How Will Brexit Affect The Scrap Metal Industry?
It’s been over two years since the UK voted to leave the EU and the future is more uncertain than ever.
The backlash over Theresa May’s negotiated deal with the EU has thrown the framework of our departure up in the air. A potential outcome consisting of no transition period has left many businesses extremely fearful, with many struggling to make contingency plans due to the sheer lack of clarity over how a no-deal Brexit would play out. The scrap metal industry is one industry among many that is suffering from the uncertainty. This article is going to look at how the vote has affected the industry and how the industry will fare from March 29th onwards depending on the possible outcomes.
How has the Brexit vote affected scrap metal in the past two years?
More so than the perceived consequences of leaving the EU, scrap metal prices have suffered mainly due to the uncertainty involved. Investors have been less likely to invest their money in the industry due to the uncertainty, instead opting to invest their money into something with less perceived risk. As a result, scrap metal prices have been fluctuating but generally have been lower and less steady than they were before the vote on the 23rd June 2016.
How will Brexit affect scrap metal in the future?
This all depends on the terms on which we end up (either willingly or unwillingly) leaving the EU. There are currently a handful of outcomes that could happen when we officially leave on the 29th of March.
How Would Theresa May’s Deal Affect Scrap Metal?
Despite two years of negotiation, the deal Theresa May has drawn up still leaves a lot of questions unanswered. The Commons Committee on Exiting the European Union described the deal as “neither detailed nor substantive”. Though the deal does entail a transition period, little is detailed about the landscape beyond the transition period, with many more negotiations needing to take place throughout the next few years to decide the specifics.
This is problematic for the scrap metal industry because there is still significant uncertainty about the terms of trade even if May’s deal does pass through the Commons. It is very unlikely for trade with the EU to cease altogether, especially trade for metals. However, as noted before, the scrap metal industry is suffering from uncertainties more than potential outcomes, and with May’s deal extending the uncertainty beyond March 29th, the scrap metal industry will likely continue to suffer as a result.
How Would No Deal Affect Scrap Metal?
A no-deal Brexit scenario will have various consequences for a number of different industries. One of the most significant consequences would be the reversion back from the EU’s trade rules to the rules of the World Trade Organisation. This would result in external tariffs set upon by the EU. These added tariffs may result in some scrap metal dealers offering less money for domestic metal to supplement the added difficulty in trading metal to clients across the EU. That’s why it’s important you come to a scrap metal dealer you can trust.
Hill Metal Recycling is dedicated to ensuring plans are in place regardless of the eventual Brexit scenario. Our operations can change accordingly to ensure that we are both in compliance with the necessary national laws and adhering to our promise of delivering the best prices to our customers. We will continue to operate at the highest levels of quality regardless of the outcome and aim to continue protecting the planet through our recycling efforts.