welcome to a scrap life a podcast solely focus on the hustlers grinders operators and business owners who live and breed 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 we’re back bulls versus bears i felt like last month i i stood a chance um to uh present a pretty positive case to chad and this month um i i feel like it’s gonna be a it’s gonna be a tougher sale for me to get off this month but we’ll see what happens what’s going on chad oh man happy may happy birthday what was the stock market saying that they said sell in may and go away sell them may go away isn’t that like the saying for a long time it’s just everybody that waited until may to sell scrap you might have waited too long i i tried to trade stocks once the guy said uh you gotta turn your charts upside down you don’t know what you’re doing and i feel like that’s this year you know like i think if you look at

the historical as the last i don’t know 10 times we’ve had a bloodbath opening like this for a year yeah we typically come back some so could be a good chance to get some bargain deals right yeah i mean i always felt i mean i it always depends on your outlook right and like uh i always said i’m an optimist by nature um so i’m gonna try and find the the shiny part of the turd um most of the time and uh on this one it’s getting hard to find the shiny part but i feel like it’s it’s it’s it’s more i feel like this one’s definitely more china locked down driven than anything just because people are kind of i don’t know right now kind of questioning you know inflation and questioning you know the fed raising rates they’re you know logistics is is is a theme of not just last year but it looks like of this year and so there’s just a lot of question marks out there obviously russia ukraine that deal um and europe now getting more involved and there’s so many question marks i think people get nervous

and they go to cash and or they want to just you know have that level of comfort so i feel like that’s where we’re at right now yeah i feel like there’s like three major points in the may market one would just be like you said china and overall less consumption i mean when it comes to steel making china they’re the grill in the room compared to the us we’re nothing so when they when they turn the faucet off that turns a lot of other things off too yep and then the second one i feel like this month we seen the panic in march and now new trading routes are coming available russian village turkey those type things where buyers all across the world are starting to figure out the new world order the new the new routes yeah you know what kind of reminds me of like when uh china came out with green fence right it took a while for everybody to adjust okay so where am i gonna go with my sealed units where am i gonna go with you know this commodity or or that commodity and it kind of

took a while to figure out those trade routes right i mean you saw things kind of that were going here now they’re going here and and that that but that took a while to evolve and so i feel like just like you said um and and probably more particularly with you know the gas and oil situation than say scrap um i think there’s bigger fish to fry in the room than what the price of hms is doing for some of those guys you know they’re like trying to figure out how to get electricity and and eat you know um but it did they all play together yeah well i think that that’s the third component i would say is the big big uh as i see a big data point in may market is logistics yeah i feel like there’s a lot of scrap that tried to move in april right the key word is tried yes yes so i i wouldn’t be surprised if look i don’t think you can just turn a switch on and and all these ships can go different directions so i think that’s the world’s still going to

have to feel that out and i i can only imagine grain season comes what that’s going to be like all the new lanes that are established and how that really tries to work itself out yeah what’s the scary thing about it you know when you think about it is you know we live in a you know and i live in a scrap world right copper and iron and aluminum and you know some pgms but what makes me really kind of like you know take a step back and look is is you know with russia and ukraine being like you know the bread baskets or you know some of the bread baskets of the world is i think the food deal is going to become you know a huge component of this whole mess and you know i almost say we have a first world problem in trying to move scrap like you know it is what it is that’s what feeds our families it feeds a lot of people’s families but you know food is what really feeds your you know a lot of people’s families and i feel like that’s gonna you know

that’s something that’s going to have to be taken into consideration you start talking logistics and bulk freight and lanes and you know it’s going to be a component yeah it’s going to be it’s going to be interesting and absolutely there will be some less calories being consumed when all this shakes out that’ll be a scary thing so let’s move the conversation to scrap i feel like the market’s probably going to be up this month well eric you got you want a bullet point i found i found one right here look at this look at this consumer confidence man we went from 59 all the way up to 65 i mean we’re just arranging it out here yeah that was that that chart in the if it of itself is uh maybe we’re on that we’re on the ups on the upswing right i mean i don’t i think we’re still in the downtrend i don’t know did it break you would have thought that you know 2020 would have really killed some consumer confidence but i guess they were so quick with uh stimulus money that that that solved that riddle you know pretty

quickly but i was surprised month over month this one up by five six points i would you know what would be interesting if the rest of this month plays out the way today played i want to know what that number’s going to look like in the period of june it could be rough yeah well all right so let’s talk about some of the bearish points i feel like probably the first one we got to talk about is the old uh p e ratio right earnings and so we took a big drop 37 37.39 down to 32.53 that’s that’s no bueno but the the trend is is the trend is your friend in general yeah i mean i mean you think i mean ultimately like you said just like on the flip side of the uh the other on the other one you just showed this one i mean the trend is still technically intact yeah intact if it unless if it finds the bottom yeah then in the fear overall for your agree greed index you know this one’s a i feel like you gotta chart it to give the overall emotion

of the market and this one went from what was it 55 last month to 26. so a lot of scared people out there about the market overall in general well and rightfully so um you know the way that it’s treated you know the way that it opened up the year right um at least on the stock market side i mean on the on the commodity side it opened up fairly strongly i mean and we’ve had we had some really good runs um on the stock market side which i don’t dabble very much in it um it’s enough to be dangerous and that’s probably it um i could see where on that on that fear greed index where people could be running for the door which generally opens up opportunity for you know some good buys if you if you’re willing to extend your your uh your arm out there a little bit yeah it’s tough to call market tops and bottoms and yeah this would just be an opportunity if you wanted to say it’s you know definitely lower as the year turned it on so maybe we are getting close to the bottom

one uh one chart that that i got you know can you see this all right yeah i’m gonna move mom i’m gonna move out remove us there you go check out here big iron yeah so if you look at this chart we went from 1064 was the high in april yeah today today we’re at 9 33. so that’s 110 bucks 111 bucks we’ve lost quickly yeah but i mean we have lost quickly but i mean look at the look at the move from say that you know 21st of february to where even it sits today right right um i was talking to nick this morning and i said you have to keep in mind it’s like somebody that makes 15 an hour and then the next month you pay them 20 an hour and then the next month you pay them twenty dollars an hour and then the next month you move back to 15. like did they really lose anything or did you just get a couple months where you made some extra money yeah like if you didn’t adjust your lifestyle to 22 dollars an hour yeah and that’s the question right

yeah you go don’t buy what you know you get an extra 300 bucks a month and buy a camper or an atv right in this case you only went from 22 to 20. like you didn’t even go all the way back to 15. you know what i’m saying well i think that i i think the big iron market’s going to be tough because i think from what the earnings guys talked about both of sdi and nucor hinted that their their supply was secured you know sdi said through 2023 so if their supply secured that tells me a long-term agreement yeah so did they lock in that price did they lock in the spread like i would assume they locked in some sort of like some sort of spread not even just a price right so if that happens how many open market transactions are going to be outside of that and with that being the case how’s this how’s this index really going to move with the market when you take out two two of the bigger consumers so yeah that’s an interesting conversation probably something we’re going to watch play out because

i don’t think anybody’s going to give us that info no no so i won another chart that’s uh looking stellar is the steel m usm for it’s i feel like this is a big big impact so month over month we’re up 24 on steel imports so if you look at uh operating rates we’re fairly flat from last march or around march 5th or 80 percent april 2nd we’re at 79.3 percent so fairly flat but so why would there be less deal demand you know why is hot rolled down from what was this it’s you know why is this down why is why our lead times down is another one i can let’s see if i can find that chart you know lead times are down from six weeks to our you know it’s called six and a half weeks to four and a half weeks so there’s all things encompassing steel why are those and i think imports is a big big piece of that imports because the material coming in because it’s i mean you have to think you’re you’re at a roughly a 20-year high on a dollar compared to

the japanese yen and then you’ve got whatever the basket of currencies i mean we’re at a multiple multiple year high so you know when you have the strength of dollar like it is right now today um you know that’s going to drive import pricing right i mean does that thing keep running does it does the strength you know keep going and i think that’s the that’s a big component of this the scrap trade right now i mean take ukraine russia you know china all out of that i mean when the dollar is as strong as it is and you start talking about you know lanes of shipping and stuff kind of getting redirected i mean currency is a huge role in that yeah and and i feel like talking talking about the overall economy i always you ever heard of the expression dr copper oh yeah yeah so this is this one isn’t good for dr kaufman well and this one i mean to me has china written all over it right yeah so for the people that aren’t watching we’re looking at copper charts at 480 yeah highest fi 490 in march now

we’re at 4 28 this morning so yeah it was a it’s a this one is definitely makes you kind of blink twice right because that’s a big that’s a big drop in a hurry so i guess you can look at it two ways does it bounce here or does it just keep going and i feel like copper will kind of be it’s huge it’s always been somewhat of a telltale sign of what’s of what’s going on but i mean that’s a precipitous drop i mean you go you go from 480 to four you know i think it was like 426 when i got on this uh this meeting right now i was like here we go this is what i was telling you that my wife was calling me about the about the flag plug and i was like i got bigger pictures with that game i love it i mean so so i don’t pick on you but i think the trend broke on this one what do you think yeah it looks that looks like uh it not only broke but it like uh scrambled through yeah i screamed down in in

a in a negative way so well let’s look at another one that may be uh maybe hammer and steer what do you think of this one the 80 20 uh turkey consumer price so we’re at you know depending on the chart right some guys said it as high as 660 670 now they’re in that 555 570 range you know so either way they’re it’s down anywhere from 95 to 105 a ton and you know i i feel like the domestic the domestic mills um chased it up but i don’t think they chase it up as hard right i mean they because it’ll be interesting to see what the what the markets come out and basically what this what it trades at this month but i mean i i’d be hard-pressed to see you know them the domestic mills take that much out of it this month well i think that the exporters on the coast right i don’t know if they bought the top i don’t think they i i agree with your expression they didn’t the guys that are buying for these vessels did not move this full move yep so they

took some cream off the top and they’re going to probably take some some of the crap off the bottom you know but if they did it right you know they didn’t get you know they didn’t probably pick the average somewhere in there they’re probably going to be okay i’m i’m more interested in how do the domestic mills treat this because as you saw you know capacity and utilization is still decent you know as from on a percentage basis i feel like the demand is for today still there um depending on what those interest rates you know how hard they go um so i feel like as long as the demand is there if there’s anything i know about you steel mill guys or at least new steel guys is you do not like the price to drop so well i i mean the price of new steel don’t mind the price of scrap dropping you don’t like to see the price of new steel come off so you’re going to what’s up when new steel does drop though oh yeah it’s times three yep here comes the hammer that’s poor scrap guys exactly so

so i got a question for you you kind of walked right into it you said hey the exporters they didn’t go the full up right and so we can’t go full down i mean did guys across the scale in the us in general go all the way up and therefore when we when this market corrects our flow’s still going to remain i mean how how are your amounts how are your flows you know i i truly feel idaho or in the northwest where we’re at because it’s seasonality is definitely a component of what we do um as long as the pricing is decent right if we can pay two hundred dollars for a 200 a ton for iron generally speaking that’s always been like that sweet spot number like if you can still pay 200 and make some margin and get it out and and keep the lights on that number for whatever reason for as long as i’ve been doing it has always kind of been the okay we’ll move it right okay um so the flow i think as long as the market doesn’t just get crushed right then i think the

flows will stay decent we’re coming into spring i mean we’ve had a rough april weather-wise and i would say rough like cold not necessarily as much precipitation as we would like so we still we are we’re going to ride a pretty good drought over here unless something crazy happens but if we can get you know some good weather and maybe in may and the price stays relatively within reason i feel like the flows are probably going to be good which then makes me wonder like and you could you probably have some insight into this a lot of people sold a lot of scrap in april on paper but how many people actually got that delivered in april is what and what percentage of that actually you know got delivered yeah i think that’s that’s yeah and i think that’s a great question i think there’s a lot of mill buyers or steel mills that got in the office this morning and the first thing they did is print out a report that showed how many times were you effectively canceled like how many times did we actually get cancelled off yeah and so

because because i’m sure there’s a lot of shipping notices in the last late late of last week and so that’s why i said the logistics thing is important i feel like april was a stellar month i i think at least in the in the midwest flows were good the weather was decent meaning you need guys that had times what weren’t for sure to get them all out maybe they even sold extra so it’s just about how much can we possibly get out so they ever you know i think there was a rail car shortage around even more so last month so i think that’s a great question and i think if you i’ll uh i can show you a chart here that something new i added this is by the by the amm this is their forecast model and is what it is that you know the accuracy of it i don’t know yet but i think it’s it’s it’s telling where everybody’s psychology is that they’re thinking hey these steel mills are going to push it way down too much in may grab this huge correction down and then miss char would illustrate

that we bought them out after that and so to your point did people sell a lot of paper you know steel mills feel like okay there’s scrap everywhere they they take too much out of it and then these things start rebounding that’s what this chart would illustrate i mean i i personally have a hard time seeing a market change in 30 days but what do i know well we never we didn’t anticipate the the jump in uh the march that we were gonna get in april right i mean right that was okay that was almost like uh i almost felt like that was a gift like it wasn’t it wasn’t planned it wasn’t i mean if you predicted that then please come over i’m hiring you know like i’m trading you know i’ll take it i appreciate it but it it wasn’t in my forecast yeah so um if this actually comes back down and levels back out to those march levels february march levels i mean i still feel like you’re in a good position to to move scrap um and that’s that’s the way i’m that’s kind of the way i’m i’m

looking at it myself yeah so i i think we’re heading into heading into the summer scrap typically flows better in the summer time and like i said some some of the parts of the country we the weather wasn’t all that great um so midwest it was but other regions maybe not it’s like north i’m thinking north uh particularly so that that’s where it feels like even if paper was sold okay if guys buy this are selling it i guess what’s your game plan you buy sell what you’re going to get in i mean i think that’s always the target for most guys so that’s that’s a good place to be tomorrow you know what you’re going to get in but logistically can you move it like that goes back to you know that you know the one of your top three talking points as i like it yeah mystics right like right i could sell sprouts sit back here and sell to my until my my ear gets sweaty from talking on the phone you know but but ultimately it doesn’t do you any good if you can’t uh if you can’t move it

uh and you’re supposed to tell me in chat this whole cover thing’s going to be done with china in 30 days they’re going to turn the switch back on and things are going to rock it come on let’s be optimistic no no no and that’s what i’m saying like i’ll sell and sell and sell into the market because i ultimately do believe and i was talking to uh to a guy this morning and he’s like what do you think about this mess and i’m like oh i mean buckle up it’s gonna be it’s gonna be a good ride i said but i still i still feel like china china’s the driver right especially of copper for sure you know and on the pgm side palladium they’re a big driver of the palladium and pgms and if their economy is is rough if if china’s economy was just starting to get rough like this month then i’d say hey we gotta we got a way to ride this we gotta this thing’s gonna go farther but it’s been rough for long enough now that i feel that they’re gonna have to make it they’re gonna

have to pick a lane right either you ride this cobia thing another month or two or you eventually say okay turn on the print press like we got to out print the us right or out stimulate out something because they can’t it doesn’t do them any good in the long term to keep it this way in the short term i think they’re soaking up some cheap commodities prices in my opinion like okay they’re gonna buy i think they’re getting it down to where like they can make some good purchases if if the if the chinese broker stopped calling me if broker stopped calling me trying to buy scrap at these prices then i knew we got a problem but if my phone starts ringing harder and harder at these prices then it tells me there’s still demand they’re just trying somebody’s trying to take advantage of the price right and we’re really talking about two different buckets you got the fairest buck and the non-first bucket well you’re really good you’re talking about the non-first but i’m still saying yeah i’m but i’m saying that they do somewhat operate you know in

tandem to a certain extent right because if if the base metals on the non-ferrous side are just getting crushed nobody on the ferrous side is like let’s pay more for iron because you know like they’re looking at those like as as similar you know they may not be driving down the same lane but they’re on the same freeway right okay and that’s why i use those as judgments like going into the end of the month or the opening of the month because if the non-ferrous markets are strong and that that those deals are ripping that at some point if the ferris comes along with comes along with it for the ride maybe not to the extent to the extent on a percentage basis but to the extent on a you know directional like positive negative so that’s where i’m kind of used as kind of my rough gauge um but china you know they if you like you said they are the gorilla in the room when it comes to consuming consuming uh fair scrap right and and making steel so if they want to turn it on and say all right

let’s go then you know i’m i’m i’m i’m raising my hand saying i’m ready i’m ready to ship i feel like i feel like that this thing has some uh still has positive momentum maybe not today but the the optimistic the optimist in me says um don’t don’t count yourself out i like it well what do you i mean so you feel like flows are going to be i think scrap flows will be good this month um even if we take this big huge correction 100 yeah for us now i don’t know like i don’t run a shredder right so i can’t predict like a big shredder yard that that shreds fifty thousand sixty thousand ton a month what their flows are going to look like are they going to have people sitting on car bodies in 10 and saying no no no like we’re not going to you know no i went to your little bite you know hey those damn experts they didn’t go up all the way and they and we’re not going to go you know yeah i think i think it’s gonna balance out so in my in my

personal opinion the bull case is that if you wanna over correct it and you wanna drop that you wanna drop the crap out of it people have still had a good enough april and march that they’ll have enough money that they’ll say it i’ll wait i’ll get people on the upside right well and you feel in in may heading into the summer at whatever prices are going to be at you’re like yeah i want to hang on to it i want to be long in this market depends on logistics like for me right like and i can i can only speak for myself in this particular situation is logistically i moved up a lot of scrap in april right yeah but technically i can lay a ton of scrap on the ground and be just fine on the ferris side yeah you know um especially if you’re going to drop the price because now all of a sudden cash flow wise if you’re if you take a jag of the you take a jag of the the purchase price right off the top also you can lay down a lot of tons again at

cheap right and all you do is just average your way back into expensive scrap if you have to you know or you can go take the l and sell at you know a price for may and be like oh i just take my loss and then try and average your way down then but i would almost just say take your price down average your way back into it all of a sudden now you know if you’ve got good volumes coming into springtime get your price down and average your way into it if if that’s what you have to do um that’s why you make the big bucks man right there no no given the insight you people should hear that so that’s there’s definitely two different philosophies of doing how to attack a market like this and if you here’s the flip side if you bought or you held onto scrap and you’ve got a lot of scrap from the last two months and you ordered a bunch of rail cars and you couldn’t get trucks and you got a yard full of you better move some straps so i think that’s the question

i feel like product you know i feel like something grades like heavy milk for instance and like turning’s price fell more than than most so those grades were probably ill-liquid hence they the pricing were falling so i think the guy i think there’s probably people in certain parts of the country that have a lot of heavy melt have a lot of turnings so i think they they have no choice they have to try to keep moving it and like what you’re saying if you were successful and you were able to control your own destiny per se and get let’s just say you got your yard completely 100 clean well okay i see what you’re you’re saying is if the scraps don’t flow buy it right and so be it right but especially if you’ve had good if you’ve had good um cash flow months um proceeding to that right so like if you’ve had the ability i mean what are you gonna do if let’s say you’ve made good money in march and april you’re gonna go put in the bank like what the what are you gonna do with a bunch of

cash in the bank but if you can go buy 200 iron going into a potential you know cold war going into a potential china stimulating the economy going into you know where i mean what’s that what’s the dollar really going to be worth the dollar today is at a 20 like 20 year high multiple multiple year high over the over over all the other currencies so now you’re telling me that going putting your money in a bank at two percent return is going to make you more money than saying it i’m gonna put i’m gonna put two million dollars worth of iron on the ground at 200 bucks a ton and let the chips fall or they may like i’m not that smart of a guy like i really ain’t but i feel like like there’s some opportunity there well to balance that out i feel like interest rates i feel like most people are are bearish i i think you know there’s rumors of these interest rates rising i think the consumer confidence could drop at some point these construction projects have to like holy mackerel yeah that new house that new building

that new bridge that cost a lot and so i think something that happened uh-oh pessimistic then and then optimus about later in the year on an overall commodity pricing yeah we’ll see a time will uh time will tell and uh i don’t know i’m i’m i feel like this thing’s is is isn’t as bad as as what uh is what it seems today well not i think that’s the that’s the crucial point right there that most still steel mills will not understand is the the mindset of a person that owns a yard who has room who has some bucks what what are they going to do and so that’s what will make this trade that’s why that’s why the buyers the buyers are important right like i i feel like whoever the steel mill buyer is like it’s important for them to understand that each yard is built different right each seller is different and you can’t approach it like a blanket statement of we’re off x or we’re up x or we’re only going to take x from you and x i feel like if you truly are good at your job

then you truly know what each individual producer needs wants and like where that what their appetite is on a month by month basis right like and that’s what makes the the good traders good is that they they have a feel for their market right they know who’s got to move tons who didn’t get to move tons who you know what i mean like who’s going to be a consistent who’s not going to be consistent you know who’s going to produce the best scrap ever and who’s going to produce scrap right like like there’s you know what i’m saying like there’s just so many variables to the people that can do it good and if you’re just a quoter like then that’s all you are like i mean then that that job should be automated like you should have call into the 1 800 line and say what’s the price of hms today because i don’t know anything and all i’m doing is just quoting a price they’re exactly right that’s that’s the dynamics of the all the scrap metal world from industrial buying from the peddler the industrial account all the way to selling

to the steel mill so yeah that’s what makes this games fun it’s it’s it’s not no one case is the same for every guy that sold netflix at the top there’s eight guys that bought it all the way down right like average averaging like that stock doesn’t get sold unless somebody was willing to buy it yeah and that just goes you know what i’m saying like yeah for whatever reason you bought or whatever reason you sold you know depends on the individual or the trading house or the you know the firm but scraps the same way like you bought because you needed it or you bought because you thought the price is right and you sold because you thought the price is right or you sold because you needed it or whatever it is right yeah yep exactly same dynamic i love it all right man hey i do want to touch i was going to i was going to warn you but i do want to touch base and real quick and we’ll do a spec a podcast specifically about this but i’m super stoked about our uh our nft project but what

i’m more stoked about is the component of it um that you’re involved in which is the discord so we are in the process of setting up like a badass discord for our industry that’s you know that that basically touches um non-ferrous ferrous and it’s going to provide you know where we can basically help each other out and you know provide kind of general information about scrap equipment maintenance you know pri pricing as far as regionally what i mean or is it getting hammered is it i mean what does it look like and you’re a big component of that and i will do a spec uh a special podcast on it but i just kind of want to kind of let everybody know hey it’s coming we’re gonna have a a scrap discord that’s gonna be hopefully um pretty informative and pretty insightful as long as people are wanting to get on there and contribute so well brett you’re uh you’re leading our industry into the the new age i feel like this nft project in the community aspect will be will be exciting well you’re every part of that man like i said

like we’ve kind of built off the back end on the nft side and it’s going to be cool but the you know the bigger part of it is is you know the nft and and what what access it gives you and the information it gives you um is is the bigger thing that’s coming with it and so it’s and i think that’s that’s the best part of it you know and guys like yourself that are there that are vested in industry that have knowledge that understand what’s going on they understand the the tech side of it too so we got it’s a matter of just getting all the right people in the room and you know that they’re they can make it happen so that’s what we’re working on i’m excited it’s coming i love it all right bud we’ll talk all right thanks brad take care all right see ya bye