all right everybody chad and i are back for another version of uh bulls versus bears we’re talking iron taco ferrous steel you whatever the nickname israeli term you want to call it we’re really just talking broad market um no no real area no real territory you know specifically other than just kind of broader terms like what does the the ferris market look like this month so what’s going on chad how was uh alan christmas treat yet it was excellent my friend how about yours you know i can’t complain man i’m back i was talking to you earlier i got i i got a little sick there for a while which is very rare for me but um i got pneumonia so i took a couple of slower days and i’m i’m back in the saddle and ready to uh to fight for the bowl case for this uh scrap market i love it i mean i got my red on i’m like tiger woods i think there’s going to be a lot of blood in the water so i hear man so i hear well walk me through it man tell me tell me

why everybody should be pre should be so scared of january well i feel like we got to start with the bullets because you know i’m a gentleman i’ll let you go first but but i do feel like there is a couple of charts on here that i did that i feel like you know talk about talk about the bull case so the first one is you know there’s always an additive about oil prices in conjunction with um with scrap prices so here we got crude oil jumped from 65 to 76 bucks a barrel what are you what are your thoughts on that you know i feel like um oil has got some room to run um it was up obviously today which we’re a little bit late for our bulls versus bears case i mean this chart a couple of days ago might have looked a little bit rougher which might have might have made the bear case a little bit stronger um but to start the week this week to start the month um generally speaking i i feel like there is room on the oil side just because you know hey it’s

a cool it’s kind of a we’re in a cooling period which i know is a different is it’s a different oil but i feel like um if travel begins to pick up when this weather kind of goes away and um and they keep shutting down all these oil wells i feel like there’s gonna be some room to run for crude yeah that’s you know i think that’s good it’s good to keep a lot of different commodities in perspective because you know if you just focus on one you can feel like you’re flying higher want to jump out of the building depending which way it’s going right right yeah so what about uh iron ore i mean i feel like that jump from i want to say around 93 bucks to 112 dollars might be a little higher lower today i don’t know but yeah i feel like that’s a good indication good sign that’s a little uglier that’s a little uglier for the bull case um you know as far as an overall picture but uh you know the last little run you know gives me some hope that uh you know i do

feel and we’ve had this conversation in previous uh um previous podcast that iron ore i think used to be a really strong reflection of you know the ferris market where as more uh blast furnaces go away the mini mills kind of come to fruition it may not be as strong as an indicator and then when they’re always an adjective you can take like iron ore times three or four and that’s going to be the future scrap price or there there was always something like that yeah but it’s funny all right you ready to talk about some bearish news or you got any other bullishness i mean whether i agree or not doesn’t matter but i want to hear your case all right so i feel like pickard right i feel like hot roll as we talked about last bulls versus bears finished steel can you can drop you can do whatever there’s plenty of margin there but if substitutes start dropping then that’s gonna give the af leverage to push down prime scrap right and so we did see this jump i don’t know it’s i have it dropping from like 568-ish to

548 so i mean that’s that’s a that’s a drop right and so i feel like it and more importantly it gives it gives uh gives the big bad steel mills the leverage right what do you what are your thoughts there i think there’s there’s some validity to that but i also feel you know i mean it just depends on i mean obviously we’re speaking as an overall perspective depends on the furnace depends on the steel mill you know what their what their demand you know what their demand is um on pig versus say hms all right well this this big bear i feel like mills have adjusted away from prime scrap um as just due to its being tightness in the automotive market so you know i think this is a bigger indicator today than it has historically been from so on on that note chad what do you what is your opinion um if the automotive really does pick up like you know they’re really anticipating i feel like even in his second quarter 22 and into the finish of the year what is that gonna do to this to this market if

if these if these automotive companies are able to really consume as much steel as i feel like there’s demand for new vehicles out there um what where do you anticipate this this on well i think that’s i mean that’s it’s like chicken versus the egg right yeah if you have if you have more auto production you should have more steel demand right well you should also have more scrap so both are true now which one comes first and what does that mean on scrap pricing i think you know how much is the automotive sector steel demand and then i think what you really got to talk about what we’ll get to is is imports right yeah like and so i can feed this point though to you that uh that this this one doesn’t help my cause yeah so i feel like so like so if we look at you know talk about steel demand so i mean if you look at imports i mean that line’s moving the wrong direction you know for for a bull yeah i think you’re seeing the those lead times uh we can talk about that what is

it on uh see if i can find that slide here how much of that while you’re looking for the slide how much of that has to do with the strength of the dollar in your opinion chad i mean as of lately i mean the dollar has really screamed which is screamed higher at least it felt like here recently and i think that’s kind of put some pressure on you know on on that import mark i mean pressure in a good way as far as being able to drag more imports in and at a you know a better price yeah i would say uh i used to think i could understand currencies and how things work and then i uh youtubed uh it’s a uh economist it’s called the milkshake theory you’ve sent it to me a while back okay it’s great and so it basically reversed my thinking always you know so it feels like there’s you know we print all this money our dollars should be getting weaker well so did everybody else and so it’s really about the big picture and you know i you know i’m just focused on little ferrous

scrap i can lose lose sight so i i really can’t get in tonight as others that’s for sure but here’s that chart the steel lead time so if you look at you know uh the the gray one there the lowest one that’s the imports lead times and so when you’re around three weeks lead time that’s going to push that’s going to push this market down anymore right and so i feel like we’ve been seeing this fall for the last couple you know as you can see for the last couple maybe 60 days or so and it was one of the things i was definitely keeping an eye on because i feel like that’s scary and and then in in hot roll you can see you know and these these are this is the futures market but you can see that they’re not going higher you know so it feels like that’s it’s not gonna not gonna help and uh the actual hot wheel chart this is this is an ugly one yeah well and i pay attention to these two just for our pipe company even though it’s mostly cold world material but they

kind of for the most part run in tandem um within a few bucks so this is definitely a chart that i watch lead times um just and this and this material just because i’m always curious like what the price of uh of our steel pipes should be doing um and it’s that chart i mean at the end of the day uh there’s there’s enough margin in that built into that deal you know we’ve discussed in the past that i feel like it’s it’s gonna come down to not to not to not to uh dodge that slide because that’s an ugly slide but it’s gonna still come down to availability of scrap and if the mills are willingness or or lack of willingness to give up margin on the way down um so that’s thanks for the ugly charts thanks for uh presenting uh your bearish case my friend yeah let’s let’s let’s keep it going the ugly charts i feel like this is the biggest one this is this is really the meat right yeah we’re thinking about january market what’s export do it and so turkey had a lot of big changes with

their currency which you alluded to earlier right and so we’ve seen a swift downward movement over the last 60 days here liquidity seems to be going away in the export market because of the because of this trend what are your thoughts here i’m looking for this movement to this right here that’s that’s my that’s my hope you see where my my area this is where this is going that i’m on october that’s my that’s my that’s what i’m hoping for i’m hoping that we get that kind of steady move down it doesn’t last it doesn’t last as long um and we get that ramp back up but yeah the slide is on it’s just a matter of um at what point does it does it hit the does it hit the brakes and and trend upwards and really that’s going to be just a matter of um is there going to be enough demand for new steel to uh to stop that especially on the rebar and over in turkey yeah all right so i mean i feel like you got to think about shred feed pricing because whether it’s i mean when we

see these bottoms it feels like this this the really what can stop it is is the guys that feeding the shredders just say no no more right yeah and so and what i mean historically i think we’re at uh pretty high price going shred shred feed you know uh what what are your thoughts there do you feel like i mean it’s shredder feed pricing if you compare it to new steel is still at a discount right but but shredder feed you know today i think what’s what’s buoying that market and what will continue to buoy it is gonna be the non-ferrous that’s coming out of the shred feed so i was talking to somebody uh the other day monday this wednesday so i was talking to him on monday and they were saying you know on the shred feed side obviously the ferris is the main driver but what can kind of keep that thing floating maybe a little higher than um than they would like to see it is if the zorba pricing strong the twitch you know the zurich depends on you know what they’re running but obviously the shredder is

going to want to try and keep as much margin as they can as well but i do feel like is if the if the base metals the base non-ferrous metals stay strong that’s going to help mitigate some of that drop um in my opinion but do i get i guess my thoughts are i feel like you know when i feel like shredders have the toughest in the business because when the market’s going up guys don’t ship when the market’s going down guys over shift right and they can’t really control a lot of that at times i mean to a certain degree they can control it but so i feel like if i’m a show today like i’m cutting my price hard and fast because i want to control my inbounds before this mark i don’t want to wake up in this market you know 60 days from now be worse and all of a sudden i’m like oh man i got some expensive inventory so if i could do that or do you think they’ll be like you know what there’s some good non-ferrous pricing out there let’s just get as much

as we can because we can make a buck tomorrow i think it kind of depends on their inventory position right now but i also think it depends on logistics because one of the things that that’s not just our industry but every industry out there that is very dependent on transportation logistics especially on full truck low quantity basis i think your ltl stuff some of that stuff that can be hauled by a van or a pickup truck is a little bit different but anything that’s semi truck full truck load quantities material everybody and their dog that i talk to is you know they’re having a tough time logistically now if you’re rail served you think you’re in a little better position because the rail seems to be kind of has worked through some of their inefficiencies and has been able to kind of has kind of actually made a little bit of more of a positive um on the on that on the transportation side but the trucking anything but anybody that’s not rail served which is where how most of your shredders are getting fed right most shredder yards are getting fed by trucks

yeah um just because it doesn’t make sense for most of the time to be stuffing tin bales car bodies whatever else in a in a gondola so um shredders that’s like an interesting dynamic i mean i i agree with you that if i owned a shredder i’d probably be trying to get ahead of it basically just to kind of hedge my bet a little bit because then i can always turn the price back up tomorrow where i think a steel mill they they turn down slower but then they turn up slower as well so there’s a little they try and take the peaks and valleys out of it a little bit more versus shredders it’s just boom boom boom you know they’re they have the ability to just you know tomorrow um like all right they can shut the flow down or kick it up but it’s but what the killer right now is is is freight and who can actually move the materials like take weather out of it which is just adds a whole nother um issue but if you you add you take weather out of it just even the trucking

component and moving your material is going to be it’s going to be tough this month i mean you’re bull you got to bring it up we’re only one bad storm from an up market right i know man i’m trying to stoke it as hard as i can i feel like this month i might be fighting a losing battle you know and i’m hearing people give calling me and saying hey what do you think it feels pretty weak out there i’m like no no no i don’t know what you’re talking about you know i mean i feel like i heard a lot of chatter about the first quarter it’s gonna be just crazy hot because we’ve got all these new mills coming on capacity more scrap demand yeah i think it’s hot now you know i was buying into it but uh i mean what a surprise you know what i’d say if i learned anything about 2020 in 2021 that good old saying of uh buy the rumor sell the news type of deal um it feels like that’s like that’s what this is right like the people buy the rumors sell the news

but the reality of it is maybe that flip that flip side will be true is that maybe we start the year week because nobody really knows going into a uh midterm election year and there’d be a lot of chatter about what’s what the micron you know covet virus or this or that and then maybe if we can just get this weather and some stuff to chill out a little bit we might we might uh this thing might gain some steam i like it i like hate that’s what a bull bull has to do right oh i mean if you’re if you’re a business owner man you got to be optimistic to a certain step just you start reading the news you’d be depressed but isn’t that the truth i mean this was this is awesome is there any other any other thoughts you got cooking i think you got i think you kind of nailed it i think as much as i’d love to tell you that uh i think i i got the upper hand i i think i’d be lying on this one just there’s a little bit more a few more

negative charts and positive ones but we’ll see about that yeah well either way man we’ll uh we’ll keep it moving we’ll see everybody uh next month and anybody’s got any any comments um or charts you’d like to see chad cole you know on the next go go check out his uh website and he’ll post the link in the comments to the podcast and go check it out and it’s worth a look thanks for your time brett all right man take care all right see ya