Economies and societies are comprised of people, and people aren’t always the most rational actors, especially when times are tough. It just takes a few individuals stealing metal for scrap to destroy an electrical grid, as the city of Quetzaltenango has been discovering this week.
Guatemala’s Prensa Libre reported (Cortes de luz, por sabotaje) that 400,000 users in 7 departments across the country had to endure electricity rationing after 2 transmission towers collapsed last Tuesday. The problem? Robbers had stolen parts of the steel bases on 4 different transmission towers. The two towers that did not fall are damaged. Overall repairs are expected to take 5 days after which rationing will conclude.
The affected departments were San Marcos, Quetzaltenango, Chimaltenango, SololÃ¡, Escuintla, Retalhuleu and the north of QuichÃ©.
Related news articles on scrap metal theft around the world:
Man hole covers: Philadelphia, PA and Long Beach, CA, Mumbai, India
Memorial plaques and graves: Devon and Australia
Railroad ties: UK
Water Pipes: Ghana and Jamaica
Art: Cherry Hill, PA and North Troy, Vt (2007)
Gates: Clinton Hill, Brooklyn
Children’s Slides: Japan
Catalytic Converters: Newburgh, NY (They contain platinum. In April, platinum was selling for an average of $1,900 an ounce.)
The International Herald Tribune offers this explanation for the soaring prices for scrap metal:
In 2001, scrap metal sold for $77 a ton; at the end of 2004, it was $300 per ton, and today it’s approaching $480. Behind the rise, say the analysts, is China’s voracious demand for steel.
The construction market in China has been booming since the dawn of the new millennium, fueled by explosive growth in the industrial economy.
Steel companies in China have been racing to keep up with the demand, but iron ore production in China is limited, pressuring steel companies to sign long-term supply contracts with foreign mining companies. These contracts run into the billions of dollars.
Melting down existing metal is cheaper and more efficient than processing iron ore. Representatives of Chinese steel companies consequently have fanned out across the globe in search of scrap metal.