welcome to a scrap life a podcast solely focused on the hustlers Grinders operators and business owners who live and breathe the scrap metal industry every day here is your host Brett eart all right Bulls versus Bears October 2024 we’re about five weeks away from you know the exciting of an election um I know who I want to win but we don’t have to talk about that I mean I’m an American Ling American flag hat wearing you know for all you guys out there it’s uh you know who I’m voting for we we won’t get into that um but that being said that’s not what we’re here to talk about we’re here to talk about scrap and that’s why I brought Chad ell Brock from the best scrap ever to break it down for us what’s going on man well there’s there’s no doubt that the the politics of uh whether it’s the tariffs or what’s going on with potential Wars all all these things can definitely affect the scrap market so it shall be an interesting uh you know whatever we got till till election day here on out it’s going to be an

interesting interesting Wild Ride for the next five six weeks I have no doubt and who knows what it’s going to bring but if last week was any indication of the Commodities Market it’s going to be I mean it’s crazy out there I mean I went from BET Nick Snider at 430 copper that we wouldn’t see five or we wouldn’t see 450 by October one day later we at 450 and I was like well that was a fast hundred to lose and then it just kept going I mean think we hit like just shy of 465 I was like well how about that it took us two days to get there so that being said I mean if copper is any indication if the strength of of uh what trying to China’s trying to pull off monetary policy-wise and you know um fiscal easing or whatever you want to say I mean that’s going on over there man I get that’s got to be part of the bull case this month I I heard shishi ping listen to our podcast and we are so bearish about China and all the negative things you know

steel being everywhere in the world that they said oh man if we’re if we’re having that kind of effect on those guys we we got to turn this thing around put a little stimulus yeah you hear that Argus I mean we’re pumping your charts we’re trying to let everybody know about you guys and we got the the Chinese are listening to this thing they’re they’re they’re trying to figure out you know what our opinion is so we could use a sponsor around this joint give us a call we’re open to discuss I got a I got nine bull points and walking one bear point today which means the market should be up like 50 right okay but we well I think it’s I think it’s uh well at least we got some positivity to to speak of so let’s get this party started yeah so I mean let let’s let’s start off theones points out of the way let’s go what’s that the bull point you the bear point out you go bull first well I I think we should we’ll we’ll go most we’ll mostly go go bull at first there’s only I

mean there we have to go mostly bull there’s only bullish starts all right let’s do this all right you got my chart can you see it yep all right so you know typically when they announc interest rates are going to be cut I think there’s like a 60 some per chance that there’s going to be a recession to follow in the next 12 months but we’re at alltime highs and we just had new all-time highs in D Jones Industrial Average in the month of September so I what’s what’s odd Brett is I’ve talked to a lot of different scrap dealers all different parts of the country that participate in all different sectors of the the the different industries from agriculture to Automotive to construction and retim I’ve heard my bushling accounts my industrial accounts are down 20 to 40% volume wise right volume wise yeah and so I’m looking at this chart the Dow Jones Industrial Average all alltime highs I’m looking at um the consumer confidence so that’s this one consumer confidence second Bull Point went from July of 66 to up to 70.1 in September I mean these charts are

saying like wow we’re things are lot pretty Rosy but I’m not sensing that when I actually talk to the trade where are you at yeah I mean I you know Mill cancellation orders right which is never bullish for scrap going into the next month because that means that they want to uh they want to cut you off before because they don’t know or they feel like it’s going to be down or shreders lowering prices you know before the month even starts if you if you hear me you know who you are we never used to have to worry about that but I guess we now have to do it because everybody’s scared of their own shadow um and so yeah that doesn’t that doesn’t bode well for a for a positive um trade going into the month but I also feel like if you’ve got some scrap and you’ve got some and you got quality scrap which we can talk about a little bit later then you I think have more leverage than you think you do and we’ll see if those the charts bear it out but I think that there’s a certain

amount of uh bullishness that maybe maybe doesn’t show up in October but could show up in November depending on some elections and depending on kind of what happens but if you just watch the charts and you just pay attention to what’s going on depending on uh um what steel mills do as far as outages and maintenance and if they come some of this stuff comes back online the volume’s not there to support you know pushing the prices lower so if there’s any you know even a meager demand I feel like you know there’s some there’s some some bullishness on in the future well let’s talk about Hot Roll pricing next and and I’ve picked on you for the last uh year or so about lower lows lower lows right September we had a higher high twice so or we had a higher high in August and then we have a higher higher in September so you can see that that trend is going a going a different direction now so yeah doesn’t mean it’s going to continue but it definitely is a change of direction if you look at the last you know last

year so as you look at the hot rad coil bushling spread and it as it climbs then essentially that’s telling people that the obviously the spread is widening which means that they’re either getting more for the for their hot roll than you’re getting for your scrap or or what what’s the other side of that coin well BR there’s always saying in the scrap world if the steel mills are making money the scrap guys are making money so let’s not count our checklist here well I just was saying like or I mean somebody’s making money and somebody ain’t right so just just saying just I’m I’m just out here for the little guy man you know the guy trying to get ahead in life but just want everybody to be well aware that somebody’s making money it just ain’t you well on the political side you know we had some some changes so we’ve always had the the 232 tariffs and it’s changed you know Canada Mexico had some lesser tariffs and and then recently I think three months ago there was a change to Mexico’s tariff and that it only applies to melon po

meaning if the steel before they were bringing China or bringing Chinese steel going through Mexico and then up to the states well about 90 days ago they implemented new law our new part of that tariff says melt and pour meaning it had to be melted and poured in that that country to come across the border and that’s had an impact that slowed down about 120 140,000 tons a month of Steel coming in from Mexico so so you can see this chart we’re looking at now is is Imports um us steel Imports have fallen you know they were as high as 25% in may now they’re now they’re close to 21% what is your position on that I mean just how obviously you work for a domestic Steel company you know manufacturing and amongst other things but I mean tariffs from a from a strategic standpoint make do they make sense does it I mean is it from a like from a from a growth standpoint if you limit the incoming you know products I mean yeah you may temporarily boost your your your local economy but does it at the end of the

day does it hamper you as a whole or do you feel like it’s what’s your opinion well I I probably have an unpopular opinion because the Chinese have subsidized their steel industry correct people say oh that’s bad you know we we should have terrorist but but if we’re honest in America we subsidize our agriculture um so our agriculture industry so whether it’s good or bad I think you could say hey we have certain tax breaks we we help the the farmers in our country and it’s no different than the Chinese help their steel producers they do it differently right being more of a communist country U but it’s it’s that kind of under that same tone so I think if we didn’t have tariffs I think there would be a lot less Steel in the United States without a doubt it’s just hard to compete um with a subsidized product well it goes back to what do you have an abundance of like what what can do you have an abundance of as a country that you have the ability to export at a cheaper rate than and in the Chinese economy or some

of these other economies they have they have a say lower environmental standards they have the ability to you know have lower wage standards or lower you know basically working standards so they have the ability to export a large volumes of say steel right we have an overabundance of agricultural products right I mean the US is very fertile soil we have you know very you know modern farming practices so it’s just so for everybody out there that likes to rip on you know the the incoming the steel Imports I mean just remember like it’s like the pot calling the kettle black like we’re doing the same thing just with other Commodities it’s still commodity it’s just it’s just a different game right so I mean that the and and I’m not arguing for or against it right like I’m Pro America I want to see America be strong I want to see us do what we do and I’m just always curious like to just get the somebody else’s input like hey what do you think about this or that yeah it’s a Val valid question and so we talked a little bit at the

beginning but China un you know unbelievable right so they this month they announced hey we are like we were so bearish on this last podcast about China just dumping steel all over and you know them going into a recession well they haven’t done a lot of stimulus they did a lot of lockdowns but not a lot of stimulus during Co where we did a lot of stimulus um obviously during in the United States during Co and and post and so this is their first real stimulous since since Co and literally overnight you’ve seen Ste rebar or this chart went from uh it’s up close to 9% um so unbelievable right um and we can we can keep rolling right into non-fair on the non-fair side we had copper go up uh 7.9% oh yeah it went from 416 to 449 so what do you think on these some of these non-f feris ones like like copper do you think this is sustainable or do you think this is just a blip man I mean it probably depends on the the faucet right the faucet the money faucet I mean if

basically they’re if they’re lowering the the short-term interest rate which allows traders to trade right with and carry less you know basically carry less cash to cover their to cover their margin like they’ve got I mean they’ve got the ability to turn that faucet on right now as much as they want to so as soon as I think that I’ve got it figured out then I’m like oh but I’ve been sitting there the same the same guy been pounding the drum of like when the Chinese want to like they can turn it on right it just feels like sometimes in when you’re either investing or talking about things you’re early to the to the party and I feels like maybe they finally as much as we’ve been talking about it you know weekly monthly that the Chinese when they’re ready to turn it on like watch out because they they can move the market in a big way and you’re watching what they’re doing and and and and to keep in mind that that this is you know a pretty big stimulus package for them this the biggest one since the 2008 you

know n financial crisis right is you go back go they have to go that far back to see something like this but this doesn’t really compare to that stimulus package that they put forth during that financial crisis so like if they really want to like basically like they can really turn it on and so for me to sit here and say like yeah this is you know this is the peak or this is where we’re at like I feel like all bets are off if if they decide that they want to really juice this thing so I mean you’re seeing what’s what’s possible I mean just in a very short amount of time and I still think like there’s more to come and if and if that’s true there is more to come then I feel like there’s more a volatility for sure but there’s there’s higher Highs coming well for me when I think back toir I see this chart and I think wow you know when when copper goes from five to $4 a pound in a very short amount of time you know 60 days the scrap vendor the scrap dealer

is not that doesn’t have a dollar margin when they’re buying you know number one copper right so they’re they’re they’re really when they gets when it goes down that much if you didn’t sell which we we all you’re not going to sell everything like it’s really hard to sell at $4 cuz you’re like you know you’re underwater there’s no lying about that but when we get a 50% jump the other way in a very short amount of time you know maybe maybe you’re back at break even right or maybe you bought some at that four and now you got maybe your overall position’s a little bit of profitable again so I think this gives the small dealer um the the guy that’s you know shipping 500 to th000 tons of shred feed a month this is a big deal and this might change their position to let let a half a load of copper go to give them some holding power on on the sh feed so no and and and that speaks to your experience in the market and it speaks to you know what you’re at least on how how the non-f

farest can affect the feris markets right and I think that your big players are going to move material that’s just what they do they got they got shredders they got big Capital Investments like they’re trying to shred to the ground they’re trying to you know sell into the same Market they’re buying in because you’re talking about you know thous thousands and thousands of tons right tens of thousands of tons you know the small guys the medium guys I mean you’re talking about a th 500 to a th000 to maybe 10,000 ton or whatever that is right like you know you think about say 10,000 ton at even let’s say 5,000 ton which is still a lot of material you know to move in a month for sure you know is even at 300 bucks a ton is 1.5 million milon I mean a couple loads of copper and you can sit you move a couple loads of copper off and you can sit on a lot of spare scrap you know you can your carry over the next month if you feel bullish on where this thing’s going it gives

you a little more staying power especially if you get a good jumping copper and you you’re able to kind of time it you know you didn’t have to time it perfect just time it half ass right and you’ve got a little bit of juice in it you know so yeah to your point like they do they do affect each other and I think that that’s going to be the you know the Telltale sign is you know the it I always feel like steel mills need both they need the the big guys because those are the guys that get them the majority of their tons but they need the small mediumsized guys because that’s how they’re going to average the price down and get it right you know and at least that’s my outside guy looking in opinion but you need both and if you if the if the small guy medium guys aren’t playing ball then you know and that that there’s definitely some and if and if the supply doesn’t ex isn’t there like they like it has been then there’s room for this thing to go up you know to that point

is you know as a more feris guy it’s hard to admit this but a half a load of a half a load of number one copper let’s just say it’s $4 a pound or like in this case 450 so 450 times 22,000 right that’s 100 Grand yeah where I buy a100 $100 worth of feris scrap you know at $100 a ton but I’m you know what you’re paying over the scale today in certain areas of the country times a thousand you know that’s 100 Grand and so and it feels like the smaller dealer typically feels more at ease having a th000 tons of shred feed on the ground than you know 22,000 pounds of number one copper so oh yeah that’s that’s why I think it the the non-fair is something you definitely have to pay attention to oh you just got to be yeah you definitely got to be on it you definitely got to you know it’s like it’s the same thing we talk about with feris is like you still have to make a good product you want to you want to make a good product that that

multiple people want to buy if you make HMS or you make shred you know your options are going to be very limited if you make good quality material you’re going to have you know multiple people that want to you know want to buy that scrap now whether they want to pay you the price that you want or not I guess that’s the uh that’s the other the other side of the coin but you definitely want more buyers at the table that’s how you’re going to get to squeeze the max value out of so yeah so let’s keep on the the non-fair train aluminum went that this is up 4.8% around 20 $2,500 a ton all the way up to $2,600 a ton what do you I mean I just feel like this is all this and and nickel which is the next slide which is up you know 3.3% I feel like all this is driven by China would you agree oh 100% I mean you had the fed’s cut rates right a week ago week and some change ago right they went down a half which I think

gave everybody else permission like the way I look at it was like it just was like the sign off like yep we’re going down like half we’re going to take it off and we probably more then everybody else like well it like if they’re GNA do that like either they see something that we don’t see or they’re basically saying yeah we you better you better do something because we need more money I don’t see any which then that I think that’s what I mean not that China needed permission but I think that they felt better about their decision once they saw the THS cut by a half and then they like yeah well we we better go yeah well I I did save my one one bear point for second to last and this is this is iron or so this one has got me a little perplexed in that iron or is down uh you know 5 six% month over month uh CFR China so I’m a little surprised that they I think there was some holidays and so I I get why it could go down but I’m I guess I’m a

little little perplexed that the traders of iron or aren’t aren’t positioning themselves to be in a little bit better position here yeah I don’t and I don’t know a lot about the trade of iron or so like i’ would be speaking like out of pocket um why this didn’t chase the market like everything else has but do you think that it has something to do with like iron orch trades are probably much larger trades than say you know your typical and I say larger in like like like on a transaction size versus say your other you know your rebar trade is and your copper trade I mean it’s multiple transactions that add up to you know a cumulative total versus say I think feel like iron ore is it’s probably really big trades that got to go through the system so you may not see that like real quick move I mean I don’t know I just I wonder if that doesn’t have something to do with it well I know there is there’s I know there it’s a very tradable market and there’s a lot of speculation done but but I don’t know

I don’t I don’t I’m not sure what’s driving that but I think it’s noteworthy on my be Point yeah yeah good good to bring up but if there is somebody out there that is really in tune with iron or that it’s listening by all means like if you’ve got some knowledge you want to drop on chat or myself like probably myself Chad prob knows but if you have some knowledge you want to drop on us please don’t hesitate to uh to send it our way and say hey this is kind of what we’re thinking this is why this has been slow to react or won’t react or whatever the case may be but this is the one point that I was reading I think in a Zero Hedge article they were saying be careful about this whole Chinese Commodities trade because they’re like if you’re paying attention you know to these short-term moves they said look at iron org it’s barely buged you know and so it was kind of one of those like you know the I don’t know just the what do they call it the um the canary and the

coal mine or the whatever like the the the anomaly that just be aware that this is still exists and it’s not moving and it’s a big chunk of of what should be moving on a deal like this I read a I I don’t know how how noteworthy it was or trusting it was it was a Zero Hedge article was like and it had China’s Futures just go straight up right right up to resistance and it was like all right now every trade is short again but they same thing they were talking about how every Chinese short was just getting his face ripped off like the largest short um covering margin covering since 20089 collapse right it was like you never see anything like that all right so I’m going to end up on a super super bullish Point here and this is this is the turkey heavy mail 8020 chart and so we’re we’re only up just one% 0.9% we were at 369 to 373 but I but I want to share what Argus had to say regarding this chart it said scrap exporters so they’re talking about the East Coast scrap exporters

remain bullish and look to be considerable price increase throughout throughout October which which is really good news yeah in addition to the Chinese recovery and increase in Turkey rebar prices around $50 a ton in the past five weeks there’s a strong contango in the lme two months futures of heavy mail 8020 contracts this and possibly of of further us interest rates Cuts later this year which we heard from pow today maybe not true yeah and with elections out of the way in December Sports a strong possibility of increase in physical SC scrapb trading prices so there you heard it first first folks we’ve got there might be a little juice in this thing but I I said what the old you can’t go broke taking a profit but I always say that you still got to make a profit you still you still got you still got to figure out how to get that done so it’s been it’s been a wild year I mean like I said we got we’re in the last quarter right this is like the last Sprint to the Finish Line um so it’s going to be and it’s

going to be a wild one I have no doubt you know this month and then next month ction month and the finish of the year you know December is usually just I’m wonder if people even work in December anymore half the time and uh it’s half of that thing is just you know gone um so you know here we go man let’s uh batting down bat batting down the hatches or Dam the Torpedoes because it’s going to be interesting no no doubt and so we we’ll see what what next month brings and with see if we have a little bit more volatility here over the next 30 days because it feels like we should uh if you’re a if you’re a scrap seller you know then I hope you enjoyed this podcast I hope that there’s something noteworthy you can take away don’t hesitate to reach out and tell us what’s going on in your area and uh if you’re a scrap buyer I I think you should be overpaying this month love it all right anything you want anything you got you want to end on Chad you’re good no I’m good I

appreciate you appreciate the time today it’s been great everybody has a great uh great trade this month take care see you in November

Summary

The latest episode of A Scrap Life Podcast, hosted by Brett Eart, focuses on the scrap metal industry amidst the turbulent financial and political climate of October 2024. Joined by Chad Ell Brock from “The Best Scrap Ever,” Brett dives into a comprehensive discussion on the state of the commodities market, emphasizing copper prices, tariffs, and global market influences, especially from China.

Brett opens the discussion by reflecting on the political atmosphere, as the U.S. heads towards an election in five weeks. Although he alludes to his own voting preferences, he quickly shifts the conversation back to scrap metal. “We’re here to talk about scrap,” Brett says, introducing Chad Ell Brock to break down the latest market movements.

Chad points out that global events, such as potential wars and tariffs, are playing significant roles in the current market. As they move through the conversation, the two discuss the fast changes in copper prices. Brett reflects on his prediction that copper would not reach $4.50 by October, only to see the price climb to just shy of $4.65 within days.

They attribute the rapid rise in copper prices, in part, to China’s monetary policies and fiscal easing. Brett humorously remarks that China’s leader, Xi Jinping, may have been influenced by their bearish stance on China from a previous podcast. He suggests that stimulus efforts by China were triggered by the recognition of the global impact of their previous bearish performance.

Chad continues by highlighting nine bullish points versus one bearish point, with Brett jesting that this should result in a 50% market increase. They review charts, particularly focusing on the Dow Jones Industrial Average, which reached all-time highs in September. However, despite these optimistic charts, Chad and Brett both note a disconnect with reality, as many scrap dealers across the country report a 20–40% drop in volume.

The conversation pivots to industrial cancellations by mills and a potential bullish turn, depending on what happens in the next few months. “If there’s even meager demand, there could be bullishness on the horizon,” Chad states, indicating that if steel mills return to full operation, prices may not continue to fall.

The duo then shifts their focus to hot-rolled coil pricing, a key indicator of market health. Brett has been pessimistic about this for the past year, but now, for the first time, he notes two consecutive months of higher highs. This trend suggests a positive direction, although they both acknowledge that nothing is guaranteed.

Chad also draws attention to the impact of recent changes in tariffs, specifically regarding Mexico’s “melt and pour” rule. This new rule has slowed down the import of steel from Mexico by as much as 120,000–140,000 tons per month, impacting the U.S. scrap market.

They also discuss the broader context of global trade and tariffs. Chad acknowledges that while some might view China’s subsidization of their steel industry negatively, it mirrors how the U.S. subsidizes its agriculture industry. This comparison highlights the complexity of the global market and the challenges of competition with countries that have different economic policies.

The conversation then returns to the topic of China, with Brett and Chad discussing the country’s stimulus efforts, which have significantly impacted steel and rebar prices. Copper prices also saw a significant jump of 7.9%, rising from $4.16 to $4.49 in a short period. Chad emphasizes that this is a key indicator of China’s ability to “move the market in a big way” when they decide to stimulate their economy.

The discussion wraps up with Brett and Chad covering the implications for smaller scrap dealers. For these dealers, a spike in copper prices could provide some much-needed breathing room. “If you got quality scrap,” Brett says, “you have more leverage than you think.”

Finally, Brett and Chad touch on the 4.8% rise in aluminum prices and a 3.3% rise in nickel, both of which they attribute to China’s stimulus. However, iron ore prices remain down by 5–6% month-over-month, which perplexes the two hosts, as it hasn’t followed the same upward trend as other commodities.

As they close the episode, Brett and Chad leave listeners with a bullish note. Scrap exporters on the East Coast remain optimistic, and the hosts anticipate possible price increases throughout October. “You heard it first, folks,” Brett concludes, “there might be a little juice in this thing.”

Brett wraps up with some final words of advice: “You can’t go broke taking a profit,” reminding listeners of the importance of timing their trades wisely.