Hurricane Season for the Caribbean, Gulf of Mexico, and the Atlantic Ocean stretches from the beginning of June until the end of November each year. With it, weather patterns forming over the Atlantic bring in devastating winds and torrential flooding which displaces coastal communities and brings destruction. We’re often left to measure the fury of hurricanes in the Northern-Western hemisphere by the billions of dollars of destruction they bring. Each major hurricane or extreme weather event indeed leaves a lasting imprint on the economy. While numerous studies have been performed on how hurricanes impact wealth in general, some individuals have asked in recent years about the macro effects of specific industries, such as, how hurricanes affect scrap metal prices near me.
Hurricanes and the US Economy
To understand how hurricanes affect scrap metal prices in the US, it’s crucial to gain a clear view of how they affect the economy as a whole. When hurricane Andrew struck The Bahamas, Florida, and the US Gulf Coast in 1992 it caused over $27 billion in damage. In 2017 Hurricane Irma and Hurricane Maria caused in excess of $150 billion in damage combined. The direct economic loss that occurs from massive storms is often less observed and far more significant, however. In a study by the Federal Reserve on consumer spending, researchers found that discretionary expenditures such as retail shopping and restaurants drops dramatically when hurricanes approach. After hurricanes dissipate, on the contrary, consumer spending typically rebounds as retail, restaurants and trade resume normal operations and construction begins to repair damages left by the storm. The economic impact of hurricanes usually depends on where the storm occurs but is generally localized and doesn’t leave any lasting lag in the economy.
How Hurricanes Affect Scrap Metal Operations
When heavy flooding caused by storm surges accompany hurricanes, scrap metal dealers tend to see a sharp increase in metal recycling due to an influx of ruined cars, washers, dryers, air conditioners, refrigerators, other appliances, and building materials. In general, hurricanes cause a twofold problem for scrap metal dealers. Not only will scrap metal salvage yards usually face a substantial increase in scrap metal intake, but storms can also drastically delay the transportation of scrap metal material. Frequently, tow trucks must wait for floodwaters to recede before recovery operations can begin hauling away damaged vehicles. Trucks carrying scrap metal can take longer when storms affect over the road transportation, and bad weather at sea can hold ships at the port for extended periods.
How Hurricanes Affect Scrap Metal Prices
When considering how hurricanes affect scrap metal prices, there are even fewer studies than overall economic impact. It’s logical to assume that hurricanes affect scrap metal prices by causing a precipitous increase in scrap metal supply once individuals and companies begin salvaging hurricane-damaged structures and vehicles.
As a primary economic tenant, a sharp increase in supply tends to decrease the price, meaning that storms would cause scrap metal prices to fall. In reality, however, rebuilding efforts after a hurricane can actually place a more substantial demand on scrap metal including rebar and steel products that usually outpaces the supply available.
Therefore, what we typically observe from scrap metal prices after a hurricane is a sharp decrease in scrap metal prices, followed by an equal or more considerable increase as rebuilding efforts ensure.
Hurricane Dorian 2019 and Scrap Metal
During the first week of September 2019, Hurricane Dorian devastated The Caribbean and is currently threatening the coast of South Carolina with dangerous storm surges and Category 3 winds. While damage from the hurricane to the Eastern US seaboard has yet to be seen, it is an absolute certainty that massive amounts of steel and other metals will be needed for rebuilding in The Caribbean, which could have the potential to inflate scrap metal prices in specific locations.
Scrap Metal Prices in Tennessee
Scrap metal prices tend to vary regionally, so for the latest pricing feel free to give us a call. If you’re looking for the best scrap metal prices for your salvage material, contact Roane Metals Group or visit one of our two locations in Tennessee.
Sources:
Aladangady, A., Aron-Dine, S. Wendy Dunn, W., Feiveson, L., Lengermann, P., Sahm, C. (2016). The Effect of Hurricane Matthew on Consumer Spending. Retrieved September 5, 2019, from https://www.federalreserve.gov/econresdata/notes/feds-notes/2016/effect-of-hurricane-matthew-on-consumer-spending-20161202.html?mod=article_inline