Scraponomics

My '91 Jeep Cherokee is stuck in reverse. The clutch has been giving me problems for a while - I really should have brought it in a few weeks ago. But, I didn't, and on Saturday I shifted into reverse, and it never came back out.

Anyway, tonight I called a tow-er, and he came by with his big, noisy diesel rig. With some help from my neighbor, we pushed the jeep up into onto the bed. Then I jumped into the cab and we headed on down to the clutch shop.

On the way there we talked about various things. He works for a scrap yard by day, and by night he tows cars to earn some extra cash. I told him that I had just sold my son's wrecked Lebaron, and was surprised at how many people called who were interested in scrapping it.

"Hell yeah" he said. "Why this jeep of yours would have been worth $700 at the scrap yard a few months ago. That's just for the steel - the catalytic converter and the aluminum hubs would have added another $300"

Wow! I only paid $2000 a few years ago for this jeep. My loss from depreciation is theoretically maxed out at 50%, as long as the market for raw materials holds.

Turns out that the scrap market has plummeted in the last few months. The reason? The recently completed 2008 Olympic Games in Beijing. Japan (maybe he meant China) apparently is the primary purchaser of scrap metal from Washington to Montana, and they stopped all the steel mill activity prior to the Olympics in order to clear the air a bit. With the chief buyer out of the market, prices have plummetted.