foreign 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 another uh bulls and bears i got my man chad with me today i’m excited about august i think the the future is looking bright um depending on how you look at it and depending on what kind of sunglasses you have on so um chad what’s up my man brad i mean this is a few months in a row now that you’ve had some great great videos of people you know cars going off mountains and people falling off slides i saw that one last night and i was like man i can’t pass this one up so i i think uh it feels pretty bearish in august is this gonna be five four or five months down you know what is it like it was may june july august may was down right june down july and now it’s four in a row thanks for reminding

me i’m gonna have to have to start selling snow cones here for too long if i can’t sell any scraps yeah so it’s i mean it’s been a wild ride and i feel like the overall market has reflected very similar tone it has it has it’s starting to get a little bit uh you know you can hear it in people’s uh voice like if they’re starting to get kind of nerves or getting pressed a little bit like man is this thing ever gonna but i mean it was high enough that as it comes down at least the pricing is still fairly reasonable depending on your your inventory levels but it’s definitely like okay when does the pain stop type of program you know yeah i think i’ve heard the last uh at least last 60 days nope scratch the bottom oh scrap spot yeah famous last words of every uh scrap um processor in this uh world is i think we’re at the bottom every time we get down online yeah this is the bottom and uh well it’s like investing in stocks right like if you’re out there trying to call tops and

bottoms yeah you know there’s not very few people in this world that can really do that you know on a consistent basis so yeah so i mean let’s just say the second half of july we’ve seen the stock market rip back and optimistic uh optimism about hey maybe maybe uh inflation the interest rates won’t go above that 0.75 which it didn’t and just feels like things are getting better uh you know the idea is that you know biden powell you know your your favorite president saying hey yeah we’re not in a recession this is this is just temporary what are your thoughts on that too tight when you hear what joe rogan said like if you pay attention to him he’s like stop trying to change the narrative like you’re trying to change like nuances of what’s the recession what’s not like what the metrics are you know to measure it and then like so that you can try and you know not get crushed in the midterms like sometimes you just gotta call spay to spay and i mean i i i’m in the camp that reset a recession or at least

a pullback isn’t a bad thing i’m actually in the camp of i’m okay with the pullback because if you just keep ripping higher every single week every single month i mean at a breakneck pace then that deal only ends in tears you know the higher you go the harder you fall so i’d rather take it back now a little bit then keep pushing this thing to to the rev limiter max and then just watch it just blow up i’d rather kind of solely take it apart than just blow the whole system up so yeah i’m not i’m i’m in the camp of not all recessions or battery sessions as long as they don’t last for two years you know so what what do you think how long this one gonna last oh i mean it’s it’s super politically driven right now right i feel like there’s you know um it’s so you know what you have midterm elections coming up in november right until november i mean it feels like 2022 if this thing drags out a little bit longer you might as well just write this this year you know um at least

you got some good months at the beginning of the year that hopefully balance out your uh situation but you know if a dr 22 drags on much longer you might as well just look forward to 23 to 20 23 so you know i don’t know maybe we could be looking at 2023 before we you know get get any breathing room um unless something wild happens um you know on the on foreign policy or something but yeah why i feel like uh you know to wear my to wear my bearish hat right i feel like a couple things i feel like anytime you have a country well i mean by byron and paul say hey we can’t go into we’re not going to run a recession the labor market’s too tight okay and my question is how many people are not a part of that survey anymore yeah how many people so that so somebody was dropped out of even yeah you know out of the payroll system in general yeah so that that scares me and then the second thing is is okay anytime over the last 500 years when we had a country

that has a lot of debt and is printing a lot of money you have stagflation and so if you have those two dynamics where the labor market maybe is kind of have as a false narrative and you have a lot of stagflation and like you said we haven’t had a recession i mean if you look back in time we there’s a systematic every so many years on average every session we’re twice overdue that so do we have a double reverse recession so i you know i’m i’m in the camp that i wouldn’t say i’m very smart in this stuff but i listen to pretty smart people and they feel like because we’ve we’ve printed printed way too much money just to avoid some of the the lower recessions in the past 14 years this could be a three to five year recession not an 18 to 24 month deal yeah and i think and i think it’s going to be recessionary in certain things and i think that there’s going to be um do you know certain certain certain business lines certain you know um industries they’re gonna feel it worse than others right

um just like anything so i think if you know i feel on the commodities end and whether you’re in base metals or grain you know there’s a certain amount of that that has to move right through the system so i feel like you’re definitely not inflation you’re not definitely not recession proof by any stretch of imagination um but if you’re truly gonna you know push towards this green narrative and green energy transition there’s a certain amount of what we do for a living on the this recycled scrap end that is kind of part of the this part of the program um so i think we see a benefit from let’s say there is a 18-month 24-month recession we see the benefit from probably a policy change of you know let’s infrastructure let’s put some more money in infrastructure because the once you started printing money and if you go back in history like you were just saying once you started printing money that train don’t stop you know i’m sorry like anybody that expects us to anybody that says do you know how long it’s going to take us to pay off

our debt i’m like we ain’t paying off no debt i don’t give a what anybody says that jet ship has sailed a long time ago so you know you can sit around and say well we’re 125 percent you know um that’s gdp right now like okay like you know how many people think about this i mean think about the people that have to go buy a 500 000 house today that make 60 70 grand a year right like what’s your what’s your personal debt to income ratio realistically like you know like that’s how you sit as a country like as long as you spend your money correctly which we don’t so that’s a whole other topic but yeah you know the debt to income ratio isn’t isn’t terrible um but if you just keep printing into oblivion and just keep driving to higher at some point you know people lose faith in your currency as a whole yeah there you go you have bulls versus bears got got one one guy said hey this could be a longer recession another guy said hey i think commodities we might be in this and look i

can’t argue against that if you’re in a stagnation environment that means commodities are going higher right and so yeah um traditionally like i look back and i say like let’s look into 08 for example right like the housing market really started correcting in 07 end of 07. i mean and 08 i mean commodities ripped higher for almost a year after the housing market was crumbling right eventually we’ve we took our pain and we had to take our medicine like everybody else right we still lasted longer than you know the economy as a whole but you know there was a lot of other you know i mean china was at that time was was moving along i mean there’s other there was other extenuating circumstances and i think every recession every downturn up turn whatever is you know is different so who knows what’s going who knows what’s coming but i know the price of scrap in august is not coming up all right so i’m going to share a couple of charts here i want to get your thoughts so we look at iron ore it’s down six percent month over month we’re around

114 now we’re at 107. so i feel like this is always a leading indicator of what may may be going on out there i mean it feels like um the overall steel market worldwide has still got some uh some pressure 100 and i think going back to china i mean if china doesn’t write their here soon i mean it’s on the ore side especially like china is a big consumer of iron ore i mean and if if their market is stumbling like it is right now then that’s a big deal and that that market i feel i could feel pressure significantly more pressure here soon yeah and so i mean what what how do we so we think about pig iron because maybe a bottom but it doesn’t feel it doesn’t feel like it maybe a dead cat even if it does bottom my gut says we’re gonna trickle around the bottom for a while so um i’m hopeful that i’m hopeful that that we get we will build a little momentum but it’s not feeling super positive out there yeah any uh any any thoughts on uh well let me let’s let’s let’s

go over to hot roll okay look at this chart what do you think i’ve been sending this to my pipe manufacturers for a while like the last couple days i’m like hey boys is that pipe coming down yet because it sure looks like it should be um so yeah this this one isn’t pretty this one is uh i mean what have you lost like over 50 percent from the peak right yeah yeah hot roll was down yeah just nine percent month over month i mean we’re basically half you know i mean and what’s crazy is i don’t know i was on a conference call for steel cru and that you know who knows that you know so right or not but he felt like 680 720 hot roll was in the cards and and by the way because all the additional capacity coming online still buyers aren’t going to be anxious to buy so this thing might not we’re not we’re not going to it’s not we’re going to get down to 680 and balance he thought 680 720 we stay in that range until q1 2023 yeah how about that rip higher though

like about july of 2020 right like yeah that thing just took off like a rocket ship yeah um you know it sure would feel good to get a little bit of a bounce but i think that we’re trending i think it’s trending down faster than it’s going to trend up so you know i don’t know that’s that’s the greatest news i’m i’m a pretty bullish individual but you know sometimes the the optics don’t lie yeah so here’s here’s another stereo steel reel bar a steel rebar in in shanghai i feel like is that a bottom or is that dead cat bounce we don’t know yeah that one that chart is a little bit better you know it looks i think it’s a little more positive just because it looks like you know there’s there’s potential upswing and and you know like i know i mean even on the scrap side still side i mean june july and august are generally speaking pretty tough markets not all the time but you know hopefully as we come into fall if we can see this thing push upwards and maybe you feel like the export market has

a chance which then maybe it’s got to be the bottom this has got to be the box this is the bottom back to the famous last words of any scrap dealer i think we’re at the bottom oh it’s funny nobody ever calls tops we just call bottoms so when we think about scrap i mean i feel like especially on the shred feed side zorb i mean the shredders of the world today copper dr copper i think that could be taking a dead cat bounce a senior four dollar prediction what i mean you’ve got to feel pretty good about that i guess huh i feel copper is kind of an anomaly and the reason i feel so strongly about copper is because of just the inventory right yeah i feel like inventory flow um the available you know the amount of inventory in the lme warehouse saying however i mean there’s just there’s just not a lot out there considering consumption and and what people are predicting is going to be um you know a very copper-centric you know infrastructure build in the next say one to ten years and i don’t know where

the copper is going to come from and in my prediction you know of four dollars in the you know the next five weeks might be a little bit um aggressive but generally speaking like i i think copper is gonna is is honest is on its way back up and then and they in traders i mean man they took advantage they took that all the way down to you know below 320 yeah and you know it is what it is but i feel like i don’t know that this is necessarily a dead cat balance as much as i feel like four dollars i think 350 to 4 should be the new range for copper you know even if we do get um a down draft in the economy yeah well i feel like i feel like inventory strictly off inventory position and available copper so they’re about to cut you off but well i feel like the shredders i mean if you if you’re it feels like the shred feed market went down twenty dollars this past month on the amm uh we got chart there but is but they’ve lost zorba is down from

66 cents down to 59 cents that’s 11 decrease so if you’re a shredder today i mean if you’re getting getting hammered on all sides yeah i don’t i don’t know that i’d want to be i don’t know that i’d want to own a shredder right now but but i wouldn’t have mind owning one in about you know march of this year yeah a year a year ago just like uh everything in the scrap business you know exactly man i mean you got to pick and choose your spots right um i think that’s just kind of one of those deals yeah last last chart i got for you heavy melt turkey what a what a weird weird month we went we started out at 370. we went as high as 411 mid month and now we’re down to 350. you know just interesting right yeah you know and that’s still part of the summer doldrums i think a little bit i mean what’s going to be the interesting especially going back to zorba and i think that’s got a lot to do with you know aluminum and energy um costs and whatnot so i think

the same thing you know even on the steel side you know especially on export you know export driven commodities like if hms one two turkey being a big consumer what i’m more concerned about is the energy costs and what’s it gonna cost some of these countries just to really like keep the lights on and what’s going to become more important melting hms or just keeping the lights off and that’s like the thing that i think we have to pay a little bit more attention to and just see what how does those energy costs stack up against production costs um yeah that’s something i mean not even on my radar that’s a great point i think i think we just gotta you know and how much does that go into into it i don’t know um just my like 10 000 foot view of you know what’s going on it is somewhat promising to see that thing come back above um 400 and even though it dropped back down 350 range it’s showing you some movement which is good and i think that at least some upward movement not just a continuous downward pressure so

i’m i’m somewhat hopeful that as that as flow dries up and if if even if steel even stays somewhat consistent as far as new steel new rebar needs then maybe you’re gonna get some you know some bottoming or some positive uh momentum even if it’s slightly positive it keeps it from just pushing down farther yeah i mean you could now we’re looking at the turkey rebar scrap spreads i feel like you could argue that hey we’re higher than historical norms yeah people could argue there’s a lot inflation too right so you know does that mean scrap can go lower does you know i don’t know but but it feels like they have margin today so does it mean go lower does it mean that reba i don’t know the rebar can go lower and scott can stay you know i i feel like that’s that’s a similar picture to the domestic market right i mean we’re still i don’t give a what anybody says we’re still at historical margins like you can look at that chart like you just pulled up on that hot roll and yeah your hot rolled is like let’s say

high eight hundreds right yep what is the price of scrap today compared to hot roll i mean look at those margins and if you want to pull the charts like it’s still i mean it’s not that it’s not the margins they were getting it when it was 1900 you know 2 000 but i mean they’re still running pretty decent margins yeah i think that’s a great question and that’s what a lot of people don’t know and i don’t certainly know is to to convert scrap to steal it you know i think it was 160 200 now it’s yeah let’s just say it’s 300 who knows but let’s just say 300 scraps you know what where where is that balance so yeah i think that’s going to be the key um is what is those what are what how far can they test those limits because you know just like i know that there’s more steel mill capacity domestically coming right so um i think that’s going to play a factor too is if you have a lack of flow plus more capacity um as long as there’s some there’s as long as there’s some

sort of uh um demand and that does not be crazy to man there’s always some sort of demand i mean i feel like you know you’re going gonna be able to at least sustain some decent pricing all right million dollar question we we feel like august is down but what do you think is september higher sideways or lower i mean pelosi’s plane didn’t get shot down so that’s a positive um like i guess um i uh i so i don’t know i’m i’m i’m i’m cautiously and i say it cautiously like if there was a bold like cautiously and optimistic is like it barely i can barely see the type you know i mean we’re going down four or five months in a row i mean it’s gotta yeah i remember this and just in 2014 and it was it had a similar feel and it felt like it was death by a thousand cuts it was just i mean 10 20 fifteen dollars ten dollars twenty i mean it’s just every month you’re like as at some point can we just stop you know but it was just you could never it never

could find the bottom and i feel like it that’s a still a similar feeling it’s not like 008 when you went from 700 iron to 50 you know so where they just dropped the bottom out of it this feels more like a 2014 where it’s just you know poking the boat full of holes one at a time versus running into the iceberg yeah i don’t i don’t know if export what that does i have no idea but it doesn’t feel like hot roll is going to bottom in the next uh 30 60 days so no i don’t i agree with that i think that chart doesn’t look very appetizing at all yeah i’m saying you know not up not up what happens i mean i mean in your opinion what happens and i don’t want to see this happen i’m just curious what happens if china comes out and implements a bunch of sanctions against the us or you know i mean how big of a factor does china’s consumption of commodities in general from the us play in our day-to-day lives well i think they’re trying to combat that we bought

a lot of goods goods goods from them and so if they would come out of sanctions they have to walk that line that what if we you know let’s just say we increased we put a tariff on 25 percent in toys yeah consumer but it hurt them even worse so i think there’s a balance there and typically those sanctions it’s typically not the first move it’s the second or third move that that really has the big effect of the market so long way to answer and saying that that’s a great question i don’t know yeah i i was i was somebody asked me that question yesterday i said you know i i said everybody wants to to hate on china but people kind of forget how much china needs us all the time right because i mean we’re a very consumer-centric economy right we’re consumption based i mean we’re over consumers if you want my opinion um you know we have one of the biggest you know the biggest uh retail stores in america is costco where it’s like you over buy everything right um it’s a 500 store you gotta they check

your receipt to make sure you spent 500 exactly like you’ve only spent 400 get your ass back in there don’t you need 40 pounds of socks i know you’re running low on peanut butter yeah exactly eight eighty thousand eighty pounds of dog food or whatever you know i bought my uh we had a like 10 pound dog we bought a bag of dog food dog food’s gonna last until 2024. hey you’re discovering food for you’re smart man covering your inflation your head yeah i’m gonna save myself like two dollars gotta score this for two years but yeah i don’t know i mean i saw somebody asked that and i was like you know i feel like don’t get it twisted china needs us you know i mean i mean they like to pretend like you know they don’t they don’t love us but they still kind of need us so it’ll be interesting to see how that all plays out yeah and and you know i think the russian announced some of their bonds are going to go to the chinese yen so i think that’s that’s a big big deal too so there’s

a lot of unknowns for sure coming in yeah i think foreign policy has never played a more crucial role in commodities than it does today yeah so we’re going from uh you know a decentralization deglobalization environment so that’s the first time i’ve seen this the moral of the story is scrap in august is not up but we’re hopeful that in september that the bowl will return yeah no no i’m not there i’m i’m saying maybe sideways well i said i’m hopeful i’m not oh i’m not guaranteeing anybody anything i’m just i’m just over here you know just being optimistic and hopeful that you know we’re we’re at the bottom optimistic that the bleeding may stop exactly exactly well i appreciate your time today thank you all right for another uh exciting edition of bowls versus bears see you guys in september see y’all