welcome to a scrap life a podcast solely focus on the hustlers Grinders operators and business owners who live and breathe the scrap metal industry every day we are the original recyclers no suits required just guts and hard work here is your host Brett eart all right guys I’ve been waiting for this moment for a while now I’ve got uh Chad just chomping at the bit here for the December 2023 Bulls versus Bears podcast he’s here to tell us Us in all the Christmas spirit how this feris Market in December should be up like a hundred bucks across all grades I don’t know like maybe he’s gonna rain on our parade but I got a feeling today it’s gonna be tough to rain on this parade so what’s up Chad welcome back man oh hey hey BR I’m so excited to be here today if you didn’t buy enough scrap in November you’re gonna be mad that you got to pay for the price in December so so I gotta give you a hard time and you throwing some shade at me on LinkedIn with that little guy dancing around talking about the summer

Market dude I run across the I don’t know like my algorithm must say send this guy the funniest ridiculous because I get some things that come across my Tik Tok feed that I’m like oh my goodness like I can’t help but create a scrap meme about it you know well I think it’s uh it’s very fitting and this I mean it’s just unbelievable to me how much the sediment has changed just in the last 60 days not only on this not only the scrap Market but the overall Market itself yeah I was looking through like for those of you guys that are you know uh aware we put out the Recycled 360 newsletter and Chad’s kind enough to include his Bulls versus Bears um kind of Market breakdown and I was reading through those points as um Marissa gets ready to put that newsletter out um and uh there’s not a lot of bearish points but it goes Bam Bam Bam Bam Bam bull bull bull bull bull and then like oil’s down and M lead times didn’t get past eight to nine weeks that’s it I was like oh yeah today’s gonna be

a good one well well yeah so and I will say so what’s interesting is you know being in the scrap markets for 12 13 years it it doesn’t matter like I’ve been doing this report for seven years and I really it’s because I’ve been buying really on my own vers like just real quick and I want to bring this point up because I think it’s super important for anybody out there that’s like how do we do this or how do we do that like literally you’ve been making that report that you put on the on the B on the recycle 360 and you you’ve been putting it out through the best scrap ever through Linkedin and your your website for you’ve been doing that for seven years like that’s a testament to to somebody that a knows what they’re talking about B puts the time and effort into it so like all joking aside I just when people say how do you do this or how do you do that I say go do it for seven years and then let’s let’s have the conversation you know so anyways go ahead sry Kos yeah

so I so I was doing this for uh the little clearity I was doing I was doing this report last seven years it’s not until the last couple that I actually started sharing it with people and then you know and then we started doing this podcast but but fundamentally like if you know nothing about the market if you didn’t talk to anybody because that’s really how information Travels by talking to others like you can gather a pretty good case of what the mark is going to do just just from these data points right and so it’s not everything but it it it sure is a great indicator and and the last couple days I’ve been uh working on something totally different and so I’ve been um you know over I’m I’m uh I got a full email inbox that’s for sure and so it it was it was interesting to do this super early this morning and and get through all these charts and really at the end of it I felt like yeah I got a I got a pretty good grasp on what I think the Market’s going to do and realistically

like this is information that we could probably like sell you know to people like hey I want the early Insight so when I’m going to go negotiate pricing with my Mill or what Mills around me but the like we’ve we’ve like you and I have always felt it important too for people to understand like we’re here to help guide not just you know steel mills or not just scrapyards but both right so an even playing field is is is available everybody can make the deal they nobody I we’re not going to tell you what to sell your scrap for I’m not going to tell you what to buy scrap for just saying here’s the market it’s a here’s the information it’s available if you know where to look and go make the best deal the best contract the best you know whatever you can make and but be educated and I think that’s that’s the point of this podcast it’s a point of what your the charts you put out and I’m hopeful that people understand understand you know our intent here is to you know create an educated audience that understands you know

what the market is and you you take the gambl you know you want to sit on scrap this month because you think January is better go get her done you know you want to sell because you feel like this the top get her done I’m not here to tell you what to do with your I’m just here to tell you here’s the information you’re here to tell us the information and let it rip from there so so let’s dive in so the first uh first chart I have is the Dow Jones Industrial Average you know I think the S&P 500 has done pretty good like pretty much all year right but but it feels like um the the top the top seven stocks have done really good this year yeah but the rest of the 493 stocks have not you know a lot of those 493 are the Dow Jones and so at least the ones related to Commodities and so it’s interesting to see that now those stocks are are starting to come alive and you can really see it in this chart um we we’re up like around close to 88.7%

month over month so that’s a that’s a big jump on a that’s wild yeah the market is ripping right now and for whatever reason this isn’t this isn’t a podcast to discuss why or what’s going to happen with the stock market next month but here’s the chart here’s what it looks like this should give you an indication you know usually I would don’t know if you’ve had if you include a chart of this is what the DOW market looks like this is what lead times the steel look like and then like overlap them or overlay overlay them but um generally speaking when people are positive about the financial markets that usually lends well to um Commodities markets not all the time but generally speaking Yeah and I think I just feel like the the dealer the scrap dealer uh the recycling facility they’re those their mindsets are really can have an impact on the market and I think it it’s not 100% correlation but it’s it’s pretty strong correlation between what are what’s what’s the stock market doing what’s the Dow Jones Industrial doing you know what industrial what are manufacturers doing are they

making a lot or a little right that’s kind of what Dow J is and then what’s it going to do in the future right and then this fear ingredient index kind of tells us like are people feeling fearful or greedy and you can see um we’re looking at chart the fear and greedy index was at like 25 now it’s close you know close to 70 so just just as far back part of that is do you think I mean do you think that part of that fear greed index is and and the positive momentum we’ve seen here um since October the beginning of October has to do with people feeling like the FED is going to slow down on rates or at some point maybe even go back to you know lowering them in the you know first quarter of next year or something like that do you feel like that plays a role on the fear greed index what I think people feel like inflation we have we’ve won inflation’s done it’s going nothing but down we’re all good and the reality is is are we or are we not you you shared

something on LinkedIn about Goldman Sachs thinking oil is GNA be 20% higher next year right like yeah or Commodities in general are going to be stronger next year that would not indicate deflation correct so yeah well I think and to in that in that article they also State like Goldman Sachs also thought 2023 was going to rip too and it was a kind of a dud so take that with a grain of salt please but I would have to think a company like Goldman Sachs is probably more often right than they are wrong just in 2023 they were wrong amongst other people right yeah and I think when you talk about Commodities inflation you really got to talk about oil for sure you when you have two Wars going on you’re the chance for volatility especially where a lot of oil is made or consumed like you got to expect volatility so which to that point too Chad I I pay attention to the vix right you know volatility index yeah and you being a Trader you understand that um in 2010 I did nine I did pretty well buying the Vic and uh

and then got on the flip side of that I got crushed like a year later buying the vix so um long story short that’s the volatility Index right it’s a measure of you know volatility in the market or perceived volatility it’s kind of a way to HED your bets I guess um against volatility and that thing has just been getting crushed lately yeah right yeah absolutely that’s and with two Wars going on for the volatility index to be getting crushed it seems seems kind of counterintuitive right yeah it makes you wonder if like the big Banks or hedge funds are actually getting short not long yeah yeah yeah exactly so anyway sorry sorry to cut you off I just yeah so no I think I think you know oil this is my my very big bearish indicator because everybody knows crude steel and scrap have 100% correlation and crude is down close to 9% month of month right yes yes I I mean and and if you listen to the BS they they talk about on CNN or whatever they’ll tell you that now it’s a good time to buy back all that strategic

oil Reserve that we that we flushed out of the system to keep inflation at Bay because we’re GNA be buying it at a discount yeah okay yeah see how this goes well so let’s let’s let’s turn uh turn the tables once again and let’s let’s bring up another bullo iron or yes iron or I feel like this is a great I think this is a great indication of what’s going on in in China and steel making you I think I don’t know leaped 10% 10.2% month over month R around 118 that’s it’s around 130 that not not not good for the Bears that’s for sure for everybody’s you know just to as a refresh course why is iron or um price important to the scrap Trader why is this an important chart for people to understand well so in the US you think about like what what’s the major product being made in the steel sector Hot Roll what what furnaces what kind of furnaces are making that you know eafs so scrap is going to be a big big raw material yeah in China it’s it’s not that’s not the case you

know so yeah they’re making a lot of hot roll but they’re doing with a blast furnace and so what what’s the two most dominant ingredients when you’re making for a blast furnace it’s it’s iron ore and cocon coal so you got to look at this one and say hey if there if prices are gr higher you know there must be more demand in the market so okay especially when it jumps 10% yeah in a month yeah yeah and I feel like you know trying to and I and this could be just a lot of with um China’s president was recently in the US was there just is this just a lot of hope hope hopefulness because iron or is a huge speculative market for a lot of the Chinese so that could be the case but uh we don’t know but but it’s a good indication of of the sediment of of what could be going on to be pushing through like March March highs right I mean that’s you’re if you’re looking at um you know an annual you know high in pricing coming into December that does like lead you to think

think that you know next year at least the first quarter of next year that there’s there’s some uh positive momentum building into the end of 203 going in 2024 yeah AB absolutely and so to to continue on this positive vot is uh let’s take a look at Hot Roll so hot roll we last month we were right around 870 a ton now we’re over this is the hot R Futures Market it’s at44 this morning so that’s that’s a 20% jump so pretty substantial and then like like you hinted earlier Le times are at nine weeks so that’s a if if you’re a steel mill or if you’re a scrap metal buyer at a steel mill and you have orders for nine weeks your job is to go bu scrap yeah I was reading uh I was reading an article on LinkedIn and they were talking about um you know the and it was correlating the lead time times for Hot Roll Mills against the price right and it was saying the last time the lead time was nine weeks the price was $2,000 roughly right like I don’t have the exact number but

it was significantly higher than it is today so that means two one of two things right either the price of coil has got to go up to start matching lead time because there’s demand there or the the other way the flip side right like there because something’s got to balance that that margin out that lead time versus price so does that does it in your opinion which way do you see that deal going well so if we look at lead time here here’s this the lead times chart the black line is is lead times in weeks okay so we’re like eight and a half weeks you know there’s been three times it’s hit hit nine weeks and the recent history and so what was what was hot rad pricing at that time in in May of 2023 the most recent is right around $1,300 in September 2021 is over is 21 over $2,100 so if you’re selling hot roll you say hey we got a pretty good deal h r lead times are getting close to nine weeks and we’re not we’re not close to that 13 or $2,100 per ton

you know yeah but what what I my beest point on this is every time it touches nine weeks in the last two examples it doesn’t stay there yeah it goes up quickly and it goes down hard and is that because more capacity comes into the market is that because people like oh nine weeks like there’s there’s demand there let’s go see if we can pick some of these deals off and and I I would assume that that’s that’s where you’re gonna go next but uh maybe not well this is where I love this is where I love the the real it’s it’s exciting to talk about lead times but then you also got to talk about utilization rates yeah right and so utilization rates aren’t anywhere close what they were in 2021 that’s where I was gonna go next and so yeah what do that what does that look like relatively speaking I just don’t think it it seems like we have I think everybody had the Playbook of be very cautious 2024 interest rat’s going to keep going higher there something’s going to break we just had a you know the second war

break account in the world and and I feel like a lot of Mills didn’t did maintenance a lot of Mills you know took took capacity out of the market and when you had that happen lead times shrunk and Lead times you know availability came less you had lean times grow and they grew very rapidly and so and with that price grew very rapidly and so it just feels like similar to the scrap Market feel as like we over we always overreact on on the way up and on the way down and so you know my it’ll be interesting I I think there’s there’s definitely not like a inverse relationship to what typically happens with lead times and and so it be interesting to see what how this all plays out here over the next 60 90 days yeah I I I think that that’s an important chart not just the I think the lead time and the utilization chart overlaid with each other and like people or at least understanding what that what that looks like and why those are important because just because lead times are long doesn’t necessarily mean there’s just an

overabundance of demand it could just be an under it could be an under supplied Market too you know which I feel like that’s where scrap comes in and that’s where you could have stronger scrap pricing and which is why we always discuss so what’s the flow look like right it’s not necessarily that you know it just could be an undersupplied scrap Market which is driving price maybe the the the steel like the the steel purchases the lead times aren’t really there but if there’s not enough scrap then you’re going to get a a stronger price increase just because it’s under supplied so it’s a very similar correlation on the the lead time and the utilization side all right well you know when you talk about scrap flows I’m going to tell you a secret you ready ah dude all right everybody push record save this clip let’s all right so let’s let’s take a gander at Zoro prices right so on the chart on the left you see aluminum and you could say month over month it’s it went up a little bit but it’s pretty much flat month over month okay look at

the chart on the right that’s Zoro prices it’s up from 71 cents to 75 cents according to Davis index so if aluminum pricing is flat and zor pricing is higher what is what does that mean to you Brett well there’s they there’s not enough zor to supply the market or there is um some real good aluminum demand which you’re not maybe on the export side because let’s be honest there’s a most I don’t know I’d be I would be curious to know the answer how much of our Zorba stays domestic right and now that these downstreams are able to sort these these sortation systems and they’ve cleaned them up I mean tremendously as far as like what their capabilities are so I think more is staying domestic every year on a percentage basis but that’s an that’s could be an export driven math too right well I think you would see aluminum pricing though go up in correlation so I I I tend to believe that more your your first point that if if the aluminum Market’s flat and we’re seeing zor prices go high then when you tell me you know hey the

scrap flow is no no buo I I tend to believe you there is some are you’re gonna believe me on this one yes like I don’t have to put my sales hat on as uh as firm I can just say dude I’m telling you we can’t buy any scrap it’s not out there but in I I genuinely think I mean you have to think it takes a while and I’ll make this point on this real quick is just like it took a while for inflation to be felt in our market after all the money printing right it takes a while for deflation to be felt when they stop printing or they raise interest rates it doesn’t just happen overnight that pain eventually comes it’s just it comes a little bit at a time just like on the inflation side right well the same thing goes with say car car generation on the recycling side Appliance generation recycling side is when everything is good people are replacing their cars replacing their appliances they’re getting it when you have a supply chain kind of like snafu like what we had um um with covid you know

people were forced to keep those appliances a little bit longer they were forced to keep those cars a little bit longer so you kind of got them into that mindset of you know okay I have to have to run this thing out so then you might have got a little blip once the supply chain started to kind of catch up well then you got high interest rates and you got you know maybe a tougher Financial environment where people are like you know I might just try and keep this old car a little bit longer and run this thing out might keep these liance a little bit longer and try and run them out you know which does create issues on the supply side you know scrap supply side on the absor a supply side and those things tend to take a little bit longer to work themselves through the system you don’t just feel that you know and so maybe there’s there’s you know I wouldn’t even say maybe I’d be willing to bet good money that there’s a there’s a there’s a that we it’s going to take us a while to till

people feel comfortably replacing those cars replacing those appliances for that to actually that supply side to to work you know to work in the scrap buyer’s favor yeah and I would uh I tend to agree and when you think about like it really comes down to back to sediment right and so I know I know you follow copper quite a bit and so Dr copper how how’s the market doing you know we’re up U 6% month over month from 365 a pound to 387 you know when you when you when you sell a load of chops at 365 and then the market hits 385 like I can’t help but not sell one right because I’m like oh that looks a lot better than 365 knowing that it could full well go to four pretty damn easily right yeah but there becomes a time where you’re like you know like some wise men once told me you know you can’t go broke taking a profit or something along Ong them lines and for all the mistakes I make when I try and hang on every once while I have to just listen to the wise

old man and try and take a little bit of profit and keep the train moving so I think my gut says we probably push we push back that $4 Mark here soon hey hey it’s your story you tell how you want BR I believe in you I don’t know anything about CER so I’ll leave all your all that comments to you I feel like that that $ four Mark if steel keeps pushing the way it’s pushing and nothing crazy happens like you know negatively economically wise I mean that I think that number pushes for pretty pretty easily again I need to make it bet with Nick it sounds like I mean see well that you know Copper’s great if the higher copper prices are it’s obviously great for scrapyard so I’m sure there’s a lot of a lot of happy folks hearing that so it helps man it helps it helps it helps the cause for sure all right I got my the the chart we typically finish with the last chart is the turkey 8020 heavy melt this uh this price is surged really it’s trending in the correct direction it’s not quite March

of 2022 but hey we’re uh we’re we’re working our way working our way up yes we’re up 10 and a half% we’re around 371 last month uh we’re already at 410 so considerable jump and I think it’s really an indication what what could happen here uh come January yeah it feels like if it’s a sentiment driven Market if people have been worried that this Market was going to implode or whatever and then they feel like oh okay maybe there’s maybe there is a quote unquote soft Landing that could happen or marginally soft Landing then maybe we can stop hiding underneath our rocks and uh go out and um you know try and you know keep our business moving you know it’s I I can’t wait to have this conversation a year from today after an crazy election year I mean it’s it’s it’s coming I don’t know like it’s it’s going to be a wild one for sure um I got a feeling and but I’ve heard it best and I want to leave you know are I want to leave the podcast with people you know this you know I I heard it

from somebody the other day and it makes makes sense to me but for guys like myself or people that have been doing it even longer than I have you’ve seen a lot of presidents come and go right um Republican presidents Democrat presidents and four years feels like a long time when you have to make a decision on who the president’s going to be but four years in the grand scheme of things you know is what it is right I’ve made money when Clinton was the president we made money when Bush was the president we made money when Obama was the president we made money when Trump was the president we made money when um Biden Uncle Joe was President not every year that they were president but within those periods if you just mind your business and the fact like mind it like take care of it do the right thing make good decisions listen to podcasts like this so we can give you the information you need to make a good trade like you shouldn’t be scared about what’s gonna happen in 2023 I just or 2024 I’m sorry I me you got

to go run your business you got to go make good business decisions like be educated understand go put your vote in and move on I mean it is what it is like the markets are what they are they’re Wars are going to happen crazy presidents are going to get elected and if you just stay positive and you just go out there and just kind of know what the market is like make the best decision you can make control your own house forget the White House control your own and you know don’t let the election year scare you go run your business well it reminds me like you know I’ve read a read an article one time that said some of the happiest people the reason they’re the Happ people because they they’re one they’re they they are consciously positive meaning they try to be positive and two is they they only focus on what they can control yeah so I I feel like you’re you’re nailing it there and I think that’s the biggest thing is like you can’t control all that crazy that’s going on at Twitter X the White House Israel Russia

China like I mean take care of your employees take care of your people take care of your finances take care of you know make your material scrap make good sales make good relationships and you and then you’ll last if you could do all those things you’ll last till the next president gets elected and next BS they try and cram down your throat like it is what it is like that’s the message it’s the and it’s easy to have that as a bull in this market feeling like we got a little we got we might get a little love so that’s the but I’ll let you sound it off I’ll let you you end it but I just want to say thank you for a good 2023 Chad has been awesome you always you make me smarter I appreciate you man and uh um I’ll let you close us out well if you’ve been if you’ve been following Brad and Linkedin you know he’s he has a lot of different Investments but Mo most importantly he’s got a lot of he Surs himself with a lot of good people so it’s been a been a

privileged to be a part of that world in your world in 2023 and all I got to say is there’s there’s been a lot of bullish points we talked about but but I knew it’s coming I’ll just say it it but but the tide always changes at some point and I can’t wait yeah so that day is coming so if you got scrap take a look at selling some scrap you know just make sure you negotiate the price right yeah I think this is going to be one of those markets where you know I would if you look at the Futures Market tell it tells you a lot of different stories so meaning High Futures are flat heading in the first quarter from today’s levels you know there’s a lot lot more upside on demand why why is that why is the Futures Market moving could I mean crap scrap could hold hold strong even in a $1,100 Hot Roll market right so I’m not saying scraps going go down but there’s just there seems to be some anomalies in the marketpl that we got to keep an eye on all right and

and we’ll be over here cheering that export Market so we can keep you domestic steel mills on us my friend have a great have a great month everybody appreciate you man we’ll uh we’ll talk again next month