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 here we go December Edition the last one of 2022 I got the Bulls versus Bears podcast um what started out as a good run for me on the bull side um all year has really withered into uh you know to it to a bear scenario but I’ve got Chad ellerbrock the guy the man that met the legend with me and uh the best crap ever and you want to know more man just ask Chad he keeps me posted keeps me in the loop so that’s what we’re here today he’s gonna tell me what I don’t know other than I feel like there is maybe a little bullishness coming out I don’t know we’ll see we’re about to hear what’s going on I think you’ve done a great job last several months representing a bull I mean I I don’t know if we went back and

listened how many times we say man this has got to be the bottom there’s just no flow so that’s where we should start at where how are your flows if you call the bottom enough times and that’s the way I live my life everything’s good it’s all the way up from here and eventually like you’re right you just may be wrong like a shitload of times before that I love it I love it terrible man I mean it’s in Idaho it’s cold um but in general like scrap flow we were I was talking to my guy like our Caldwell yard for example and we are basically um we had a demo job going on kind of right next door to us if it wasn’t for that demo job we’d be sitting there with our twiddling our thumbs it’s been across the scale traffic has been absolutely but you know is that pretty seasonal though or is that pretty typical take out 2021 you know I think it’s a little bit of both definitely seasonal it’s been the weather’s been cold um and it’s it’s been nasty so take that into consideration but and price

wise it’s just hard to get people motivated to you know when the pricing gets good and I’ve seen this in every cycle we’ve ever had essentially if you get a good run in pricing let’s say you get to 250 ton you know Peddler traffic for car bodies and whatever else right or 200 even then you start telling people you’re gonna pay them 80. like they’re like oh dude I’ll just wait you know and so that that takes a while to get to that point you know and then you got to get all the way you know back to where 80 looks good again and then you could actually see some news and flow so it’s like you get a big massive amount how to push when the price is climbing because people like oh they hear the price is good they start shoving material through the system and then once that thing drops off it’s then you have basically the the cyclical effect of the material it takes a while to like actually get kind of get some some some velocity again to where it starts going back in your yard so we’re in

that slow that slow bottom right now it feels like that transition yeah well I mean I think we got to start with the the bearish points because I think you’re right I mean things are things are tough out there this is the uh the pig iron chart we are we’re down uh we were at 550 we’re at 502 demand looks even weaker for this grade what do you think I was reading an article this morning and they were talking about I think what they call them like mini Maxes or like the the small um bolt vessels they were basically paying eight thousand dollars to wash them out so they could put grain in them because there’s like nobody wants to ship any pig iron or like you know low-grade um or they’re like it let’s just put food in it people want they still need food you know so what what a shift I mean if you had told me that pick on prices were going to be where they’re at and uh in March of this year when the world was ending it would have been a totally different shift so so

from March to let me move this march to today what’s uh where were we at March Christ so and well gosh that’s a great question that was probably what was that close to over a thousand dollars a ton yeah a thousand bucks to what like four for the people that don’t aren’t watching this like 450. yeah so today we’re at we’re at 502 from 5 50 last month so when we’re down over here over over a thousand dollars to here we are yeah couldn’t have yep and then uh you know I feel like that sounds like a good bullish Point Chad let’s just take a look at this why are things weak because right here crude steel production beginning the month you know we’re we’re hopping along around 74.5 now we’re below there I think the newest report was 72.8 percent I mean that’s that’s the answer to your equation right there no uh no demand no no pig iron prices well I think the demand part is I think that’s what’s going to be the story even in 23 unless something finds Demand right like the demand was there in 21

and 22 um and a lot of this because I think there was an excess amount of liquidity in the market and it was the demand was was definitely there from you know consumer goods to equipment machinery you name it right people were trying whether now that I’m not saying that the supply chain and Logistics and all that was like all the way in place to support the demand but the demand I think was there on the on the steel side um that being said like 23 to me feels like it’s going to be a demand story like is there going to be enough demand to support the to support scrap pricing yeah we talked about that last uh last month about you know Supply driven market and uh demand-driven Market there’s no doubt this demand driven market and you know so I just just showing you the hot roll chart so this is another one we’re at what close to twelve hundred dollars a ton on hot roll uh you know you could argue hey we might have bottomed here right but but last month on Hot Roll we were at 7 10

we’re at 673 as of yesterday on the future so down a lot down a lot uh but let’s let’s hope uh let’s let’s see if those lead times increasing by a week month over month is going to be the ticket hold on leave that screen up I’m gonna I’m gonna take a picture of this my cell phone because I gotta buy some pipe here soon okay hey I’m just saying just uh just saying we should get pictures check this one out yeah on the flip side I can at least say I’m just saying like there’s a there’s a pretty big difference well the it just feels like Demand on certain Commodities or demand is obviously down utilization rates are down it feels like flows have been the story of flows have been slow for a while has been been around so it feels like we’re getting with lead times expanding a week you know if we’re going to talk about demand driven Market that’s a pop that’s a very very positive sign so it feels like we could be starting to make a turn but it’s a little bit too early to call per

se yeah I was we know they always call those like a dead cat bounce or whatever like does it is it giving you just is it like the last like glitches before it just you know where it dies I uh I went elk hunting with my dad on Tuesday it was the last day of the season and we had drawn a tag and that’s I don’t apply why I’m telling story people probably don’t want to hear it but the reality of it is like we uh my dad shot his L um and we were like you know it was snowing outside and we had it and and he’s like and he had to go back just trying to figure out a way to get to it versus hiking through this Ravine or whatever and um and he’s like keep an eye on that help and I was like all right I had Brian my our uh um CFO with me I’m like all right I’m like he’s like and but I could see it like twitching I’m like man that thing just looks like it maybe not so I’m feeling like this this has

that and hopefully I’m I’m the positive guy I mean says all right we’re on our way up from here but this could be like that oh this is the last Twitches before we uh before we quartered it out and uh and and hung in the freezer so we’ll see well I’ll I’ll set you up with some bullpoints here and maybe maybe we’ll we’ll mix turn some feelings here so all right then now you go now we’re talking I’m tired of hearing your negativity all right so uh good steal crude oil our excuse me crude oil this is one that pre-covered you know oil and steel always seem to Jive close together and oil is actually down from 87 and a half to 81 around seven percent so that that’s one commodity that that we haven’t seen um with any positive news here over this month yeah I think I mean dude I don’t I don’t love the price of diesel having you know try owning a trucking company that’s a tough it’s a tough business to be in right now um but you know you can only hope that if the price of

oil is up and that Spurs like the octg market which is maybe creates some Demand on the steel side um if you can keep the oil markets up the problem is is octg Goods you know that that material here in the United States if they don’t allow you to drill and not allow you to do anything then it doesn’t really do you a ton of good on the scrap side right it’s just kind of um like pissing in the wind it’s like yeah now you’re just paying more for oil but there’s no scrap demand so it costs you more to deliver everything more for equipment but your you know the value of your material is worth less so I don’t know you can tell it’s Friday you’re in a good mood and we got got two analogies back to back oh yeah well sometimes I’m like you just gotta find a way to make a bullet point out of some uh some real news that you give me so I’m uh I’m gonna find I’m gonna find some positivity so I’m I’m hopeful that that they’re gonna realize that we got an oil issue

in this country again and neither let us know let’s put the the drill stem in the ground and go for it again so there you go well what do you I mean so what do you think about iron oil iron ore is up it went from 93 a time to 103. that’s almost 11 increase this is a good sign when especially when you think about China yeah and Nick and I discussed this on Monday but you know I I I truly believe that like people are writing off China like already too early and I I’m not saying that you know that China is going to be the China of 2009 or 10 and just kind of come to the market and just go bananas yeah but you’re talking about a billion people you know you’re talking about I mean India a billion people plus right like there’s just too many people out there and infrastructure that needs Bill and and for it to just write them off and be like yeah they’re just not gonna you know they’re not gonna consume or do anything right and if they actually are allowed to do it

and they’re allowed to you know produce and and build and construct and you know and which I believe in 23 that’s the story as well um yeah I think I think there’s a chance and so if we look at Shanghai steel rebar uh we’re actually up and we’re at uh around 3 400 today we’re at around 3 700. I I feel like this is and we’ve seen a lot of protests in China which something that doesn’t usually happen on a lot on that big of scale across multiple cities I feel like you know people got a taste of non-coveted life and now they’re going back to it but I think you’re I think that’s a real X Factor for 2023 you could see some stimulation through some some for the Chinese government when it comes to building or infrastructure or something along those lines one thing I’ve always appreciate about how China went about you know like I remember in 2009 10 over here when it was pretty rough go and you know I think that was like the you know pretty big expansion of the welfare system and you know the free

stuff right um here in the United States you know what those guys did is they doubled down on their own infrastructure and they said hey if we can keep our guys working yeah it may not be the job you want it may not be the pay you want but at least you can feed your family at least we’re gonna build out our country while we you know try and everybody digs out of this financial hole right um and I’ve always that was one thing I’ve always appreciated about how they they went about that recession and you know I I envious the fact that we as a country sometimes just give away free instead of like saying hey let’s just build up our infrastructure we’re going to create these jobs you know let’s get rid of some of this red tape and just like say screw it it may not be the job you want it may not be the pay you want but we’re not going to give you money to just sit on the sideline and wait till the software engineer job comes around while you’re waiting and finishing up College like no

it’s time to go to work right and to me like if that was to happen I feel like you could solve all some of these you know kind of infrastructure issues that were you know that are that are happening within our country but that’s a pie in the sky dream but I do think China that they they really know one way of digging themselves out of a hole and they’ll stimulate that market and it’ll be on the infrastructure side because they know GDP is a big piece of you know why people want to invest in China why people are willing to put money in their stock market or their business environment or whatever right because they’re like okay they’re gonna invest in their infrastructure and into their country versus just giving the people a bunch of money and saying yeah go buy a bunch of crap well well there’s certainly opportunity if anybody that’s heard of one road One China there’s a whole even though there might not be room for growth in the real estate world for on the infrastructure side that would definitely align with one of their their goals yeah and

and if that happens you know this um I was talking to a certain scrap brokerage firm I will remain nameless uh yesterday about you know pricing and what what’s what what to expect you know and going into December and we were talking about you know the export side and you know how the Mills were the last two years have been basically I envisioned it like uh you know Scrooge where he’s like in that big Vault and he’s just swimming and money and coins are falling he’s just throwing it in the air and there’s just so much you know and it’s just and I was like in US scrap guys you know we’re just trying to you know keep the lights on and yeah yeah you know that sounds like it yeah he’s like well nobody ever talks about um you know the years before that like 13 or 14 I remember what years he was alluding to when it was like there was no money being made and blah blah on this and that I’m like I think everybody gets their turn of the barrel but I think that in 23 even in 23

or 24 it could really be if we can get some relief in the dollar it could could be a um an export driven Market you know pricing wise where the where the domestic that you have to you’re not necessarily paying that because you want to but you’re almost paying that whatever price because you have to if we can get some of these um export you know these scrap consuming countries rolling again so talking about steel mills I’ve seen a chart the other day and you know I’m going to be wrong here but I want to say Cleveland Cliffs was like 20 or 21 of the hot roll market and so if you think about that you know when all these new eafs are coming online it’s clear they’re going after the BLS right it’s just Thursday so if that’s and if that’s the case and I think that’s what I think people are so surprised by is we we anticipated all the scrap Demand by these new AFS coming and literally did we know that it was going to kill along with you know obviously there’s more to that story but our old demand

um it created more availability so it created less demand you know so there’s still that balance there you know because you still got the POS working hard you still and then you got this new AF capacity really that that bof has to go away before you’re really gonna going to get there and I think weaker weaker steel prices uh you know I don’t know what the costing model is but I would think there comes a point where it makes a lot more sense to turn a bof off if scrap if pricing on steel is low versus high you know and so it’ll be interesting to see him so do you think like to that point Chad do you think that that’s a strategic like approach for the eafs is like hey man let’s let’s watch this go to Israel I mean like because at the end of the day like if the farther we can push this thing down that only benefits the EAS in the long run so because it’s going to put the BLS basically like we can’t run it at that cost right well does anybody have yeah does anybody really

have that control over the market I would say probably not but even if they did I think they’re getting close to that costing standpoint where they’re you know they got to answer the shareholders too and and so can they just make steel as for for a loss or even a little loss for a while I don’t know they’re obviously they can but do they want to after you know the banner years they’ve had I think that’s gonna be the nice thing about having the banner years is it that it allows them to do it for a while to see if this thing gets a bounce or gets a little bit of of love right like I mean it’s all about it’s all about what what have you done for me in this last quarter and you know in the stock market world so we’ll we’ll see how they interact but I I definitely think until we have that the blast furnace uh capacity some of that loss you’re gonna see it’s good I don’t see it I haven’t seen a single Futures that said oh hot roll is going to be wiped right back

up to 1500 plus right it’s it’s all pretty pretty close to where we’re at today well and I don’t I don’t see that right like you said I I don’t I’m with you like I don’t see that being the case which is why from a bull standpoint I mean the only way we’re going to get pricing relief or pricing movement is if the export Market comes back into play right yeah I think that’s the I mean that’s the world we live in right now is if I don’t see a bunch of extra domestic demand coming from the you know from the steel mill side here in here in the U.S then really the only way you’re gonna get some some stronger pricing is export and some relief in the dollar and if not if you don’t get that then buckle up because it’s going to be you know it’s going to be a long 2023. well so talking about export turkey uh 80 20 they’ve they made some real shifts so we so kind of mid-month we went down yeah we started we started the month at 356 I think we brushed

340s in the middle of the month and since then we’re over 370 or 375 I think was the latest print so month over a month that’s out you know five six percent that that’s a big impact in my eyes uh for that could that could really gobble up some times on the east coast and then influence some of the container markets for sure yeah which I mean it doesn’t like another thing another part of that conversation with the Scrooge swimming all that money is you know it’s like as much as I pay attention to Turkey pricing and what’s going on in the midwest I’m like the reality of it is for me like what really affects my pricing is like you know a couple steel mills and the dollar because if the west and basically the Asia consuming markets really because everything that was coming off the West Coast right so it’s like turkey yeah turkey’s up 20 bucks or 40 bucks or whatever I’m like hey that’s great I’m happy for the Midwest guys that are having volume sucked off to the coast I’m happy for the East Coast guys that are maybe

getting a little bit of a bump on their pricing like I’m cheering you guys on like export that let’s go hold on well it doesn’t really help me a lot right so but but the purpose of this podcast is to give everybody like you know here’s where the whole Market is and which is why I love having you on here because in just my little narrow Focus world I can just talk about you know like what’s kind of happening in our region but the reality of it is like there’s a lot of moving parts that are happening well well I’m gonna I’m gonna drop my knowledge on you you know none of us live in a vacuum right and so if if there’s a lot of times being sucked off the east coast it’s it’s just a domino effect in my opinion yeah I mean I’ve traded tons in the Southeast Midwest all across the United States so I I feel like it’s hard to ignore that fact now will uh will that have an impact immediately I don’t know but it’s certainly it this is in my eyes if you see uh hot

roll the man jump over five especially six weeks that’s when it’s gonna be a truly demand driven market and I think you’re gonna see some real positive momentum at that point and then that that usually intercedes with turkey you know if the if we like I said if the dollar remains weak and we start seeing some some more tons being traded even export any anywhere that’s gonna have a real impact yeah I do I don’t know I do feel though like I’m I’m hopeful that that market that that sticks that that price increase sticks um and just give it a little bit of a little bit of you know suck some tons out of the country I think that’ll help everybody Midwest East um so we can see if what 2023 brings on the demand side but it definitely feels the story of this month and I was thinking about this was like just two weeks ago I was like pretty adamant this thing was going to be off right um this Market was going to be ah at least another 20 bucks and that being said you know as the month you know

started winding down it started to be a little more hoping a little more uh you know a little more positive a little more Bull action in this market and you know that last chart with turkey coming up you know bouncing off the bottom hopefully and and uh and giving everybody a little bit of you know at least making the domestic steel mills kind of ticket Keener eye at you know what’s going on over there and say all right if you’re gonna compete we have to be you know in a certain range I think that’s a good thing well that that would be my tip of the month if you’re out there trying to buy a scrap you know and you you got a bull like we do here you just say hey you you called the bottom six times the last six months you stop giving away all my uh all my points please if you do that to me polls versus bulls like you’re not allowed on here unless you only talk about positive bullish situations and where the scrap prices should be or could be okay yeah and there you go there’s

everybody’s tip of the month for the Bulls hey better days are coming we all know it no scrap it’s all good we are the Twitter of scrap like we only talk about the positivity going on in the world this is that that’s we don’t want to hear the rest of your guys you’re bullcrap safe Zone podcast exactly no we don’t want curse words and we want only positive only positive uh speaker on here all right let’s so let’s let’s spend 60 seconds I don’t I know very little about non-ferrous but copper made a jump I think last month is around 3 42 this month around 380. give us give us your your Blair but not Affairs well I think that kind of caught everybody off right I mean it wasn’t like I was telling somebody I wasn’t like I I sold a load of copper at three I mean actually I was in Vegas for SEMA at the beginning of that uh because it was the beginning of November when I think it was like 25 cents up one day my phone’s just blowing up and I’m like what the hell is going

on I’m like talking to people at the booth I work the booth with our guys and gals and um and my phones and I’m like geez but I don’t want to interrupt what I’m doing and if you’re like man this thing is on fire I’m like what what’s on fire and they’re like like what’s look at press the copper and I was like you gotta be me because I just sold like a lot of jobs priced it I’m like go go figure it was up like 25 cents but I think that run copper hit like 391 or I mean it hit I think it got all the way to 392 or something off of that yeah yeah 393 is what my chart says I remember looking at it being like man that’s a quick way to leave a lot of money on the table but uh luckily I had some more I needed a price so I wasn’t able to catch all of it but I got I got some of it um but I that was I think that was when China first kind of came out and said hey we’re gonna look

at the covid zero covet policy right and then then obviously it came back off and then uh here what earlier this week when was it yeah Wednesday when uh Powell had his comments about um you know maybe slowing the pace of the interest rate rise to a half percent versus three quarters or like maybe the future is looking a little bit uh brighter on slowing that drain down um I think the market just went bananas again I feel like it’s super dollar driven the price I mean the price of copper is I mean is it’s just a Trader’s game right now the on the lme and the commacks I mean there’s been it’s not like demand is fluctuating that much in a day right it’s just what is the dollar doing and are people bullish about Commodities because of inflation or they you know bearish about Commodities because interest rates are keep climbing and they need they don’t want to put their money in something that’s basically you know has a lot of room to come off um I think that’s the only thing driving copper I don’t think it’s a demand thing I

think it’s just Traders being Traders well and that’s uh the old expression Dr copper I mean that’s that’s really why it is that way is it really is a good gauge on how everybody’s feeling in the market yeah feeling that’s it I mean if you talk to my buddy John gross I mean he’s showing you the inventory and the inventory is still coming off I mean lowest volume I remember in the warehouse I think he said it in his letter here the other day but uh and and still the pricing is just you know coming down with it but I’m curious in this latest like this last few weeks this last run if his charts have changed if his ideas and thoughts are changing but I don’t think I feel like it’s still in that downward Channel at least you know in talking to him and looking at his charts unless you get some sort of true meaningful consumption I think that’s that copper probably is and I don’t hate to I every time I try and predict copper I’m wrong so don’t you’re looking for a Trader you’re trying to trade copper Futures

if you just do exactly opposite of what I do you probably have more success um but I feel like with copper you know this trading range that we’re in right now is I think we could see that for a while yeah well I appreciate giving insight and then I guess I do have one more point and that’s that’s something we didn’t talk about and I I can’t hold out on a bullish point for you on this Friday out I would say uh the Futures Market on CME bushling you know I think last month we the settlement in November was around 365. the January number I think some of the last trades were around 4 10. so I’d represent a 40 to 50 bill from November to January that’s a that’s a pretty good bullish point and we’ve seen a lot of value in that throughout the last you know two to three weeks and in and I don’t I always say like you you can and I was having this conversation the other day as well you’re if you if you can say the Market’s up 100 bucks but if you only start at

a hundred it doesn’t really matter yeah you know so like I think Bushman got beat so hard right the last couple months that for to get fifty dollars back on on Bush Lane Futures is good I mean that’s a good thing that means maybe it did find where that uh bottom is right but I do think I feel like you’re you’re correct I mean when you like and you you and I’ve had this conversation before people are shredding bushling like it just throwing the shredder like you know try and blend it off I mean you know that there’s something kind of Haywire you know exactly but that’s a good thing I mean I think and ultimately I’m not opposed to just seeing these these kind of Market the pricing today isn’t it’s not the greatest but man we’ve seen it a lot worse so it’s kind of like we when you and I were talking before we started recording like seven percent interest rate right if you’re gonna build something or do something like is it does it do does seven percent feel good when you like a year ago or a year and

a half ago could have built for three like no it doesn’t it doesn’t feel good but is it better than 10 like yeah it’s a lot better than 10. so I think you just kind of have to say Okay like if we feel like we’re gonna be in this interest rate environment for a while looks like we’re gonna be in this pricing you know ban for a while you’re gonna have to figure out how to you know make lemonade out of lemons you know and it could be a lot worse you know recently you’ve seen it better but I I still believe that you can still make some money it’s just going to be can you get the volume to get through the system to actually be able to put any of that money to the bottom line or is it just going to cover your you know ever increasing expenses that’s a great great Point well I I want to take this time just uh to thank you Brett for for doing this it’s been a ton of fun you know over the last you know I think this is our sixth or

eighth call so far this year I look forward to doing a lot more in the future and uh thank you all everyone who’s listening it’s been uh fun to interact with you all and you know what man I wanna reciprocate say thank you like you make me smarter you keep me kind of involved in what’s going on on the market like markets I don’t really have a lot of exposure to or access to but and hopefully the people that listen to this podcast you get something you know for your market right like I I hope that by you know by having chat on here you know you don’t just have to hear me rant and Rave about what’s going on the west coast and what’s going on you guys actually get a little bit of you know overall market knowledge and that’s the that’s the name of the game and I couldn’t do that that’s that’s on you like you provide that information you provide that access so it’s a two-way street um we’ve got to have somebody to kind of Tamp me down a little bit like stop being so positive show

all the show everything that that could be going sideways in the scrap I love it but it’s been a good 2022 we’ll be back it’s on this um nothing crazy happens in uh in the hall around the holiday season but I’m looking forward to doing the same thing in 23 and you never know what we might come up with uh you know for 23 we might come up with another segment or whatever to go along with the Bulls versus Bears but I’m excited man I appreciate you it’s been a good 2022 and uh hope everybody you know had a great year and looks forward to a positive 2023. absolutely Echo that and thank you very much all right man have a great holiday have a great Christmas thank you