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The “Peak Car” Era and Scrap Metal Implications…

Published by: ScrapWare On: February 28th, 2014 In: Blog, Ferrous Scrap Metal

Lately, this subject has gotten a lot of media attention.

One of the best articles was recently published by Bloomberg.com.

Some of points covered in the article include car-induced pollution, traffic gridlock, driverless cars, mass-transit, car-sharing fleets, and a lack of desire by young people to get a driver’s license.  Another point of the article is that newer cars stay on the road longer.

The image below was excerpted from the Bloomberg.com story.  It projects reduced auto production basis the above points.

2-28-2014 10-00-31 AM

All of the above translates into fewer cars being manufactured.  This also implies fewer cars being scrapped.

There are hundreds of automobile shredders in the U.S.  Many are using our ScrapWare software in order to make them more efficient, anti-theft compliant and gain inventory awareness.

Shredded scrap is used as feedstock for electric arc furnaces by steel mills.  The steel mills produce the steel used to make new cars.  Cars also have a great deal of aluminum and copper.  That supply chain is not too different than that  of steel.  This is a great oversimplification, but you get the picture.

There is a global overcapacity of steel mills.  Decrease the annual production of cars by 25-30 million and the problem gets worse.  It will also trickle down to the entire steel supply chain, as well as the non-ferrous supply chain.

If we have truly arrived at “Peak Car”, the scrap metal recycling industry should begin discussing how to adjust accordingly.

 

 

This entry was posted on Friday, February 28th, 2014 at 10:42 am and is filed under Blog, Ferrous Scrap Metal. Both comments and pings are currently closed.

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