uh 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 another bulls versus bears with my man chad ellerbrock he’s about to give us all the good news that’s going on in the world today and uh the commodities i don’t know if you guys ever look at my linkedin stuff but i gave you kind of a quick rundown of what uh the commodities look like so far this year launching off of a cliff they start looks really good while they’re catching air and then uh they’re coming they’re coming down so that when i saw that video i was like oh man this is like too perfect for for what’s going on but i’m hopeful that uh the chad being the the bull that he is gonna give us some positive news today what’s going on man oh not much i uh appreciate you doing this again in july i think uh i love your hat

it’s a great great hat thank you sir i’m gonna send one out to you i mean i gotta i gotta get on it i’ve got a couple requests and i’ve got a few here in my stockpile of hats i guess gotta get motivated and get some sent out well when i was thinking about america i got so i gotta read this paragraph to you you gotta let me know your thoughts uh so it says our presently our us’s u.s administration is now in talks with china to eliminate or reduce many of the trump-era tariffs enacting to protect american industries in fact janet yellen suggests china tariff restricting would help ease surging in u.s inflation however one thing is certain easing inflation will arrive expenses of u.s jobs corporate profits and success we might find less expensive goods in our future but at what price u.s steel companies continue to focus on going greeting going green and trading carbon credits their greenway very well may be once again asian bound once more tariffs are removed or restructured metal pricing would erode substantially and that may be the detail we were

missing to understand the sudden drop in future pricing that began to unfold earlier this year so what are your thoughts on that my initial thoughts are trump made a pretty good deal i think it was good for american steel mills good for aluminum you know mills good for american manufacturing was it did the local domestic and i’m speaking just from the uh you know there’s the scrap metal recycling industry as a whole basically what it did was you know it enabled the mills to open up big margins on scrap in my opinion so does it hurt domestic steel mills i believe it does does it hurt domestic aluminum mills and other manufacturing i believe it can um but regardless you know whether those tariffs exist or not i firmly believe that as long as the dollar is as strong as it is the export market is going to be weak no matter what because there’s they’re not buying anything from the us at a discount you know and and i think strictly speaking scrap the the only way and i preach this a lot but the only way that you get a you know

a better price out of scrap is if the export market is strong and the domestic market is strong so by relieving the tariffs it probably puts pressure on domestic manufacturers but i don’t know that unless the dollar comes off that it really benefits the scrap recyclers that are exporters all that much it probably just does more harm to the domestic manufacturing than it does um providing some sort of relief on the commodities side for the recyclers that’s my takeaway from it it was a you know it was a way that you know trump has always been very pro pro america at least that’s what he kind of wrote his ticket on and you know in battling against china and and providing you’re seeing more manufacturing more steel mill capacity coming back you know you know as well as anybody you don’t build a steel mill overnight it takes years of planning years of construction so um you know he put things in place to get that moving and i think by eliminating those tariffs you might see a small ease in in pricing but it’s not i mean that’s not what is driving inflation

in my in my in my book it’s it has a lot more to do with the price of fuel than it has to do with anything that any sort of relief valve you can pull by giving china better access into our markets again so we woke up yesterday i mean crude was down a lot what are your what are your thoughts on that dude it’s like anything right i mean i think that as soon as everybody starts talking about 300 oil you get everybody on one side of the fence and then you open up the hatch and then boom it goes right i mean as soon as everybody starts talking about five dollars six dollar copper you get everybody bullish bullish bullish but boom you dropped it you know you dropped the floor on them it’s a traders game i mean oil copper these commodities you know we’re over here taking physical possession of a ton a hundred ton a thousand ton whatever it is when you got guys sitting behind a computer that are moving thousands of tons with the click of a mouse button like you’re just a pawn in the in

the big game and so for everybody’s like oh well look it’s it’s off that means that this is this means we’re going into a recession or this means like no i really believe it’s more of uh people with mouses and and laptops you know trading and making more bigger moves than any domestic manufacturer or recycling company can ever push the market as a whole like that i mean it’s there’s a lot more of the glencores and the you know the big or the you know the big mining companies they’re a pawn in the game it’s it’s your really big trading houses i think that are manipulating these markets and manipulating them by pushing them up and down i’m not saying that they’re cheating the system or not i’m just thinking they’re just trading and they’re you know making making moves and good bad or indifferent there’s the people that are you know traders and there’s the people there you know in the recycling industry or the domestic steel manufacturing industries you know like it’s we’re kind of just players in the game we’re trying to ride the waves and get our little sailboats from

from taking on too much water and tipping over well i mean traders can’t make money in sideways markets and i think one of the guys i look up to paul peter jones he was just saying you know it’s going to be hard the next five or six years he thought would be hard just not to lose money and so he felt like he was just going to be you know cycle trading meaning wherever wherever the the flow of money’s at he’s gonna ride the wave and move on you know small wins right base hit so that’s i think and you know like you said trading is has got to have ups and downs otherwise it’s hard to hard to make a buck well when you think about it i mean i mean like let’s say like whether you take copper or whether you take you know one of your pgms for example right i mean it becomes a like you know some news comes out let’s say um some news comes out that uh there’s the peru copper mines are striking all sudden copper goes up 20 cents well did copper go up 20

cents because all of a sudden there’s less copper in the system or to go up on the speculation that all of a sudden some some potential um labor disputes are going to drive the price well it’s people front running everything right so the market drops seven dollars the oil market drops seven dollars in a day right it goes below 100 is it did it really drop or is just people trying to front run it trying to get ahead of it and then all of a sudden they go too far and then that’s when you get the dead cat balance or you get the you know whatever bounce or the the next wave up and i’m not good at picking tops or bottoms like i’m really just trying to take chunks out of the middle like that’s all i can do because i’m not smart enough to be a traitor i’m not smart enough to do you know huge lots and trade futures and whatever else i’m just trying to take chunks out of the middle and make a little extra and put some more in and build a little bit bigger and take another

chunk out of the middle and that’s really the only way i know how to play the game yeah well that’s the scrapism trend is your friend right yeah yeah so if you have if you if you’re sitting on a lot of scrap right now you might miss the windows that’s all right no scraps i mean every scrap dealer’s got to be saying there’s no scrap coming in anymore i mean it’s officially off yeah it goes well like i said i was just having a conversation with a scrap buyer and i was telling you this earlier this morning and they and they were talking about the price of crap coming down i said it is what it is but i i had this conversation i said there ain’t no more scrap man like i haven’t seen i’ve come in the door for a while like it’s it is slim it’s getting slim pickings out there and i talk to people all over the country and i’m like you know they’re just the the jobs the demo jobs the you know the big scrap that you know big you know i haven’t seen that for a

while you know like at least for a couple weeks now it’s been pretty pretty slow i just feel like we go back two years these kind of pricings would be like this is great scrap pricing it’s crazy like you know high 300s for mid 400s or pushing you know all of a sudden you know i mean what how high did bushden get what was it what was what was like the when you looked at it i mean what how high did that price get in the midwest roughly speaking that’s i mean i don’t i don’t know that right off top of my head i guess i could look but i mean i heard i heard whisper numbers of like 900 well yeah i mean i would say i think the index high was 87 760 was like the amm chicago number so realistically like mid aids people that needed it or they thought they were going to be short on it yeah i’m sure yeah so i mean you talk i mean to me i mean that’s a that’s a big number right that’s i mean i heard cut grade numbers you know up

and pushing fives and you know there like in march when it started april when it’s starting to get crazy so i don’t know i mean it never got to quite 08 status but it got pretty damn close you know i mean and then on the non-fair side you know you broke some records on you know some of the base medals but we’ll see man like like i said like you’re like you don’t make money if everything just stays flat so yeah um well so yeah i was asking about the us and china because i just feel like that’s important you know i feel like me personally i feel like the u.s has been i was just saying tell me your opinion i want to hear it let’s hear it well i think i think the u.s has been printing money on the us deal side right all the steel makers and i think ralph like hot roll pricing prepared in the u.s for the rest world we’ve been on an island a very profitable island and so uh one thing that i think you could say contributes you know if

we do turn off 232 you think about what trying to make steel out of you got iron ore right and so you look at this chart you say wow iron ore is down 18 19 a ton from 133 to 115 ish you know it’s 14 month over month that’s that’s a bearish that’s not good it’s not good and so you know on that note you’ve seen pig iron fall off a cliff too so that’s this is down like a couple hundred dollars a ton um 850ish to 650-ish that’s down 25 that’s that’s unbelievable i mean you can just see like you’re talking april buyers just lost their minds i don’t know what else to call it you know well but i mean you look at the difference i mean i mean look where it started out in february i mean we’re still not even down to february numbers right and people are like the world’s coming to an end and i think is there going to have to be some recalibration absolutely but i mean also what was the price of diesel in february and i think you know that’s going to have

to be taken into consideration and there’s just a lot of things that are they’re going to be taking into consideration and i i feel that you know it the price of fuel is more inflationary than anything else and i just because that affects every single person every single day every single product and every single commodity more than any other number you can put in front of me i i i feel like that’s a it’s a big piece of the puzzle yeah well what about what about steel i mean steel’s off off a cliff too so this is hot roll we’re looking at uh last month i think it was around 1200 today or you know 900 ish i’m 20 25 somewhere in that zone this is this is unbelievable unbelievable-looking chart yeah well i mean look at the you know the peak from a thousand to 15 and back right i mean it’s in in the matter of you know a few months and i think that’s the you know yeah we went straight up straight up when that the war or the conflict started right it’s uh it’s not gonna call it

it’s okay to call it a war or below we’re below that now we’re below where we started well i want i’d be super curious i know you don’t just have this at the tip of your fingers but yeah what this chart looks stretched out over you know a couple years maybe maybe since well maybe yeah yeah i mean i think if you go if we were to if this is 2018 and we’re talking thousand dollar hot roll we’re thinking wow that’s insane pricing yep exactly and i think that’s it’s all relative to uh it’s all relative to what your what to what you’ve paid whether a month ago a year ago or five years ago you kind of have to take a step back say okay what was the price you know in 21 was the price in 18 or 17 you know like i think i mean 16 was ridiculously low i remember looking at that chart going holy you know yeah and you know so this this is arena you know more about what do you think of copper these days this this chart is yuck yeah um i feel like coppers

got overly hammered um but i and i feel like the traders have you know dropped the hammer on copper and people are trying to front run a recession or you know a potential recession so they’re trying to get ahead of it versus playing from behind um if you look at copper inventories like lme warehouse inventories they’re the lowest on record since they started keeping record right um so you combine low inventories with a with a dramatic you know quick price action like that i feel like the short squeeze could be phenomenal once people get everybody loaded up on the short side i feel like that thing could rock it back pass for you know easily now will it i don’t know you know that’s why i’m just by scrap and you know chop some wire like i don’t really know you know but but i feel my gut says you know there’s there’s could be some pretty good buying opportunity and i’m not saying that the trend doesn’t continue down over the rest of the year but i do feel like there’s some real upside potential if the squeeze is on you know just

like they squeezed it down i feel like they can squeeze it back up just as quick so the question for you is like the speculation in stocks or you know oil was these these levels these 440s average all up to 480 was that all speculation and now we’re just getting back to actual realized pricing or this chart out a couple years to your point like and it looks very much different right this dramatic fall doesn’t look as big of a deal if you get back to three dollar copper because that’s kind of where it started right but the reality of it is if you look back at the inventory and i got a guy i’m gonna interview here coming up at least i think i got him convinced john gross who does the copper journal okay um smart guy he’s you know he he’s he him and i’ve had a little bit of conversation i think i’m i’m super curious to get his viewpoint right because he understands copper as well as anybody i’ve ever talked to um so i won’t i won’t say the words for him but i’d like to see what

his what his point of view is because him and i i when i look at the report he puts out on the inventory levels and i’m like there’s no way this thing trends all the way back down with with the amount of inventory that’s even available um so we’ll see but i feel like the squeeze could be on here yeah so zorba this is a big one for the the shredders this one i think we’re at 71 cents now we’re 66 cents and sound seven eight percent so i feel like that has to be it has to be inputted when you’re thinking about shred feed you know if the market whatever the market does i feel like whether the shutters can actually get it done they’ll though ideally want to take down pricing more than the market to catch some dollars back on this this chart but i don’t know if they’re going to be successful yeah and you’ve had i mean they had a good run though i mean when they’re picking up you know 20 cents you know on zorba and giving you an extra you know couple i mean to me

there’s the shredders you know i think there for a while printed pretty good money as well anybody that was in the shredding business now they think they’re gonna have to you know it’s gonna that’s gonna have to kind of come back to reality a little bit um you know i’m all for the shredders making money i ultimately like i only sell two shredders so for me like it doesn’t i’m if they’re making money generally speaking like i got a chance to make money right like people are well you guys are just making money on our backs i mean to a certain extent like you’re they are making money off of you if they’re doing their job but you should be making money doing what you do as well too if you’re not running a shredder um so let’s see same thing for the steel mills right the steel mills are doing well typically the scrap guy’s doing well exactly i mean typically but uh maybe not as well i do have to mess with these with the steel row guys but so i mean i think the steel mills you know those guys should

be more worried about the 232s than the scrap guy you know i mean ultimately for us should i welcome some more scrap demand but nothing nothing’s going to change if unless that dollar you know catches some weakness because right now it’s i mean it’s nobody wants to buy us anything because it’s too damn expensive you know talk about weakness what do you think about the nicholas chop nickel uh nickel market yeah that’s uh you know and and it’s weak compared to you know to where you know it has been the last few months but generally speaking you know i still think 10 11 nickels is relatively speaking of pretty good is pretty good um if it depends on if you had to you know buy at 30 but i mean i still think right in this range you’re it’s still decently strong nickel market um historically speaking right and nickel is going to be a big commodity moving forward you know as far as from the ev standpoint um i think nichols going to be a player and right now everybody’s just i think everybody’s pretty nervous about where this uh where this thing

goes but i also believe that when the fed comes out and says okay we’re good we feel like we’ve you know we squashed this thing we squashed the top off you know let’s kind of see where this thing trends out um the commodities are going to get some relief again but as soon as while the fed’s out there telling everybody to go pound sand and we’re gonna keep raising rates you know like good luck you’re a traitor right you’re you you talk to people are traders what’s the like the old like the oldest saying in the book like don’t fight the fed like yeah i mean right now if you’re going against that trend you’re probably not you know having much success yeah powell said i will i’d rather see a recession than in more inflation so i think he’s telling you exactly what he’s going to do exactly i think there’s a lot of talk there too you know he’s trying to talk everybody out of it um as much as he’s trying to policy his way through it but i think it’s the combination that will you know that they’re going for

but we’ll see yeah so here let’s let’s bring i couldn’t i literally found zero bullets oh you see that you see that little bump this is what they call it dead cat balance yes economics one-on-one dead cats a lot of cats i’ll take however we can get it you know no i think it’s worth i think it’s worth mentioning though i mean i think at the beginning of the month we’re around 435 turkey uh we went as low as uh mid what three twenties three thirties now we’re back up to 3.95 so that’s we’re only down nine percent now that’s it’s a big deal i feel like uh i feel like if that thing you know we’re going to push push over 400 you know you know and squeeze back get get us a little momentum then maybe we’ll find some relief on the scrap side domestically um still you know what we need to do here’s a project for us what we should look at we should overlay like currency charts right okay one of these days like and just see like what is that you know how does the

the strength or weakness of the currency affect i’m just more curious than anything like what is that what does that look like so you’re wondering the basically us dollar verse the lyric versus heavy melt yeah exactly like just out of curiosity um i believe i believe there’s going to be a pretty strong correlation right there but i don’t know it off top of my head just guessing i like it i like it so let me share my fine skin what’s that i shared my super uh super bearish case yeah this is an easy month i think i figured i i can’t argue a lot with you other than i’m hopeful which of my you know they always said you can hope in one hand in the other see which one fills up quicker but i am uh i’m hopeful that i think that’s a scrap quote in it yes yes exactly i’m hopeful that that little balance that we you call a dead cat bounce i call it a live cat bounce that uh it’s it’s gonna give us a little bit of love going into live pricing wise at least not as maybe

the world’s coming to an end movements as we once were thinking maybe a week or two ago but that being said i do believe that um if you i was let me go back a little bit i was telling somebody the other day on the phone i said we’re in that we’re at the point now in commodities where the sale you take today feels like a shitty sell sale but then tomorrow or the next day if you’re like man that was a good sell you know so just like when on the way up when you’re like you sold aluminum and you’re like man i just got 75 cents for old sheet and the next day it’s worth 80 and you’re like i wish i would have waited one more day i could have got 80. yeah yeah yeah you know i feel like we’ve we’ve crested that hill and now we’re on the other side where it’s like i would take 75 right now you know and be happy about it you know it’s so it’s the same thing and that that’s the rule that’s the million dollar question this month i’ve heard scrap

dealers telling me last month even the month before this has got to be the bottom it’s rumored that this is the bottom yeah now we’re here in july for the third month and we’re hearing oh no this will definitely be the bottom what do you think when do we do you do you get in do you sell what you get in do you say oh no i want to at these levels you know i want to pile it up what where’s where’s your volt prediction at i feel like it it all depends on the individual company if you have strong cash flow and you you’re comfortable then and you have space then i don’t feel like it’s the worst case scenario to see you know where this thing develops if your scale price is right if your scale price is right if you’re buying it right like you know there may be some opportunity to sit on some scrap right now um and see where where it bounces um you know i don’t think you’re just going to take a blood bath going into you know august or september i mean could it move

down a little bit for sure right you’ve seen it you know um as long as oil is hanging around that hundred dollar barrel plus there’s still going to be some demand for octg stuff there’s still going to be some steel demand as long as the interest rate doesn’t go to 10 percent you know there’s still enough i still feel like there’s enough construction projects that can still get done around that five six percent like does the economics work as well not really i mean it depends on how far out you know depends on how much you paid for the dirt how committed you are to the project you know like those construction questions which is a whole different beast in itself but could does the economy need to slow down a little bit yes like absolutely i mean so does it so is it does it hurt to stack a little bit of scrap right now i don’t think it does i don’t i don’t think it does but but you’re not saying for the next 60 days you’re saying this could be a six month hole type deal yeah i think i would

say like you sell enough to keep the lights on right if you’re gonna if you’re if you made the decision to sell scrap or to hold scrap then you hold what you can cash flow and you and you sell enough to keep the wheels on the bus right and you say okay like i could eat that it’s better than money in the bank or i’m willing to take a little bit of you know inventory um risk but you know you i don’t it depends on you know what it is it depends on are you do you do ferris stuff a lot of ferris tons you do are you a big non-ferrous are you kind of 50 50 um you kind of have to pick your battle because you know i feels like all commodities are fairly soft right now but it wasn’t that long ago that all commodities were pretty hot so i think i think that that deal can change depends on the fed’s attitude of where they feel like this market should be but you saw the jobs report come out i mean that there’s still two two job openings for

every available individual that looking for a job so it hasn’t squashed the hasn’t squashed on the employment yet i mean yeah the new home bill the new home build numbers are are awful scary though yeah so yeah i’m with you i can’t disagree with your opinion if you’re buying it right but i might you know i’m more of a 60 day 90 day trader i feel like trend your friend just stay out of its way you know buy and sell what you’re going to buy and sell and move on but yeah that’s just me so that balance up is that the trend is it going to be i don’t i don’t know that’s something that charge definitely a downward trend hey like i said we don’t catch tops and bottoms we just ride the trends so exactly exactly well everybody out there you know listen to chad he’s much smarter than me he he’s uh he knows the material he knows what he what what’s going on i’m just a scrap guy i know what i would do if you’ve got if you’ve got a little bit of risk in your appetite i don’t

feel like sitting right now is the the worst thing but also you got to sell enough to keep the lights on and keep keep stuff moving but 232s maybe they play a role maybe they don’t you know if the tariffs come off or if they get you know diminished to a certain extent maybe that opens up the market a little bit i just don’t see it unless the strength of a dollar comes off at some point so that’s my two cents closing closing uh closing remarks are you good i’m good i really appreciate your time time this month always have a good time with you man all right thanks brad yeah bye