Metal Monday November 15, 2021 with Nick Snyder and Brett Ekart.
Play the youtube video and follow along with the text below.
Nick Snyder:
All right. Welcome everybody, Metal Monday. We are already halfway through November, which is insane. And last week we saw some good movement in copper finally.
Brett Ekart:
Yeah.
Nick Snyder:
Saw some things go up. You saw some other things, you saw some of the PGMs move up. Talking to the [crosstalk 00:00:26].
Brett Ekart:
Inflation is good.
Nick Snyder:
Inflation can be good for mental markets.
Brett Ekart:
Inflation's good for the scrap business, at least for now.
Nick Snyder:
And that Evergrande made their payment.
Brett Ekart:
Yeah.
Nick Snyder:
Which was a big driver.
Brett Ekart:
How crazy is that, that we're over here in Idaho, we're trying to figure out what copper and aluminum we're going to do. And we're like, "Did Evergrande in China, make their property payment so at least this thing doesn't collapse on us?"
Nick Snyder:
Yeah. And it sounds to me, a lot of people don't even understand what making the payment exactly meant. Does it mean they actually started building some more units?
Brett Ekart:
No, it just means that they, just like any publicly traded company like that, they go out to investors and they get money and they do that. They finance those through bonds.
Nick Snyder:
Okay.
Brett Ekart:
They finance it through basically future payments on the interest. So the big issue with those guys is that they weren't generating enough equity or the price of property was coming down, or they weren't able to come up with the money through the next set of investors to pay the interest payment that was coming due to either retire that bond, retire that deal, or find another investor to basically take that over and pay the interest on top of it.
Nick Snyder:
Got it. That makes more sense.
Brett Ekart:
Yeah. That's the issue and who would've thought that that affects global markets the way it is, but people I think get worried right now and the markets are top heavy about that big black swan event that's going to crater everything that nobody sees coming.
Nick Snyder:
Yep. And we also saw platinum and palladium go on a little run. We saw palladium continue to be, we're north of 22 right now.
Brett Ekart:
Yeah.
Nick Snyder:
Which is great. Good sign. I know you posted on LinkedIn that the chips are finally starting to come in, which that's a big driver. That's going to help your rhodium number really go too.
Brett Ekart:
Yep.
Nick Snyder:
So it's just exciting to see things finally, I feel like they're trying to get on track, feel like there's some momentum on there where things are really going to take off. And like we've been saying for a few months, I really am confident we're going to really good strong end of the year and strong first quarter of 2022.
Brett Ekart:
I believe so. I think it's setting up that way. I think if the export ferrous markets hold out, I think you're going to see stronger pricing in December then even on the ferrous side than you did this month, depending on what region you're in. I also think that on the non ferrous side, the base metals, you're starting to see aluminum find its sweet spot. It ran up real hard there for a while, but now it's an around that 1.20 ish and some change. I think copper, it's bouncing around that four, between 4.44, 4.45 last week. So I think it's starting to find it's leveling out to, looking to maybe see some upside going into the end of the year. That's our opinion, my opinion for whatever it's worth. But as long as inflation is going to be on the table, whether it's 2% or 20%, I feel like you're in a good position to own some base metals and precious metals for that matter.
Nick Snyder:
Yeah. Yeah. We're in both of those games, so it's exciting to see things move in the right direction so we can continue to take care of all of our customers and take care of our guys here, to reward them when we have good movements.
Brett Ekart:
Absolutely. Yeah, it'll be interesting to see how next few weeks shake out in November. I know it's on our end, we got some big jobs lined out that we're start working on. So we're betting on the fact that the market's going to stay strong and we'll figure out either we're right or we're wrong, but it is not because the lack of trying.
Nick Snyder:
We'll know in two to three weeks, if we were right or wrong for at least December.
Brett Ekart:
Yep. No, I feel good about it. I feel good about where the market's at, so we'll just keep banging away.
Nick Snyder:
All right. We'll keep everybody posted. Thanks everybody.
Brett Ekart:
All right. Thanks. Have a great week.