Prices of empty cans increase

Source: http://thestar.com.my/news/story.asp?file=/2006/5/20/nation/14287639&sec=nation

Saturday May 20, 2006

Prices of empty cans increase

By EMMELINE TAN

PENANG: With aluminium prices hitting a record 18-year high, empty aluminium cans are also fetching higher prices.

Scrap metal dealers here are now offering between RM4.50 and RM5 a kilo for aluminium cans.

Two months ago, the price ranged from RM3 to RM3.80 a kilo.

Prices of metals like aluminium, copper, zinc and nickel are at multi-year highs in the world market due to speculative buying amid concerns over limited supply.

To attract sellers, scrap dealers here are hanging up bags of empty cans and banners outside their shops to announce their high purchase prices.

One dealer Thiagarajan Sengodan, 40, said the aluminium cans were exported to Japan, South Korea and Taiwan.

Checks at several dealers in George Town showed that the highest price offered was RM5 a kilo at a shop in Acheen Street.

Owner Shammugam Ramasamy, 46, said he bought some 20kg of aluminium cans per day.

Another dealer Shunmugam Muniandy, 39, said the dealers were worried about price fluctuations.

If the price drops drastically, dealers will be stuck with surplus stock, he said.

While metal prices fluctuate on the London Metal Exchange (LME), Shunmugam said dealers here fixed prices based on the local supply and demand situation.

During the second quarter of last year, steel prices were much higher here than on the LME because of demand from China, he added.

Thiagarajan said dealers were worried about their cash flow.

Although the price is higher, our profit margin is still the same but we have to fork out more cash to buy the cans, he said.