The effects of the economic recession due to the Covid-19 pandemic closures continue, although economies reopen in most regions of the world. As seen in previous similar economic fluctuations, commodity prices also increased remarkably. For example, the price of agricultural and energy commodities increased, but there was no significant gap between pre-pandemic levels even in energy. However, there is a commodity whose price is rising in unprecedented amounts, namely industrial metals.
In 2021 steel prices boomed like other materials but only to be seen during the Great Recession in 2008. The pre-pandemic steel price has traded between $500 and $800 in March 2020. In July 2021, this price increased to 1800, which is 200% more! To give an example of industrial metals one by one, last May, copper was up 89%, iron ore was up 116%, and nickel was up 41%. The price increase of steel, an essential commodity for many industries, also affected many products, from cars to refrigerators. Then, why are precious metal prices rising, and what could be ways to deal with it? Let’s examine together!
Many factors play a role in ever-increasing steel prices, especially in the USA. The basis of this noteworthy change is the simple economic principle of supply and demand incompatibility. It is possible to summarise the reasons for the explosion in steel prices compared to other commodities and the reasons why cost and price are now detached as follows:
Supply-side factors: Covid-19 has seriously reduced mining operations. The impact of quarantine restrictions on trade, congestion at critical ports, and fuel prices also affected freight rates for transportation. All these elements led to a great cost increase. Production came to a standstill due to less demand at the pandemic’s beginning. Still, the increasing need for metal-intensive products grew with the changing consumption habits in the following period, catching firms off guard.
Storability: Metals are more suitable for storage than other industrial goods, making their prices more forward-looking and more sensitive to factors such as market expectations and interest rates.
Expectations for a faster transition to the green economy: Accelerating infrastructure and energy transition in line with sustainable development and green economy goals also increased metal prices because the new structure will be more metal-intensive. For example, according to the International Energy Agency, there will be a 40-fold increase in lithium for electric vehicles and a 20 to 25-fold increase in graphite, cobalt, and nickel. In addition, infrastructure works will increase the need for iron ore, copper, and other industrial metals.
Steel prices are expected to remain high in 2022 because the recovery from Covid-19 is planned together with a green economy structure, especially in the USA and the European Union countries. Metal is needed for energy transition and new infrastructure, but things get more challenging with these prices and low trade. Luckily, a sustainable solution comes to the rescue again, metal recycling!
We’ve all heard the phrase “Reduce, reuse, recycle.” With metal recycling, you can do it all. With recycling, you reuse the metal in a new area and reduce activities such as mining to produce new metal. Thus, besides obtaining economic benefits by reducing production costs, you act in an eco-friendly manner by using less energy and low carbon emissions. So, how is metal recycled?
Almost all metals are recyclable except those containing toxins like radioactive metals. However, the most prone ones are ferrous metals like carbon steel, wrought iron, cast iron, and non-ferrous ones such as aluminum, copper, lead, zinc, and precious metals. Now, take a look at the basic methods of recycling metals.
Collection: The first step is to collect almost any material made of metal. While separate metal containers may be placed, some businesses may establish a scrap yard to contain different metals.
Sorting: The primary purpose of this step is to determine the quality control and recyclable ratio in facilities. First, metals are separated from other materials at the waste stream. For example, metal parts are obtained by stripping the plastic from wires. Then, metals are separated by type and cleanliness, i.e., purity.
Processing: In this phase, metals are squeezed or compacted. Thus, metals that take up less space are then shredded into even smaller pieces.
Melting: Each metal is melted in a different furnace because different heat is required according to its properties. Although this may seem difficult, the energy used is much less than new metal production and mining.
Purification: At this stage, it is aimed not to leave any contaminants and to reach high quality. One of the most frequently used methods is electrolysis.
Solidifying: Melted metals are transported to conveyor belts to solidify and cool. It is then specifically shaped for use in making new metal products.
Transportation: At the last stage in the recycling facility, the metals are packaged according to their size and shape and sent to the factories to make brand new metal products.
Although metals are suitable for recycling and are important for sustainable development, it is clear that metal recycling is a complicated process from collection to the process in the facilities. It’s time to introduce Evreka to make this process easier!
Evreka offers sustainable development and a more livable world through digital waste management solutions. Focusing on the global ever-increasing waste problem and the goal of creating new sources from waste, Evreka enables you to plan and optimize every step of waste management, from collection to recycling facilities. Let’s look at Evreka solutions working for a sustainable future.
We have seen how complex the metal recycling process is in facilities. MRF Management, one of Evreka’s most striking solutions, allows you to easily view every detail in the facilities and control each process step. This way:
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