How many times do you watch the news and hear about some thief that stole the copper wiring from streetlights? Why would anyone risk life and limb for some useless scrap?
The reason is that the copper in the wires is worth more in bulk then you can imagine. Metal prices are constantly fluctuating. Supply and demand can make seemingly useless cooper wire very valuable.
Common types of metals that have resale value are copper, gold, and brass. There are many others but these are the most commonly used in manufacturing.
Leave the Gold, Take the Silver
As in the example above, it’s hard to understand why someone would try to take copper wire from a light pole that is live. Thousands of volts race through those wires and one touch is almost surely fatal. The reason is simple and revealing. Copper is a common metal. A crafty thieve can gather it an amazing rate. And it’s easy to sell. Any wholesale recycler will buy it.
Gold is a precious metal. It is harder to find or acquire, and usually priced higher. So is silver and platinum. Precious metals can be more difficult to sell and usually wholesale buyers (pawnshops, etc.) charge too high of a premium if you sell to them.
Copper is a base metal. So are nickel, zinc and lead. These metals are used for many commonly manufactured items. Precious metals other than gold and silver are often used too. For example, platinum is used commercially for car parts, specifically catalytic converters. In the United States catalytic converters are mandatory. When this regulation went into effect in the 1980’s it created demand and the price went up.
On the grandstand scale, metals are traded on global exchanges. They are called commodities and their price can accelerate and decelerate quickly.
Commodities exchanges are a supply and demand based system. If there are more buyers than sellers (high demand, low supply) then the price goes up. If it’s the opposite (low demand, high supply) it goes down.
These global prices then trickle down to wholesalers, recyclers and others. In turn they determine the price a customer pays or receives for the metal.
Diving deeper, we know metal prices are market based. Traders in these markets buy contracts. These contracts can be a spot or a forward. Basically traders buy and sell these contracts based on where they believe levels of supply and demand will be a month or more forward.
Those prices you are paying for gold today? They were determined months ago. Metal prices can be volatile but common metals like copper tend to be very stable. When they change price on the commodities markets it is usually is not by very much.
Metal prices are an interesting subject. It is amazing that a handful of copper has its value controlled by a global market.