RL Magazine
Edition 45
Getting Into The Scrap Market
by Gunaseelan Nadar, COO, Submitinme

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There are many reasons why someone would want to get in to the scrap metal market. For one, it is widely considered to be a much more stable alternative to investing in stocks and shares, given that prices tend not to fluctuate as wildly in the scrap metal industry. Added to that is the ongoing possibility of liquidating your portfolio, pretty much at any time, which avoids the need to find a buyer for shares or other commodities, through selling to scrap recycling plants or other dealers. But how would one go about getting involved in the scrap metal market, and what steps could be taken to ensure your scrap experience is a profitable one?

Before even considering entering the scrap metal market, a fundamental consideration is whether or not you have the resources to invest. As a general rule, you should only invest what you could afford to lose in a market within which you have no experience or knowledge. This is the worst case scenario for most traders and although unlikely its always a good idea to plan conservatively to cover any eventuality to make sure you can afford to bail yourself out if needs be.

Secondly you should consider trying to pick up some knowledge of the marketplace and how it works. For this there is no substitute for reading about the marketplace, on the internet and in related journal publications. Reading will give you a better idea of what’s in demand and what isn’t, and how best to structure your scrap metal portfolio. Without doing your research into the way the market works, you could end up learning the hard way which could be financially very expensive if you are unable to shift your investments when it comes time to sell.

Another word of advice: diversify your investment portfolio across different types of scrap to begin with until you become more accustomed to which types of metal are valued at which price. By investing all your money in one material, you could more readily end up incurring losses on your input if that decision turns out to be a bad one. However, by spreading your investment across a range of different materials and ensuring constant appraisal of your portfolio inventory you can maximize your earning potential and stabilize your investment to effectively hedge your bets within the scrap commodity market.

Before getting too heavily involved in the scrap metal commodity market it is important to pay due consideration to each of the crucial elements mentioned above to ensure you both know what you’re doing and you don’t lose your money. Additionally, by taking these precautions you can help increase the likelihood of eventually selling your investment portfolio for a profit, making it all worthwhile. However you approach getting in to scrap metal investment, make sure you have a broad understanding of the market and thick skin before you proceed, to give you the best chance of succeeding in your investment endeavors.
Gunaseelan Nadar is the COO at Submitinme in India specializes in recycling, With a previous background as NGIT at Baron Power Limited he has a Bachelor of Engineering at Madurai Kamaraj University.

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