Unlike big recycling firms, which are better informed and thus more risk resistant, individual scrap collectors and small junk depots are more vulnerable.
Liu Mingqiang, 43, has been running a reclamation depot in Cheng'en Hutong in Beijing's downtown area for six years. He is considering shutting down his business.
"I have never undergone such a bleak period. Rent, staff wages and other expenditures have gone beyond the total income in the past two months," Liu said. "I do not know if I can hold on until the crisis ends."
Before October, Liu, formerly a migrant from the central Henan province, earned more than 10,000 yuan per month, a quite enviable income compared with the average 1,500-yuan monthly salary of a college graduate.
Two weeks ago, he delivered three tons of scrap iron to his longtime business partner Xihongmen Recycling Company. "They made a hard bargain and even asked for a price below my purchase cost," said Liu, who finally gave up the deal and drove back his cargo.
Many in his trade could no longer suffer losses and instead turned to selling fruit or working in construction sites.
Liu had thought of returning to his rural hometown for farming, but still remained undecided. Mao and her husband also shared the same hesitation.
The Chinese government promised a stimulus package estimated at 4 trillion yuan to finance programs in 10 major areas over the next two years, including low-income housing, rural infrastructure, water, electricity, transportation, environment, technological innovation and rebuilding from several disasters, most notably the May 12 earthquake.
Experts believe huge investment in infrastructure construction may drive up the demand for raw materials. Updating of power grids across the country, at a cost of 4 billion yuan, in particular, will boost copper consumption.
"If the market continue to deteriorate, we may go back to Anhui, but I hope we can pull through till the favorable turn comes," Mao said.
(China Daily December 10, 2008)
