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 guys gals whatever you are we’re back um February Bulls versus Bears Chad’s still trying to rip the ring out of my nose uh out of the Bull’s nose but I’m gonna have fun I think I got a little fight fighting me this month so I’m excited I always love these these are like some of my favorite podcasts because I get to shoot the with my buddy so what’s up Chad what’s going on man well good afternoon bro I’m excited to talk about the February scrap Market how about you yeah I’m stoked man I mean I’m almost stoked as I was to talk about January scrap Market you know oh man should we start off this one too all right Brad just just be easy on us how are your floats for your excitement please there’s 12 months in a year and this is only month

two so it’s no what goes around comes around and usually usually comes around you know even a little bit uh a little bit more Fierce so I’m I’m uh I I made a post the other day um optimism you know isn’t delusion so I’m not delusional to the fact that the tide can change very quickly but I am optimistic that February is going to be uh positive for you know us little guys just trying to keep the lights on I mean I I talked to maybe 15 to 20 guys this morning and I heard 15 to 20 times the flows are just no no good no weather yeah it’s impacting flows I mean it does feel like January early was better weather at least in the midwest second half January not so much and I felt like beginning in January uh what especially the shredders were getting flows above what they thought the second half of January I feel like they did not get the flows above what they thought and stuff and you know whoever sold you know projecting tons or whatever they thought they could do I think that you know I

didn’t like one like I said I think I’ve said in the beginning of this in January I I there was one still meal I didn’t sell to just because I didn’t genuinely have tons to move right and so we’ll see and it’s not like I built up a bunch of tons this month to sell to them either so I my perspective on the flow is like you know I we’re not getting a lot of flow in Idaho it’s you know we’ve got some potential you know coming but it’s nothing to get you know so excited about that you’re like yeah I’m gonna be able to really Crush you know 2023 with a bunch of volume I think uh I think that you know it’s going to be an interesting year and you can see why the price is moving maybe not necessarily on demand strength but more on Supply and flow strength yeah I would agree I mean I couldn’t so do you want to hear the blue case or the bear case where should we start the bull case is there’s no scrap and that’s the case right the bookcase is China’s you

know reopening and we’ve been talking about this for months and I’ve always said like that’s the you know that’s the bull case for not just for Ferris but non-ferrous Metals as well um well yeah let’s start there let’s just start with Mr Dr copper yeah this is your jam what are your thoughts other than today and yesterday you know it’s been uh it’s been you know pretty it’s been a pretty rough go but generally speaking I mean for copper to hit 430 so early in the year I think caught a lot of people off guard um I know it caught me off guard I mean I sold you know I sell copper chops I sold at um one of my loads like at four 408 or something I was like oh yeah man price that thing let’s go let me see you know it’s like 418 I’m like well man you know which is 10 cents on say a couple loads is you know say 120 000 pounds 130 000 pounds 10 cents is real money so it’s like oh okay and then so the next time you know later in the month

I priced another load I’m like I get like a 425 or so forward I can’t I go back look at the sheet but I was like oh okay here we are like 425 like price that thing you know and then it looks like 4 30 something I’m like is like I can’t sometimes I can’t win for losing but then it came back around it’s not the worst you know worst ever but I didn’t anticipate that thing running that hard you never go broke taking profits as they say yeah man yeah it’s just it which it feels good when the when you hit the you know close to the top or the top but if you’re like when you watch it run wave past what you thought you’re like golly I could have just been a little slower on the trigger finger man I would have been all right you know all right so let’s let’s stay in the non-ferrous world so I mean would you would you is your thoughts that China’s really driving that copper price higher I think Traders are I think it was you know the market ran really hard

going into Chinese New Year right um and before and so I think people know that China is such a major consumer of copper so they know that if they’re going to truly open the the floodgates and say all right we gotta go we’re gonna we’re gonna reopen this country and we’re gonna stimulate this thing and make it run you know get the economy running again you know at a decent at a decent clip they’re gonna need copper you know um and so I think people are probably trying to front run that on the trading side which is probably what’s running that price maybe a little harder than actual demand I feel kind of like steel did in March of 22 right when people were trying to front run the you know Ukraine and you know Russia invading Ukraine I mean that that’s when you saw Bush lean and pricing just start running hard whether that was actual demand for people nervous thing we’re going to be able to get material or whatever it was Traders pushing that I mean I feel like that’s what you know attributed to that you know that run and

I feel like copper is kind of in that space right now where it’s maybe not physical demand like right now as much as people trying to front run it all right well that’s that’s good for perspective talk about Traders let’s switch gears to like Nickel in the stainless Market it feels like that’s that’s an odd duck right now yeah as far as Ferris guys give us the 4-1-1 and why why is the lme discredited these days well because I mean it’s I mean you look at the spreads if you’ve got a high 13s 14 nickel but stainless isn’t moving you know the price of 304 stainless you know is it moving with it you know you should be you know looking at a Dollar Plus stainless right and you’re not seeing those numbers so the I think with they let me you know people are worried about those guys you know it with it becoming less physical and more trading people don’t trust a number right they’re like so that’s just my my opinion that they’re like okay you’re trading paper you’re not really trading units you know that people are are

wondering are do those physical units even exist I mean is it can they even can you take delivery if you’re gonna let people off the hook on on their trades is it really um you know kind of creates an ill liquid Market to a certain extent where people don’t trust it and then I don’t know I I just that’s my that’s my like you know dumb ignorant Idaho opinion but I don’t I don’t know if if but as a reason that plays a role but as a recycler are you holding back home back volumes because of the price or are you still participating in the market no I’m participating I sold boards with the stainless um last week okay and at a at a decent number relatively speaking not relative to what the comex or what the um lme price is but you know at the end of the day like that’s what people understand about most and not not every scrap company everybody’s different because it probably depends on your volumes depends on you know your situation and what you have going on and for me I don’t necessarily like to hold inventory

if I don’t have to I prefer to just make my money and keep it moving now I will hold it if I feel like there’s a like a pricing Arbitrage to be had like where I feel like the spreads need to tighten up or you know I’ve you know there’s there’s an opportunity there like for example like I’m holding PGM units right I’ve been trying to take a bath for a while what are people let I’m not a non-ferrous guy what what is that I’m not going to Palladium rhodium there we go all right thank you so um because of our converter business so I’ll carry those units and and really I I haven’t been successful at it in the last few months because you know I feel like I post an article on LinkedIn you know South Africa is having all these power issues right I mean 80 of plaque what is it 80 of platinum Palladium for 40 of Palladium and 80 of rhodium come from South Africa well okay if you’re having power issues you’re having you know these load shedding problems and then the other good large percentage of

it comes from Russia well I mean if those two countries are responsible for you know a humongous percentage of those three Metals I mean Russia and South Africa very politically unstable you know or at least you know economically unstable countries right now and we get any sort of Demand on the automotive side or whatever I mean those three Metals alone should should potentially in theory have you know a good run have they no they’ve been getting crushed so like sometimes what you think should happen and what will happen isn’t isn’t isn’t the case so going back to your question like am I a holder of scrap in general not really unless I feel like there’s a certain unit that I’m like yeah I’m willing to carry that and see what happens for a while right but inevitably at some point you kind of have to be like all right I was wrong I was a bad trade you know but this is why this is why I love the scrap business is when if if you knew nothing about recycling you knew nothing about the scrap metal industry and you walk into a scrap

yard especially a smaller scrap yard and you meet the owner right and you’re and you’re you’re on what does that guy really know I mean if you just listen to what Brenda said there he knows the different several different markets right several different Commodities in several different areas of the world and he’s making business decisions like you have to be so informed and that’s why we do these charts that’s why we do this right yeah because it is this business is so competitive and if you can find the slightest Edge and information it is so powerful so it really just goes to show like this this industry is so cool in that that aspect so diverse right you have so many and not everybody’s I mean everybody you could talk to 10 different scrap Traders are in scrap owners yard owners Facility Owners and they’ll tell you probably 10 different things or like I’m willing to hold this on my market is this like that I mean you and they’re just going to give you anything and I’m not saying like the reason I love doing this is I could sit here and I

could do Bulls versus bulls you know like hey guys let me tell you why you guys should be bullish on this you know and I could just be blowing up home but the reality of it is like the reason we do this is hey I’m just going to give you my opinion it could be worth its weight in gold or worth its weight in donkey but it’s up to you to decide right like I got the reason I bring you on is because you’re 10 times smarter than me so you’re gonna give me the charts you’re gonna lay it out and you’re gonna say hey look you should be looking at this this is worth paying attention to look at this what do you think about that and then you’re gonna make me think now okay am I onto it or am I you know missing a boat somewhere and hopefully I’m not the only one hopefully whoever listened to this actually gets the same thing out of its value right like oh okay should I trade should I not should I sell should I buy should I hold should I whatever you know

but most most generally I think most scrap guys might pick an item or two or three Hold It Back see if they can make you know a little bit of money on the trade because we’re inherently like not gamblers that were inherently more risk we’re more risk uh accepting than other Industries I think yeah well I think I think at times you know if you if you buy a project right you buy material right you know it gives you more your your cost basis your risk is less right and so you you try to take advantage of that and when you’re in a any commodity market right yeah it’s gonna go up it’s going to go down and so you want to take advantage of those those we all get caught in down market so to tell you the advantages we’ve all been in that uh it’s me like it happens to me regularly everyone every once in a while I think I get a uh I think I’ll get a w and it’s never it’s never a uh it’s never as good of a w as I might have thought yeah all right

so switch gears I’m gonna tell you the bear case are you are you ready I got a lot of bullet points here yeah the yeah I’m ready for the bear case and I actually I I got my my calendar wrong so I got a little more time than I thought initially so which I don’t have time for the bear case but I have a lot of time I’ve set aside for the bull kids well this month it’s pretty tough to be a bear so I I I got a blank page for you that that’s it there’s literally not one single chart that I mean there’s a there’s some flat uh yeah there’s some positive yeah well oil oil today man was oiled down last few days I mean oil got has been has kind of taking a beating yeah but I mean if you look month over month it’s it’s it’s it’s it’s down this week but it’s not down month over month you know so you know I will say this the the one rarest point I think and and this you know I think there’s there’s two main topics when you head

into February trade we’re so calloused from the from getting hurt in March right traditionally February Market’s down and if it’s not March is is a pain point because flows start to get better at March April so I think there’s two real topics one is demand we don’t necessarily know that we’ll talk about that a little bit later two is hay flows the winter weather you know flows in general and then and then three I think there’s that is and I’ve I’ve been asked this question multiple times is February Ferris pricing going to be the high for the year what are your thoughts oh if I knew the answer to that I’d probably have a lot more money than that guy um I believe that it 2023 has a legitimate chance to be a good year if on the pricing side if flows are still challenged when Springtime hits which I believe they will be because I feel like the low hanging fruit got picked in 21 and 22. so as long as there is a medium level of demand from steel mills for domestic projects and the Vets slow the rates down so people

feel like they can they can do a project and they know what their rate’s going to be um I feel like prices could potentially be higher especially if we get any sort of dollar weakness so I predict moving forward that February will not be the high of the year now could March be off or April because more units become available maybe but if those units don’t magically become available like they have the last couple of Springs we get a super wet spring or something happens I don’t know that February is the top all right you hurt I mean I want to be optimistic and and we’ll talk about all the reasons to be optimistic for for February but mackerally it feels like you know we got another quarter uh quarter Rob what is a quarter of basis points on the interest rates I mean you think construction would slow down it sounds like Automotive targets are those keep getting rolled back you know later and later so those are some things that I think on overall that could hurt the overall demand side yeah and and then I I don’t know if you you

know I’m a I’m a Twitter uh keyboard Warrior these days but there’s some crazy stuff happening in between Russia and Ukraine and and people providing tanks and you know doing all these different things right so essentially if you if you recall War as much as I don’t want to go to Wars Russia or anybody China like I’m I’m a I’m against it I don’t I don’t know you know and this is my political beliefs or whatever you know like I’m pro-america I’m Pro us taking care of our own and like trying to you know keep our economy and keep the like the money in house right for lack of a better you know term um and you know in my opinion War has you know potentially to be positive for scrap you know and it has it has proved that out in the past right now if it disrupts the whole you know world economies and it creates all these issues then obviously that’s a that’s another conversation but generally speaking you know you don’t fight you fight Wars with with metal you know and you need it and you need to it

requires a lot and like I said that’s not my preferred method of growth and pricing and scrap I’d like to just see a generally positive economy that’s driving demand you know which increases Supply pricing so anyways go ahead I’ll let you do what you do well I just want to say you don’t like War because I mean you you you post uh your personality on LinkedIn and you’re you know you love America but you’re you’re a lover period I mean you’re you’re in the recycling industry you’re like a tree hugger you know you’re just a guy full of love I do I just I I want I want like I want us to be successful right like I want our industry to be successful I want the players that are doing it the right way to be successful I want the equipment suppliers that are doing it the right way and taking care of their customers to be successful like I I don’t know that you can do all that at the same time while you’re you know sending all this resources out of your country to fight a war that has been being

fought for so long and and it and I know that there’s a humanitarian side of it that you know people feel like you know an obligated obligation to step in but there’s also a lot of other stuff behind the scenes that that’s part of it and I just I don’t know that it’s necessary but it is what it is it’s not my it’s not my decision I got a deal like you or we just deal with the cards who are dealt and we try to make businesses business decisions around those those decisions that people are making yep all right so I got six bull cases we’ve hinted on two right we talked about copper I think that that really impacts especially the small yards I was seeking effect Shredder Shredder feed pricing by the the non-ferrous they’re getting out of cars and so forth when they’re shedding uh we talked about flows you know I think and just the the psychology of the the scrap dealer today is more bullish because flows are slower right yeah this is another one that impacts impacted by China in my opinion iron ore it’s up 110

per metric ton to 123. call it uh 10 11 that’s a big jump yeah it is and you know that’s that’s good for the you know that that gives more bandwidth on the scrap side right if you can’t no you know can’t melt cheap iron ore then that’s where scrap kind of secures its place in line right yeah well and on and on the demand side I don’t think we really know what February holds but there’s some there’s some hints and so a couple things one we see Hot Roll lead time on the Futures Market it went from 736 to 785 a month or a month that yeah that’s up a lot right and and I was curious we’ve seen these price increases in the last 90 days and they weren’t really sticking this this most recent ones they’re sticking and do you feel like they’re sticking because why do you feel like they’re sticking well I if you know if I showed you the lead time chart it went from three to four weeks you know last month we’re as high as five to six weeks now we’re down to five according to

August and so to me that’s a that’s a pretty good indication right if you if your lead times are expanding yeah and and we’re up to five weeks is lead time expanding because um because of the capacity shrinking like as far as available capacity shrieking or is lead time expanding because there’s that much more demand and it’s that time of year where say maybe people drowned out there you know try and like drive down their inventories going in December and then come January okay we probably now reorder up and try and you know get some uh volume back into our steel service centers or our manufacturing facilities or whatever that is and start the year back zero and go go again I mean is there any of that that plays a role typically in January on the demand side well for sure I feel like whether you’re in the scrap metal industry or any commodity industry if you know 20 early 2022 I think was good for a lot of folks but both steel mills and scrap yards you know the second third fourth quarter it felt like you’re just trying to hold on

to it right and and so um one way you still make your your Salvage years you get inventories really low you try to you know make your working capital do all all the right things and so I think on both sides both steel service center everyone through the pipeline was was trying to do that and that’s what in my opinion caused some of the jump in January and so there probably is some restocking you know last month we where there was rumor that there’s a lot of steel mill or a lot of the steel service centers weren’t doing a lot of long-term contracts they’re willing to to see how 2023 plays out and so it’ll be interesting to see I you know to me anytime I see that that lead time continuing to jump especially especially over six weeks or we get close to that man that’s there’s going to be some demand out there yeah that’s good that’s good for them that’s that’s a that’s a that’s a good bull point you know for for even realistically leading into you know where February is a short month maybe that does create some

carryover into March yeah yeah so got nothing you know we got through uh five and our four and five bullet point got on to the last one here and I think this is where we’re gonna need your help so if you look at uh turkey 80 20 you know they’re up let’s call it it was around 4 14 4 or 21 is what it was one when the January trade is happening it was in that range right and today we’re at we’re at around 425 426 we’re in there it will you know it can change right but that’s where it’s at today and so let’s just call it so if you look at the East Coast collection price on heavy metal they’re up 10 20 bucks and so that’s that’s telling and so in your area are you seeing uh export prices or shred shred shredders increasing their price to get ahead of yeah and part of it in our area too is definitely a supply issue right um there’s there have you know it the flows is tough so you’re trying to they’re trying to chase units harder right I mean um and

so we’ve got you know we got increased pricing in January we’re looking at another increase in uh in February at least in that I’m anticipating you know an increase definitely in shreddable material pricing so and I I and part of that is you know you’ve got there’s a lot of shredders out there anymore and they’ve got to feed them you know more coming online every year and that creates you know a certain amount of demand when you put a 20 million dollar 15 to 25 let’s just say 15 to 25 depending on your setup million dollar shredding system in it takes units to feed that bees takes units to turn those things on and run them and at some point you know you got to stretch a little farther or go a little farther unless you’ve got enough internal units to to run them you’re gonna have to just inherently if if there’s a lack of Supply they’re going to they’re going to push that price and if they feel like you know the last few months shredded pricing has been strong like relative to Bush Lane and relative to some other Commodities so

you know I think that they’re willing to kind of maybe even take a little bit of a gamble on hey let’s see if we can get these units in these slow months knowing that maybe when March comes in we can average down as far as average our cost down just because we’re going to take some more internal units or closer units right because it will have a we won’t be so weather all these weather issues yeah and what’s interesting is if you look at the like the East Coast guys there’s been a lot of a lot of volume I mean really if you look traditionally since the East Coast exporters have sold a higher Norm higher than normal um amount of tons than they typically do and so you know I think you there they got to get that flow and that’s why they’re they’re encouraging pricing but it also wonders like okay what do they why are they so willingness to take sales at these levels and so I I don’t know that answer or did they intentionally feel this this you know I don’t I don’t know that they know you know

people it goes back to the whole the whole conversation you’re never gonna go broke taking a profit right and if at the beginning of 2022 the first quarter was pretty good and then as you know Q2 or Q3 four rolled around and you got stung by thinking that you’re gonna get a bounce back in price all of a sudden maybe you take a couple of those lessons let’s just try and start this year off with some decent sales and if we bought and carried any inventory through the end of those you know we got a little bit of we got a little bit extra margin in let’s take the sale and get the year started off right so is that is that to me does that say that they don’t anticipate better pricing no it just says hey let’s take some margin let’s start the year off with a victory let’s make some money let’s see if this ball keeps rolling or if you know the last sale was the best sale type of deal you know right so well that’s a great perspective I appreciate that I feel like we should be like

college game day and have like our have you put like on the bull hat or the bear hat you know like the headset the big ass ring hanging out my nose like growling at you like theme coming out I’ll look again I won’t turn the uh I won’t turn the temperature on in my office it’ll just be steam coming out my nose like a real bull well you’d definitely be putting on the bull hat uh headset after this this combo and it was it was a good one and you know hopefully I can find some bear points next month yeah I mean I think the bearish points are like I I was telling you earlier right I posted that that post and it was uh you know optimism you know isn’t delusion right like and I say this cautiously because I am an optimistic person like don’t be delusional to think that the price of scraps going to 500 a ton in March or April right because it I I don’t think it is but I do think that you know whether it’s Supply or whether it’s China opening or turkey being aggressive on

the pricing or whatever it is um I do feel like there’s there is reasons to be optimistic about certain Commodities about certain markets and it’s not a it’s not in order don’t be delusional about me making material move don’t be delusional about taking some profit and keeping your business rolling and trying to sit on everything and just ride the wave right because it doesn’t feel as bubbly as say a 2021 when everything is on a rocket ship right where you’re like man I could hold this a month and I’m going to make more money just felt that way that’s not the feeling I’m getting in 2023 I feel like we are in for a heck of a roller coaster ride you know potentially depending on what all these external factors are you know depending on dollar strength fed raising the rates because aren’t losing that conversation later today yeah that’s a big piece of this puzzle because stock market and Traders and whether they move into Commodities or out of Commodities or back in stocks like there’s so many like parts to navigate but just be smart about how you run your business like

take profits when you you can make some don’t be greedy um you know be optimistic about the future but don’t be don’t don’t think that it’s just going to be you know roses all the way through you know like they’re going there’s a lot of thorns so you know I think that’s the key and if I could tell anybody like my piece of advice is you know like do the right thing you know take care of your customers and you know if you got an opportunity to make a little bit of money don’t look a gift horse in the mouth I love it great advice and I I would I would agree with everything said there for sure all right man always good to talk um Chad will if he gets the opportunity he’ll post up some charts um and uh we’ll this podcast should be live tomorrow I want to get it out early in the month so recorded here today we’ll get it out tomorrow and uh and I would assume the trade will probably be in full force um probably tomorrow maybe in order you know maybe they’ll try and drag

it out I feel like there’s a little bit of room for it to come down going into uh Monday early you know which would be like what does it say first second through like the fourth fifth of the month yeah it seems like we love to trade scrap on Fridays for whatever reason here in the Midwest so yeah so we’ll see that could happen in the next day or two so either way um always fun man I love catching up and uh until March have a great month talk soon all right bye