The US scrap metal market has surged by 50% in the past year and is set to continue to grow in 2018, according to a report by the US Department of Labor.
In 2018, the industry generated $5.8bn in sales and $5bn in profit, according the report.
The report also highlighted that in the second quarter of 2017, scrap prices were up about 5% from the same period last year.
“The current trend is that the American scrap metal industry is expected to grow over the next few years,” said the report, which was compiled by the Labor Department’s Office of the Inspector General.
“At the same time, however, the cost of scrap metal continues to increase, and we believe that this trend will continue to accelerate in 2018.”
American scrap prices are up more than 30% since 2016, according US government statistics.
The US government estimated in 2016 that the average price of a single piece of scrap was $1,000, but the cost has increased more than 20-fold since then.
The average price has risen nearly 100% since 2013, when the average scrap price was $60.
The total value of US scrap and scrap metal imports into the country increased by a staggering $10bn in the first quarter of 2018.
More than 30,000 US scrap sites are listed on the Federal Register, which provides a snapshot of the US economy.
US Government statistics also showed that the US has more than 4,200 scrap yards and about 9,400 facilities, up from about 2,500 in 2016.
According to the US Bureau of Labor Statistics, the majority of American scrap is used to produce metals for building materials.
It’s estimated that scrap prices have increased more in the last two decades than in any other time since the 1920s.
“While scrap prices peaked in the 1970s and 1980s, the rate of growth in the US scrap market since then has been very slow,” said John Rolfes, chief economist for the Coalition for a Sound Economy.
“This is a significant growth trend that has been going on for years, and I’m not sure why it’s accelerated in the current environment.”
He said that the growing price of scrap could be attributed to a lack of demand for the metal.
“There’s an abundance of these metals in the economy right now,” he said.
“In fact, the bulk of the metals that are being used for building construction are scrap metal.”
According to figures from the US Treasury, scrap metal is used in more than 2,400 manufacturing processes.
The bulk of these are for automotive parts, building materials, automotive parts and aerospace components.
In 2017, the Federal Reserve Bank of New York estimated that the cost to manufacture a US car was about $12,000.
It estimated that it would take $8,000 of scrap from one car to make a car in the future.