The scrap metal industry in Los Angeles has faced significant economic pressures, resulting in a 40% – 60% decrease in price per pound of metal since 2011. In the article “Breathing Room,” published in Recycling Today, Steven Werth discusses the factors contributing to this downturn, as well as how Chapter 11 reorganization can enable failing scrap metal companies to regroup.
Due to the increased supply of scrap metal in 2016 from residential construction and demolition, and reduced demand due to economic slowdowns in countries such as China, the price of scrap metal has been trending downwards for some time. Chapter 11 reorganization can be helpful to companies that recycle, acquire, and sell scrap, as it provides additional time to stabilize the business and prepare a plan to pay debts, avoiding the need to sell scrap immediately at historically low prices.
