hey 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 eckhart all right bulls versus bears we’re back for the march edition finishing up february strong short month but uh happy this one’s on the books and done almost so sitting back here with uh chad eller brock once again the uh notorious bear with your host the notorious bull brat i noticed you were uh quick to talk about this meeting this month i tell you what you know one of those guys yeah when it’s not my favorite i’m like oh can we just drag that thing out but i feel like i got one i feel like i got one uh leaning more in my direction i’m like hey let’s get that on the books please so we can i love it all right so with this we’re going to switch up the format a little bit we’re just going to go through uh chad’s um information slide deck

that he puts puts together every month which is awesome it kind of gives you a beat on the the market and like i said before if you haven’t checked it out man it’s worth checking out um and chad will post the link in the comments you know when we post uh some of these videos just so you guys can go check it out best scrap ever um so there’s your there’s our plug for you chad i mean this is a paid paid program so i mean i’m getting paid a zillion dollars to do this oh yeah no well i feel like so the reason i created this content right is because when i was trading with a bigger group of traders to scrap my own traders i felt like you really could get pretty lazy right you just had so much information coming at you that you could just generically feel the trend right and then i went to a smaller trading group and then i realized like oh man like this is much harder i have to like really really work for my market opinion and then when i went on my own

uh being a male buyer on my own i realized like oh man it’s it’s 100 me right and so um every stage was a little bit of a learning experience about my approach to market and really you know i definitely don’t have it all figured out and i’m certainly there’s no 100 right in this game um but but what i do with this con with this content i said okay if i have to start from the macro right because you can be bullish or bearish about the the micro but you really have to understand the big global fundamentals before you can get down to the nitty-gritty and so if you look at these this slide deck as you start from the top we talk about the general you know s p 500 all the way down to like yields right of scrap so so i think that’s this is something that i was doing for years and years just on my own and i thought well if i could share it with others and they get the same resources the same information take away some different things that i do like i can

tell you my my market opinion but that’s that’s not really worth much but if i if we all talk about different fundamentals i feel like we all might come up with something a little bit different and uh and get a little smarter but at the end of the day it still goes back to like the old saying like your scrap is only worth what somebody’s willing to pay for it so like some guy in bangladesh can tell you that’s worth a thousand dollars a ton but if you can’t get to bangladesh or the local guy is only going to pay you 300 it’s like your scraps worth 300 like that’s or it’s worth a thousand dollars if you can get it to bangladesh i mean i think that’s you know that’s the biggest thing that people have to understand and you know and all joking aside like you’re not paying me any money to plug you like i mean but there’s guys like yourself out there that are creating information that’s like worth listening to so you know i enjoy doing this podcast to you so i’m more just plugging you because i think

that the information’s worth taking a look at if you’re either selling or buying or whatever then it’s then there’s something there probably for everybody to at least that could at least give them an idea if you don’t already know the information provided already so let’s get this party started and uh let’s let’s both make our see if we can make our case all right here we go so here’s the mark monthly market update so i mean i think we gotta start from the top as the on the macro approach the dow jones national average you know i feel like february is a big month we broke the that red line is a 200 day moving average you know when that that gets broken that’s never a good sign as you see right when we broke it we fell a lot we’re still under it but and it feels like you know the the downtrend is still intact so hopefully hopefully earnings this week changes that but that’s where we’re at right now i feel like you’re that that to me makes sense i don’t see any reason for the for the market to rip

higher um which as a bullish case for commodities usually as people cycle out of um you know tech stocks they start cycling out of the stock market in general they they’re usually looking for a home for their money which from a bullish standpoint could point uh to a more positive trending commodities market in general not just ferrous crap obviously but commodities in general i like it and then when you’re talking when i think about the the stock market i also gotta think about you know private earning your ratios right so the average in the past i think you know 800 years is around 1415 p e ratio peaked at 37.38 you know now we’re back down in that 35 36 range so i think it’s always a good uh good chart to to take in to know we’re really the value of the market at once again it feels like there’s more downside potential than upside on that deal yeah for sure mindset so you know it’s really hard to gauge people’s spirit but you know this is a fear and greed index and i always think it’s you know as the great

warren buffett says you know buy in times of fear and sell in times of of greed and and this is a one way to index that makes sense consumer confidence i mean think about this this is just a great bearish point you know look at this it’s just straight down 2022 people are just singing the consumers confidence is the lowest it’s been in what three four five years i mean brett come on just look at this chart yeah that one doesn’t do me any uh no one doesn’t do me any favors but that one looks and i don’t blame them like there’s a lot of fear out there there’s a lot of you know fear of the unknown i mean we just went through you know you see what happened in 2020 everybody’s kind of um you know chipping along but i also feel like we could be putting in a good bottom as well so maybe we looking uh maybe we’re looking at to the upside next couple months yeah i feel like this is always a good gauge in that yeah i think uh americans predominantly have a short-term memory you

know when when times are good they’re gonna be good forever when times are bad they’re gonna be bad forever you know especially with the global impacts going on right now i definitely can see that goes back to what you just said about warren buffett like if there’s ever a time to be greedy it’s right now right when everybody’s running for the hills yeah exactly all right so this is another very bearish point i mean very well maybe bullish for for commodities but but bearish for the overall economy i feel like inflation is still still flying you know so i think i like this chart in particular is is this is by shadow stats and the blue line is how they judged inflation before when we went off the gold standard and the red line is kind of how the government they’ve changed the the standards of how they judge inflation adding and subtracting different things right right so you can see quite a lag but but if you if you follow how we what inflation was right when we got off the gold standard you know 19 late 80s 1980 right we had we’re

at over 15 inflation right now so that’s that’s insane to me so on this deal i mean the only the only bearish point about it is if if it’s bullish for commodities in general because i feel like there’s room to come up the only bearish point to be made could be that that they’re gonna jack interest rate to try and tame inflation which then becomes bearish for commodities versus maybe the commodities prices just haven’t caught up to the inflation that’s going on yeah and i also feel like the average i think uh one of the major uh employers put out the average wage of wage growth in 2021 was like right around four and a half four point six percent so you think about the average consumer the average employee today has less bowing power today than they did a year ago you know so they might be making more but they can’t quite buy as much no and no free no stimulus money coming down the pipeline anytime soon yeah exactly so here’s the united states purchasing a manager’s index pmi so i always feel like this is you know how much stuff

is being made uh and purchased in the in the us i like it which is which is bullish it feels like you know there’s still which is probably why the steel mills are running out of still a fairly uh strong clip right now right yeah absolutely this is uh i i kind of want to skip over this chart it’s 100 i mean and today you saw it i mean it brushed up against 100 last week and then uh it’s going to it’s going to run right through 100. yeah we’re looking at the oil crude uh futures i feel you know we were at i think around i think we’re seven percent up month over month i think we’re around 88 something like that to 95. like it will probably get over 100 pretty easy here and if we get like the octg market um come in strong on the steel side they’re going to soak up a lot of scrap yep i feel like this uh your next chart is the iron ore you know i feel like this is kind of a push a month over month here it went up came right

back where it was yeah pig iron that’s another char you know the bear in me just wants to skip right over it so you’re saying you’re drinking are you saying we got a chance you know so you’re telling me yeah there’s not a i mean there’s three different indexes on on big iron and all three had different kind of wildly different numbers uh today so i kind of went with the middle one right so but the chart still looks the same right it’s pointed out pointed in the right the number the final number can always be different but if the choice the chart points in a certain direction that you know right yeah yeah so if this is the davis index shout out to sean but uh you know he had uh this is up 59 622 today so that’s a big i trust sean sean’s the most accurate yeah so we’re you’re talking about uh the purchasing index and steel output and and this you know as you can see this is what’s kind of surprising to me you know you got lead times continuing to fall and and when you look at

uh utilization rates you know at the late january we’re 81.6 and you know we’re at 80.1 so almost pretty close to the same yeah it’s uh well you look at it like a year ago to date right i mean obviously it feels like that was where everybody’s kind of climbing out of cove it a little bit and it was starting to pick up and if you know sitting sitting today you know i feel like anything what they said anything over 80 is pretty strong and and you would know better than i but i mean what is a good when people say okay what’s a strong mill utilization rate i mean what is that number historically to be like yeah there’s there’s strength there well i feel like it’s all like smoking mirrors because uh with with the when you look at this deal output number 80 like right like sdi new core on the earnings calls all last year like yeah we’re at 100 you know 90 some percent 100 you know over competition 100 it’s like how are we at 80 you know so i i don’t know i think when

they took some of the integrated offline but are still somehow in this index so i i can’t even say i understand for sure and i still if anybody out there does know can’t explain this to me please please read basically how they determine what the utilization rate is yeah yep so yeah i feel like i mean when you think about a year over year you know 70 77 versus 81 so far uh that’s that’s pretty good yeah but i do think it’s worth mentioning here uh you know all the all the areas territorial-wise are pretty flat except two uh if you look at the midwest you know it’s it’s it’s down right and it’s tracking downward you look at the south uh the southern markets it’s tracking up almost replacing those tons so you can kind of feel who makes what in certain regions it’s that that’s that’s interesting right well it goes back to the oil chart right like on the southern side i mean obviously there’s a lot of octg stuff done down there i would assume um and if that market is stronger or no well i think the southern

market’s going to be mostly hot roll right you got the new gorgeous guys uh in the midwest you got pl you got so you got some hot roll big also got plate and some other things so i just feel like if it to me this this biggest point here is like the southern market would indicate that it’s going to be hotter than the midwest market okay that makes sense so that make that that makes a lot more sense you say that so this what do you think about this shot hey you know the the corrugated steel pipe buyer of me likes to see this the only thing i don’t like is that that dip back up but you know it came back up it bounced off a thousand you know um but when i see this chart i’m like it gives me a little more negotiating power on the other side when i’m trying to buy new steel yeah so i mean this is the million dollar question i mean it really the whole your whole thought process comes down to this one question brett okay you see this chart right hot roll we’re

looking at hot roll chart it’s it was you know close to 18.50 got down to a thousand bounces now we’re at a thousand sixty i mean is this a dead cat balance or is this like nope let’s load the warehouse full pipe because this is the bottom of steel i feel like that it could you could see a good leveling out in my opinion i feel like the the that price got too high compared to the scrap price right i feel like ultimately if we ran this chart back further you will see that big hump i mean it shot straight up dang near right yeah from say last september or last august or something like that i mean it ran it ran hard and so i feel like we’re just taking that hump out of the camel’s back so i would i would anticipate if if it does go a little bit lower maybe but i would anticipate it flattening out from here but my my gut says don’t load the truck on inventory because i feel like you need to see some consistency move either move farther down or start to move

farther up before you really put push the buy button you know there’s a great lesson in there but you know it’s a one it is an ism i would call it you know the trend is your friend right and i think that’s what brett’s saying is right now there’s a strong downward trend and so until that trend changes he’s not gonna load the boat or take a big position no i’ve just been telling my guys honestly like hey like let’s just see where this thing goes like let’s buy what you need take care of your customers have a little extra but don’t get crazy because if it does continue down then there’s going to be room to try and pick a bottom i i don’t know that you really can but you can do your best well i think we should just stop there you said a bear case i think that’s good i think we’re done keep going keep going all right yeah u.s steel imports so i feel like month over month pretty flat you know and so obviously it’s higher year over year and these continue i mean uh so

i feel like it’s kind of a mute point here for the month of march yep all right hot roll uh futures market right so we got midwest on the left and the european pricing on the right you know i think these have been down you know the trend has been down for for a while you know we’re actually seeing uh you know we’re at march 1060 may june or a little bit higher not by much 30 40 bucks but i feel like that’s that’s interesting that today if you wanted to you could you could hedge some of your inventory you know yeah i mean that that kind of goes to show you that nobody’s really anticipating any big swing from here right i mean it feels like everybody’s kind of like we might be we might be there we might be at the bottom or close to it right yeah i would say there’s not a lot of conviction either way i think people are nervous on both sides you know yeah all right so this is another bearish bearish case here so i always feel like you know that that black line is

the one i pay attention to the most it’s the hot roll in the midwest and that’s still under that four week mark you know right around you know what probably three weeks ish uh this is by argus this is a great great chart here i mean i feel like that’s pretty bearish but uh we’ll find out yeah i agree that that isn’t that doesn’t help my cause um but then again it could also just be that they’re getting you know it was historically long lead times there for a while as well right and i was like and i don’t know what this i don’t know what that lead time looks like in a truly balanced market if you if you ever got to a balanced market is that a traditional six week four week like what does that you know cycle time usually look like in a normal balanced market yeah not and i’m not saying i’m right but i always i always felt like if it’s over six weeks like hang on like you ain’t gonna be able to buy any scrap but you know yeah it’s gonna get high yeah exactly so

this is more your game copper chart what do you think i feel like i mean i kicked myself in the butt because i had a chance to sell some chops at like 460 something and i didn’t and i was like oh this thing looks like it’s going it’s going to keep going and so now i’m at four you know i think today was around 4 50. um and i’m like god lee um so i anticipated to go higher because i feel like there’s if we get some decent economic news it’s going to be a squeeze because you’re reading you’re seeing that the the comex inventory levels are crushed there’s no inventory lm either i mean you hear what they’re talking about there is no the availability the tightness of that market which is why you’re getting these huge swings is because the market is so tight so i mean yeah you could you could slam back down to 430 looks i feel like just as easy it can go to 460 470 so it feels pretty volatile around here i think this could go either way at one time i did take a course

on technical analysis and when i look at this chart i see like it’s just stuck in a range it’s range bound right between that you know 460 430 just up and down up and down yeah i agree and i agree i feel like i’ve like that’s why i was like i passed on maybe that those 460s because i was like well maybe they’ve got some more upside or maybe i got a chance to get it back now we’ll see who knows you might uh might get back for sure i might go to 4 30 and be like we can’t win them all all right so i feel like this is a really important chart this is zorba and the reason i feel like it’s so important is because when you’re when you’re in the shredding business right the uh the steel margin the back to back business and the steel is one thing but but uh your pennies are really made on the uh the zero in the copper you know so zorba’s really taking off here i think it’s up eight cents a month or a month to 79 cents it’s a big

jump i feel like the shredders are licking their chops right now right um i mean that’s a that’s a hellacious run say from february you know beginning of february to the end of february because those pretty those guys pretty much lock in there their pricing right at the beginning of the month yeah and they might give you a little bit of juice you know if just to get tons but i mean the guys are you know shredding it for you to get that kind of run on tons you locked in you know at the at the beginning of the month and and then also the ferris price has went up since yeah unless you had just committed all those tons already you’re going to get both sides of it now unless you sold and you didn’t have the times come in which i think flows yeah we had a lot of weather weather so that’s i mean i’ll stick up for the bull for there but i feel like march is going to be a big month so that’s going to be whatever you got to sell all right nickel i mean what’s your

stainless file looking like dude i’ve been whittling away whittling away at it i i got a couple loads off here last couple days i’m at a pretty dang good price in my eyes um we were talking about this morning nick snyder and i were talking about he was like man no nickel at 11 11 30 11 50. i’m like dude give me a nickel at 22 24 like in like oh 607 i’m like it is game on two dollar stainless 2.304 stainless and like that’s when it starts to get crazy but i’m not complaining i mean you know you’re seeing good good stainless pricing and obviously the whole deal with russia and ukraine i mean with russia being such a big nickel producer i mean this chart has a lot of room to run if you know in my opinion well i always from a melting perspective i’m always like to see this this nickel chart a little higher because i hate when guys mix in their uh stainless some of their their ferrous right on the shred feed side and from the little guys perspective that’s what they do right yeah i

like it won’t be doing that now because there’s enough there’s enough marks in there they’re like all right separate that out yeah exactly you could pay for a nighttime gun pretty quickly if you start separating it out exactly all right so what what’s your uh what’s the shredder feed market the price you’ve been doing in your region you guys yeah they they were up a little bit last month and i think this month they’re gonna be we’re gonna get we’re gonna get some love um to what extent i don’t know yet it’s probably a little early but it feels like there’s a lot of uh you know because the west coast market you know you’re talking about the difference between the midwest and the west coast and in the south i mean the west coast markets are pretty strong because containerized scrap is fairly strong export export market is strong so that’s going to give us a little bit of uh plus we’ve been getting a fair amount of weather over here which has really impeded scrap flow yeah um i think a lot there’s a certain pockets of the country that have had

that so for from our standpoint it we’re gonna it’s gonna be in that month how much it depends on the direction but i feel like we’re gonna get some love do you feel like guys are are still shipping on their february orders do you feel like everybody finished them out and uh moving on to march i feel like people did what they had to do to get february complete but i but i don’t i feel like i feel like there’s some sales out there that people didn’t weren’t able to fill because of the you know we the weather on in our region especially the northwest we got kind of a rough february um compared to you know compared to what january and december really was for us they were pretty nice weather-wise didn’t really impede much for us february was a little rougher but going into march we usually things clear up and the sun comes out and it it becomes game on well i’m in the i’m in the rust belt in ohio right and it’s 50 degrees and sunny here so there’s just all kinds of scrap flowing in i can

just feel it yeah that’s good that’s yeah i bet i bet you it’s just it’s uh like florida almost yeah yeah uh-huh what’s that that old that old saying like don’t piss on my leg and tell me all right so i mean we got a little busheling price composite price you know we’re right around 500 bucks there and this is the amm i feel like you can see 2011 2012 we we brushed up against the 500 mark and and we started the other way again but i don’t know i can i could see i mean just from the chart perspective feels like there could be some resistance at that 500 mark yeah i don’t know enough about this this isn’t a product i deal with much i don’t i don’t really speak much to it because hey i don’t sell it i just i don’t see it you know we don’t have a big bushling market on this side of the world we know we’re two you know for the most part it’s export and then it’s you know rebar so you know they’re going to pay you like a bonus price yeah

all right so let’s move on to shredded pricing so just a good overall chart to see where we’re at you know i would argue this kind of same argument here it’s you know there’s always support and resistance i always feel like when you look to the left and look i don’t know if technical analysis will ever really take hold in the scrap world uh and i don’t i definitely don’t think it does now but it’s definitely worth at least seeing and say okay you know there it was i mean if you look in early 2001 we kind of stumbled right at that that resistance mark you know yeah chopped through so it’ll be interesting to see i mean it feels like we’re getting to those supportive levels from earlier 2000 feels like like going back to what you said the trend is is positive you know you might get a you know flat month or two but the trend is hopefully going you know that way and you said just technical analysis is great until russia invades ukraine all bets are off and you’re like how do i calculate that into the mix you

know yeah yeah exactly uh bush excuse me heavy melt it’s kind of a very similar chart yeah all right this is the one i don’t want to talk about you know let’s just should we just skip right over this yeah just keep the train moving this is the only one i have anything to stay on now this is a big one you know we are at uh i’m looking at this we’re at 40 bucks 5 25 this is argus’s data we’re looking at uh 80 20 you know heavy melt to turkey this is this is the only argument you have like a legit argument chad is the freight cost of winner sure that’s the only legit argument the price of fuel has gone up yeah other than that like the rest of it i’m just going to call bs on you but i mean i’ve heard it kind of people say well you know the freight’s gone up too and that’s gonna you know impede on you know how much the market should be up and i’m like okay okay okay i think yeah i think if you look it hasn’t been interesting in

2022 or late 2021 that turkey verse kind of u.s pricing was was was one level and i feel like this just in the short-term history it’s been a different one but it’s probably just what you’re saying it’s probably effective of that freight well i feel like you know turkey i mean they’re primarily more known for rebar correct than they are like for for plate and stuff but i mean i feel like you know with depending on what happens in russian ukraine like turkey probably stands to benefit the most right i mean realistically yeah i feel i feel like you know you think about ukraine you think about russia i mean some of these guys have open heart furnaces yet uh and now they they’re they’re basically you know they’re they’re massive exporters of steel and also they’re just they’re not consumers really so now they’re they’re not exporting or they can’t export right in russia’s case so who’s if you’re a steel customer where are you going to get we’re going to get that consumer where are you going to get that today we’re going to the middle east right which is

turkey exactly this is a shanghai steel rebar i always like to keep this just on the radar just to know kind of what’s what’s going on over in asia on the steel side pretty flat not not really much to say mother a month that uh turkey rebar scrap spreads i always like to keep this in mind to say like okay how much at what point you mean are these guys able to make a buck right now and i think you know the charge been consolidated for a while between that 210 to 250 mark uh margin i think we’re still in that range so i would say yes uh the scrap metal indicative curve you know so the futures in the bushling market has been one i’ve been personally keeping a lot of attention to i think it’s kind of fascinating uh it’s really changed here uh it was it really changed here every month over a month you know it whips all pretty good on the on the higher side so i’ve you know as much as i hate to say it um and then this is the last one here all the way

all the way down to the yield factors right and so these numbers are generic it’s the amm uh chicago right and these yields are generic you talk to 10 different furnaces they’re going to give you 10 different yields but i always think it’s a good good idea to look at this chart and say okay where’s the value at right and so if stimulus are really slow they’re gonna their melters are really talk about least cost charge right and you can see turnings is like the deal deals on yields you know heavy metal another deal of deals but right now you know when these guys are running pretty good it’s like how much pig how much bushling how much shredded can i get and and i think you know what this chart screams at me right now in the current conditions is geez big iron sugar is expensive exactly and i mean and and obviously going back to ukraine and russia big pig iron exporters right um you know that that’s you know that doesn’t help that cause i don’t think either and so i think scrap you know i think over time scraps starting

to be looked upon more favorably from an environmental standpoint and whatnot so you know i feel as long as the the price of new steel holds up decently then you know those middle four items bushling five foot p s hms and shredded and machine shop turning should all hold up pretty well yeah so we’ve we’ve covered our bases you know uh i feel like we went from the macro to the micro pretty well if anybody wants things i should add anything i would certainly do that you can just reach out to me on my linkedin page uh best scrap ever or chat dela rack on linkedin or send me an email at chathelbrec gmail.com i love it man i love it well thanks for making my case for me i didn’t have to do much well we’ll see you never know like you said it’s so regional it depends on what the steel mills that you’re selling to need how good were they stocking up on inventory ahead of time you know i see there’s a couple mills you know slave to be shut down this month right for maintenance yeah whatever um

so i think that’s plays a determining factor and who’s going to consume what but generally speaking i feel like there’s a little bit of green in the in the tunnel and from from a light standpoint moving forward into march so we’ll see how much and uh we’ll go from there well hey i appreciate your time today it’s been fun always chad take care man thank you all right bye