Little Ironies

It's long been an axiom that supply & demand are the two major factors in the pricing of a commodity.

Aluminum, say...

The price of aluminum is dropping, and dropping rather steadily I'm sorry to say. When I made my trip to turn in last week's harvest the price per pound had dropped by 5 cents to $0.55/pound. I turned in 24 pounds of aluminum cans last week and was compensated with a whopping $13.55 for my efforts.

This morning I took in another 24 pounds of aluminum cans and received $10.80 for my efforts. That's right, boys & girls, the price per pound for aluminum cans has dropped to $0.45 per pound since last week. That's a 25% drop from two weeks ago when the price was still $0.60/pound.

This recent drop in the price of aluminum at the scrap dealer frankly puzzles me. When dealing in most commodities, when an item becomes scarce, the price goes up. With autumn's arrival the number of picnics & other group events in the area parks & forest preserves has dropped rather substantially. Considering the cooling temperatures at this time of year, this is certainly no surprise.

It does however mean that there is far less aluminum available for harvesting, hence a smaller supply to be turned into the area recyclers & scrap dealers. I might also note that the number of harvesters has fallen off as well... (A small bright spot.)

So now we have a reduced supply of a commodity, being gathered by a smaller number of harvesters like myself, for which the price is less. According to my understanding of supply & demand in the marketplace that seems just plain backwards. The price per pound should be going up as the supply drops, not down...

Methinks it's going to be a long, hard winter...