At least two scrap metal businesses have ceased trading in the past month as market conditions in the sector show no sign of improvement.
Administrators from P&A Partnership were appointed to Chesterfield-based Richard Fletcher (Metals) Ltd on 1 December.
A spokesman from P&A Partnership told MRW the company had been marketed for sale for some time but a buyer could not be found. The site in Newbridge Lane, Old Whittington, has been closed and the majority of the 42 employees have been made redundant.
“We are currently clearing the site and selling off the scrap metal and machinery,” he said. “The site is now being marketed for sale.”
MRW understands that another scrap metal dealer, a mid-size player in the South East, has also ceased trading. Work at Aylesford Metal Company in Kent appeared to have stopped around two weeks ago, according to a neighbouring business.
The company is still listed as “active” on Companies House, but has yet to file a report on its accounts that was due in September. MRW has been unable to contact anyone at the company.
According to a senior trader, closures in the scrap metal industry in the UK are the symptoms of challenging operating conditions, with more businesses expected to close down in the coming months.
“The market has been very weak for considerable time and I don’t see recovery on the horizon at the moment,” he said. “Some people are left with very high stock as the market has fallen quite considerably. There is no real confidence.”
According to the latest MRW report, ferrous prices have now reached their lowest point since 2009, with drops over £15 per tonne on average at the end of November.
Most non-ferrous grades have been falling considerably. MRW data indicates copper prices declined 8.7% between October and November. Lead fell 4% and zinc 3.1%.
The trader said the sluggish market conditions were due to lack of demand from Europe and Asia and a weakening of the Euro.
He urged operators to keep turning over their products. “If you buy some materials today, sell it today if you can make a margin. Don’t hold on to your stock for the prices to come back.”