MinnEcon note: Sarah Boden, a student interning this semester at MPR News and working with MPR’s Public Insight Network, ventured out recently to some north Minneapolis scrap yards to see who’s scrounging and selling metal in the recession.
“Many scrappers I talked to live on the fringes of society,” Boden said. “Then there are some average people just trying to make money.”
Here’s her report.
The search for scrap metal is a constant hustle, and a year ago it was a hustle that didn’t pay, so many stopped scrapping.
These days, “scrappers” can earn a good living.
Precious metal retailer Kitco reports that copper cost less than $2 per pound back in April 2009. A year later copper is worth more than $3.50 a pound.
On a recent afternoon, scrappers hurried to get their day’s scrap to Kirschbaum-Krupp before it closed at 4:30. It’s one of three scrap yards located in north Minneapolis where people can sell metal for profit.
The scrappers I spoke with say they find their metal in alleys or on the side of the road; some may even knock on stranger’s door if they see a pile of scrap in a person’s yard and ask for the material.
Charles Davis stopped scrapping back in October 2008 right after metal prices plunged.
“You be working too hard in that cold to get a little bit of nothing.” But now that prices have improved Davis has returned to scrapping. The day I interviewed him, was his first day back at Kirschbaum-Krupp.
The price of scrap can fluctuate dramatically, and not just because of supply and demand. Bob Garino, director of commodities for the Institute of Scrap Recycling Industries, says that speculation also drives metal prices.
“Speculators, at times, have an undue influence on prices in the short term, both on the upside as buyers and on the downside as sellers.”
Because of that, scrapping can be a guessing game.
To get a feel for where prices are headed, scrappers will call a scrap yard and simply ask the price of metal on that particular day. That’s just as well, because even the “experts” have trouble reliably gauging market trends.
“Because of unforeseen events long-term forecasts, analysis frequently don’t bear fruit and need to be revised on a regular basis,” says Daniel Edelstein, a copper commodity specialist with the U.S. Geological Survey.
The fickle market makes scrap an uncertain business for the yard owners, too.
Within walking distance of Kirschbaum-Krupp there are the two other scrap yards and the experienced scrapper knows to check prices at each before selling.
A year ago when scrap metal prices were at an extreme low, Kirschbaum-Krupp’s owner Dusty Gibbs says the company couldn’t pay its electric bill the market was so bad.
Nobody was buying metal, therefore the prices weren’t worth a scrapper’s effort, “They just sat on their material,” recalls Gibbs. “Why would they bring anything in?”
Stories from the MPR Archives:
December 23, 2009
May 20, 2007