How Covid-19 is affecting the scrap metal shredder market
With the coronavirus pandemic affecting all aspects of the UK economy, the metal shredder market is no exception. With trade changing across a multitude of countries, the recycling market is near the top of the list of those to be affected. As the scrap market’s functionality is dependent on the prices of metal, a country’s economic position is a key component in its potential growth and success. Here we discuss how Covid-19 is taking a toll on the scrap sector and its businesses:
Changing currency values
Quite simply, if the currency value changes, the price of metal scrap will inevitably be affected and the general metal industry will take a hit. It goes without saying that the global economy is in disarray, and it’ll most likely take time for the value of currencies to be evaluated correctly. Plus, the situation is constantly changing, which makes this even harder to work out. However, the results of this will be crucial for the scrap industry and have the potential to determine the success of its future. This will then have a direct impact on any scrap metal shredders in the market.
As the Government continues to encourage restricted movement where possible in an attempt to keep the spread of the virus to a minimum, the scrap sector is being hindered. If people are unable or unwilling to move between cities, their metal scrap will stay put along with them.
This means that scrap dealers are more inclined to shut down during the pandemic, which will further affect the scrap metal shredding market, as its revenue growth is limited.
There are small rays of hope, as can be expected with such a regularly changing situation. For example, since China has recently lifted its lockdown, they can now continue to drive the metal scrap market, offering hope for growth in the near future. However, we have seen countries lift their lockdowns only to reinstate it weeks later when cases begin to rise, meaning the situation is extremely precarious.
Shortage of workforce
As mentioned above, many scrap yards have made the decision to close throughout the pandemic. Even those that haven’t are now suffering from a shortage of workforce, meaning they are likely to follow suit. Businesses may be short on money and therefore cannot afford to pay every member of staff, and many people are still afraid to return to work, particularly those who fall in the at-risk category if they were to contract the virus. The Government approach to the scrap metal sector looks to be fairly lenient, with them being more focussed on safety and ensuring essential businesses are able to continue functioning to some degree of normality.
As the economy slows to a stop, it is expected that the demand for the scrap market will decrease, meaning production levels will fall. Overall, the changing nature of the coronavirus pandemic leaves the scrap metal shredder market in a state of uncertainty for the foreseeable future.
However, all is not lost!
Bread4Scrap has been partnering with scrap metal recyclers in the UK since 2016, and we are here for you, whatever the situation may be. Don’t hesitate to contact us today for guidance.