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PrintScrap metal dealers are having difficulty staying financially viable in a time when international metal markets have bottomed out.
It’s a problem that’s having a worldwide effect. In Sydney, the price of copper is just $1 per pound at the Paul Hashem Scrapyard.
That’s down from its peak of about $3 per pound during the metal rush on stock markets last summer. Aluminium has also taken a hit at a price of only 15 to 30 cents per pound from its high of $1.10 just months ago, said Georgena Jessome, operations manager at the Brookland Street scrapyard.
“The (price of ) aluminium hit everybody hard and people didn’t want to bring it in,” Jessome said.
She said it has resulted in a nearly 80 per cent drop in business due, in large part, to its large clientele base of individuals who bring in excess copper piping or wiring left over from home renovations.
From April until Christmastime, when business remains steady, Jessome said it’s common to average between 80 to 100 customers per day. But in the November and December period, the scrapyard only managed 15 customers per day, on average.
Generally nine people are employed at Hashem’s. During the winter months they take part in a weekly rotation where half the employees work a week and the others work the next week. But due to the financial crunch winter rotation started earlier than normal, in October.
“Now we’re down to only three people working each week,” Jessome said.
Tammy Donovan of North-Metals Construction Ltd. said the company, which has a much larger commercial clientele than Hashem’s, had to cut back in both hours and employees when metal prices began to sink in the fall.
“By the end of the first week in October (the price) had gone down drastically. We thought (scrap steel) would go down $60 a tonne but it actually went down $125 a tonne,” said Donovan, who added the company is only “shipping out what we have to” in scrap metal to keep cash flowing.
“Within a week-and-a-half we had to lay off probably seven to nine people.”
There are now four people employed at the Sydney Mines operation.
Donovan said those layoffs may be seasonal if metal prices begin to increase in the spring but many of the laid-off employees couldn’t wait for word and moved out west for work.
She’s optimistic the price of scrap steel, at least, is turning the corner with the reopening of steel recycling mills in Quebec.
“Today we decided to start buying scrap steel and tin again, and we’re hoping we’ll be able to start shipping it by February or March.”
At Hashem’s scrapyard, Jessome thinks people are now holding on to scrap metal with the expectation the markets will rise again and then they’ll be able to sell the scrap for a decent amount of money.
“The material is still out there. It’s just that people are hoping to get a better price than what they’re getting right now,” she said.
“Unfortunately, that’s not looking like it’s going to happen.” (Source: Cape Breton post)
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