MERCHANTS in the area are warning members of the public not to expect high prices for scrap metal, as the business is currently facing a sharp decline.

In the summer – before the Olympics – the demand for scrap metal in China and the Middle East saw prices for raw material rocket, but over the last couple of months the demand has died down completely, which has seen the prices plummet.

Dobwalls firm WH Orchard and Sons has witnessed the sudden drop in prices and, due to the drop of demand, has a stockpile of around 1,000 tonnes of cars.

'The price of scrap metal and scrap cars has collapsed and is now just worth a quarter of what it was before the Olympics,' said Graham Orchard, whose family has run the business for more than 50 years. 'Since the end of the games, the Chinese have stopped buying and there is just no demand for it any more. This has meant that we can't pay the general public the high prices we were before, and they just can't seem to understand that.

'We were paying up to around £100 for the scrap value of their cars, but now we can only really give them around £30 and that price is likely to drop even more before Christmas.'

Henry Flashman's ferrous and non-ferrous scrap processing merchants, based in Gunnislake, is also feeling the pinch of the sudden decline in scrap metal value and has seen a huge drop in the amount of scrap metal delivered to their yard.

'We were getting around 100 tonnes of scrap metal each day but now it's down to between 10 and 20 tonnes,' said Mr Flashman. 'This is because, now the price is down, dealers are reluctant to bring it in. Before, we were paying £100 per tonne of scrap metal, now it's only around £15, and that price is still dropping.

'The problem is, if people can't get any money for their cars, they will just dump them in the countryside rather than taking them to scrap.'