that may affect their bottom lines.
How will the scrap metal industry be impacted by Brexit?
Ultimately, the future of scrap metal prices in the UK will be determined by the type of Brexit or, indeed, whether Brexit will happen at all. It certainly appears there is good will on both sides of the Brexit negotiating table to achieve a free trade agreement post-Brexit, but there is still the prospect of crashing out without any trading deal at the end of 2020, which could continue to curb momentum in the scrap metal market if this remains a possibility.
It’s very much a case of ‘watch this space’ until the political impasse has been broken on Brexit. Whether Brexit will have a long-term impact on UK scrap metals remains to be seen. Recyclers may already be focusing their efforts on alternative, emerging markets for their materials outside of the EU in a bid to fill the potential void.
To discover today’s scrap metal prices, please contact
ASM Recycling at www.asm-recycling.co.uk