Falling scrap metal prices

The role of auction houses is to make car trades easier by connecting sellers and buyers. For people in the used car business, they have another role of disused motor vehicles trade. When we (JPC) buy cars from Japanese people, we buy them in two types: cars which still have a market value and are still drivable, and cars which are going to cost too much to repair because of some fatal problems in main parts such as engines and are only good for scraps/parts.

In the former case, we sometimes sell them directly inside the country or overseas or otherwise we take them to an auction place. In the latter case, we sometimes take them directly to wreckers otherwise put them up for auction if there is a possibility of getting buyers there. However, if we cannot get our reserve price and cannot make a sale, we ask the auction place to find buyers for us. (Then the auction place hands them to the wreckers.)

About 3 months ago, cars with large engine displacement used to attract good money. This was because our neighbour China had run out of scrap metal to be used for construction for the Beijing Olympics and since last year the price of scrap metal leapt up, disassembled cars all of a sudden had value; all wreckers started to compete with others in buying them.

But this crazy situation was short-lived and ended abruptly. Since last month, the cost price at wreckers started dropping. This month, they are not even buying them. Auction places changed their policies from this week not to buy them. The Olympics finished and now with the bad economic outlook worldwide, there is no demand in China any more. Wreckers cannot sell them for a profit, so they stopped it totally.

This time last year, TV was showing pictures of a factory with a mountain of plastic bottles waiting for shipment to China but last week they were showing the same factory with the mountain 1/5 in size. The same as metals, this is because of the declining demand in China from economic stagnation.

One day we might have to pay to get rid of cars and plastic bottles…

The world’s economic situation did not used to affect Japan so much, so we could relax but now what is happening in the world is affecting us directly or indirectly and even small business owners like myself get damage from a global downturn in many aspects. Having a business like this, I have to keep up with the current world affairs. When I am home, I watch ABC and BBC news as well as reading business papers. My children do not like this because they cannot watch their favourite programme but never mind. I do not think it is too bad for them not to watch TV anyway. I am the boss of the house!


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★ JPCTRADE Home page : http://jpctrade.com/
★ JPCTRADE Blog : http://jpctrade.blogspot.com/

(Editor)
JPC TRADE CO.,LTD.
Kato building 4F, 1-1-2 Furuishiba, Koto-ku, Tokyo
Japan Used Motor Vehicle Exporters Association (JUMVEA)
TEL : +81-3-5245-7731
FAX : +81-3-3643-4955