thank you 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 what’s going on everybody another version another month here we go April 2023 Bulls versus Bears I got the manchad is going to break the market down for us and uh tell us all the good news that’s going on out there and on the fairest side of the scrap scrap business and kind of give us the uh you know give us us poor scrap guys you know some hope that 2023 is going to end with a uh with a bang and not a bust so let’s get this party started Chad what’s going on another day in paradise how are you sir I’m good I’m good just uh living scrap dream like we were just talking about just getting up every day somebody that that’s the old saying uh sometimes you’re flush and sometimes you’re bust but you know you get a new hand and uh go

again I I you know I see in Cleveland Cliffs today announced another uh Hot Roll price increase now at thirteen hundred dollars a ton so is this month 1300 but it’s another 100 right oh another hundred another hundred that’s is that good baby I mean I was just thinking about your Mimi like we have you know it’s it’s all those all those guys laughing you know I got another one dude I just been saving you guys I got a heater coming because if it if it was down pricing um down scrap pricing and some some up uh new steel pricing yeah I’m just just look at my chaps yeah if you don’t follow Brett LinkedIn I tell you what you’re really missing out in life you’ve found some good meme some good memes you know that I find scouring some of those uh those websites that most uh people probably wouldn’t want to go check out but I really enjoy it I enjoy a good laugh you know a funny story is I’ll be sitting on my on my on the couch with my wife and I have put the kids to bed and

uh dude I’m like I love to cruise the internet like read like the financials and just see what’s going on in the world and then I’ll start going down like a rabbit hole of just like you know darkness and uh and so then I’ll come across these memes and I’ll just text into my wife who literally is like sitting like 10 feet away and I’ll just text it still be like ah what’s this look at her phone she’s like really and I was like hey I guess you don’t find that as funny or as offensive as I find it she’s like no like all right good I feel like I but I’ll keep sending them that happened to me this week I was watching a little uh a tick tock or something I was like literally like busting laughing out loud my wife was in the other room and she’s like what what is going on yeah so I said it to her and she watched it she’s like you’re an idiot that’s all it was yeah I know I know I I get called that regularly but she’s like I’ll laugh significantly harder

at my own jokes probably at least the that I send her and then she’ll get at him but that’s just the way it is man that’s uh that’s how that’s that’s what I like about it keeps me uh keeps me on my toes I keep her on her toes and uh we make a good good team effort I love it hello well let’s talk about the market man what’s uh what’s I like the fact that that Cleveland Cliffs feels like there’s enough room in there to to pick the pricing up so maybe you know at least in the midwest it sounds like that there’s uh you know there’s some opportunity on the scrap side so let’s talk about it yeah so on the hot roll side what’s interesting you know last last month I I think we’re around 10 50 the the price increase was around 1100 bucks you know month last month so now we’re at the price is probably close to 1150 1200 and then the new price is 1300 so it’ll be interesting to see um if it sticks and and when you look at lead times um so let me

see if I can if you look at lead times it’s hard not to argue that they’re probably on the right track yeah are you still looking at that four toilet you said it was four to six weeks and then and now that’s pushed up to like nine weeks yeah so last month at this time we’re we’re set like seven to eight weeks right now we’re at nine to ten and I’m gonna tell you when you’re out nine to ten weeks I mean think about in 10 weeks from now that’s couple that’s two and a half months right yeah you’re you’re talking a long time and so wow if you’re in the purchasing side and you know you can’t get anything from between now and the next 10 weeks I get it while you’re trying to trying to push for price increases yeah well and and you know we were just talking about this in uh our our Boise production meeting this morning and and while flows have picked up a little bit we just I mean we haven’t had good and good weather right it’s April like we got Easter on Sunday this Sunday

right yeah and I’ll be damned if I mean I was I was taking my son to school this morning and he’s sitting there in a hoodie sweatshirt and I said dude where the your code and he goes what do you mean Dad I don’t need my he’s in third grade he’s like in the Sun’s shining but it’s not it’s not one and she goes oh it’s nice outside I looked and I pointed at the at the camera or the the screen on my truck I said but it’s 31 degrees I’m like it’s 31 degrees outside like it’s not I said the sun is out which is a good thing you know at least it’s not raining or snowing on that’s what I said but I’m sorry but 31 ain’t warm at least not where at least not to me so our highest so I pulled my weather app and I’m like oh hi today it was 43. you know like I’m sorry but that’s not warm and that doesn’t help the scrap flow whatsoever you know I mean they got on Friday morning here they got like three inches of snow in town I’m

like geez this net hasn’t ended well and I think that’s a good point that’s something I would like to add to my charts I just don’t know don’t I don’t know what what how to add that correctly but maybe we look at like the last 30 days of the weather because I think that can have a big component whether both the spring and fall or winter combined is is if you throw one bad ice storm one bad snowstorm one bad whatever in there and it reflects effect scrap flow for two or three days or a week even and that’s gonna have a very big impact on in transits and in order status and and what our Mills uh what does that mean for Mills you know what’s crazy is um so I went when I when I got done with the when I was done under my undergraduate I went back to school I took a year off and I went back on my masters I did as part of my senior project I did um I ran it out for two years and I did a whole like thesis on does the temperature

outside affect the flow of scrap that was my project right like and and like basically what affects volume more price or temperature so I like pulled all the historical pricing all the historical data on weather and all the historical data that I had for us internally um on Flow side right which we we are bigger now than we were then because that was 2005 6 somewhere in there and so we we buy much more scrap now today than we did then but it was super intriguing I might have went back like four years I can’t remember but it was a hell of a data set that I had to like put together and believe it or not like as much as I preach about you know weather and and I and I didn’t I should have included precipitation or something but like that was a little harder to deal to calculate in but I just did temperature and then flow and and then pricing and flow and really what drives scrap pricing or drive scrap flow is scrap pricing money yes 100 show me the money that’s what drives crap flow and obviously snow

kind of puts a kink in it and rain and mud and makes it tough but money usually brings scrap up the sidelines one way or the other um and usually when the money’s good that means there’s a whole whole host of other factors like the economy is usually in decent shape um or at least you know you know good enough that manufacturers are producing scrap demos going on all that but yeah for whatever it’s worth um I think I think there’s a good lesson there I mean I think the economists would say well that means you have an elastic commodity right yeah and meaning the higher you pay the more you’re going to get the lower you pay the less you’re gonna get 100 percent well you did mention flow so of course I I gotta I I’ve been thinking about this I’ve been thinking about this a lot so I want to just point this out so I went back and you talk about 2005. let’s see I can move this okay go ahead so this this chart we’re looking at screwed steel production and it’s U.S production and Chinese steel production

okay if you look at the Chinese steel production and charts going up and to the right I mean we all know that right that the Chinese are producing more steel today a lot more still like four times more steel than they were in even 2005. so so the question and then if you look at the U.S deal production rates it’s kind of just the inverse not quite as deep but but there’s a decline Trend there and so I think when we talk about flow we really have to say is flow bad compared to 2005 it should be right if you look at this chart because and and I think that’s even myself I think I get lost into okay it’s flow bad yes but what is it year over year or anything a lot of times we just thinking month over month right um but year over year is another another correlation but but in general I think what I took away from this chart is pre-2008 when there was a lot of when the the U.S steel production was higher you could say some of that was blasphemouses of course

but doesn’t use scrap but it almost feels like there’s there’s probably more scrap flowing in that time period because there was higher demand and you also are coming out of say 98 through the early 2000s of I mean down scrap pricing I mean scrap pricing really didn’t really hit us decent stride until I would say probably oh five six like and actually start picking up some steam but as you can see like you know on this on the on the U.S steel production like um it was those if you I mean there’s a it’s a pretty if you could probably draw a line right through the middle of that 8 000 right and and a little bit above a little bit below you know at certain times but I mean if you think about it I go five is really when the actual pricing of scrap actually especially on the ferris side actually kind of started to see some momentum climbing um obviously then you know going back to 2000 and 2010 end of 09 coming back into into 10 and then China really kind of went hard and started ramping it up

and that’s when we got that good balance into like 12 13 somewhere right um because there were 10 well 11 12 were pretty good years um 13 wasn’t bad and then 14 was a terrible year 15 was pretty you know those are pretty rough the death by a Thousand Cuts type you know it’s amazing it’s amazing that you can see it what years were good what years were bad based in the scrap business in their cycle business by looking at the U.S steel production right and so and I don’t know I think this chart is pretty interesting and then yeah the China component I think it’s Tesla tells there’s a lot of stories there well and and that’s I mean and you have to think I mean realistically the US hasn’t been a big you know Ferris exporter to China for for a while now right I mean I mean there but it was a big I mean we were big exporters of scrap to China and it feels like that has kind of started to go other directions and I I guess the the biggest thing or not you know when you

think about China and overall steel production is when people say my flows are down well if you compare this if you look at this chart and say let’s just compare two thousand two thousand two thousand eight will say today yeah we’re off 25 yeah and if you even compared to 2021 if you do the math it’s 20 production is off even compared to the Pica 2021 so we went down quite a bit here and I think that is something that is if you look at this route the price of of scrap I would I think we talk about scrapping elastic scrap is pretty high price for what production levels are at today yeah which then that that gives you the the conundrum of is the price of scrap going to come down or Bryson is still going to come down like something’s got to give right if you if you say and I I I believe that the price of new steel has gotten maybe a little bit ahead of itself you know just my opinion but those lead times probably tell you different yeah um that they feel like they can support it

because they could support the pricing if the lead times are stretched out that far you know there’s something there maybe um the actual price of scrap should come up should chase that price up just because they’re the of the supply and if you have if you’re us still production is down that that’s going to tell you there’s there’s less Supply out there well I think I think here let’s talk about Supply here okay you’re not gonna like this chart this is this is a bearish one probably the bearish chart I got you ready what’s your job that’s all right the job is to to tell me that uh I’m wrong it should be it should be lower and I’m here to tell you if I subscribe should be higher I think I think you can you can help us out here so we’re looking at the heavy metal uh turkey consumer price and it was at its peak it was at 471 uh last month today it’s at 447 we’ll call it it’s off 24 a ton and while that that 24 means something I think if you look at the number of vessels

transacted off the east coast mean something even more right and and they had a a lot last month and there’s there has been some cargo has been booked but not as many so I I think when you when you think about this and I think you and if you when we’re looking at this chart we’re I’ve actually put three three different lines in this one is the turkey heavy mount one is uh New York’s dock price delivered export yard and the other one is the heavy metal delivered national average consumer and so if you if you look at this you can see that dock price they’re they’re hitting that just as hard as as the the turkey price so that tells me that the the consumers um in the U.S are going to be tempted to want to push this thing down because they’re seeing some export pressure come off the table yeah they’re seeing some relief right they’re saying okay like we don’t have to because on the domestic side what are they going to do they’re just going to pay you just enough to not export it right it’s not I

mean they have more room they have margin in there I mean if you’re a thirteen hundred dollar pot roll there’s room to pay you more on the margin side it’s just do they want to uh um do they want to or do they need to right yeah I think that’s good but it’s interesting when we talked about two very bullish standpoints and we talk about Hot Roll taking off you talk about lead time’s extending uh we didn’t we I didn’t show you this chart but crude steel production is actually up month over month was 74.9 now it’s at 75.4 so you’re looking at basically a higher demand higher pricing higher lead times and you know I think you talk to majority um scrap Traders they would say it’s all about demand demand demand well I mean Friday we’ve seen some Mills actually canceling orders and so if it’s to demand demand demand you really gotta look at all the equations and and it doesn’t sure doesn’t feel like it’s only demand driven now we’ll find out but but it’s an interesting time to ponder and wonder all the different aspects what makes

this game so much fun yeah I think the biggest thing is I mean like you said if they’re canceling orders they feel like they can push it down right or worst case scenario they I mean I also don’t think that they got their they’re not canceling orders if they if they didn’t get the supplier people didn’t deliver on the contracts they sold so you know I think that has to be taken to considerate consideration as well if we want to sit here and bang on Supply and flow and this and that like the pain on the mill you’re going to depending on what your situation is are you um are you counting on there not be enough Supply coming into spring when usually notoriously supplies you know chains start to loosen up a little bit come springtime you know yeah and that’s why I wanted some Mills are counting on that you bet your ass I think I would agree with that and I that’s why I really want to look at that crude steel production over a long period of time because I feel like if you just look over a month or

a month wow our demand’s actually higher lead times are actually higher high roll pricing I should higher and but then if you look at where we’re at year over year well you’re off you know four and a half five percent and you’re like okay that’s a little bit more interesting picture and what’s crazy is I don’t know if I would have predicted that U.S steel product I mean we have a lot of Maintenance outages right now and I would say all this is very Regional because you’re seeing yes some regions have more demand in some regions have a lot less demand just because of who what Mill is having an outage and it goes back to what we were saying I think last month is the Mills that you’re selling to what do they produce you know um are they rebar Mills are they being played you know structure like what are what are they are the oct Gmail like like it depends on what are they producing and what’s going to be in demand at that point right and I think that’s something else has to be taken into consideration I do

believe this though and you know we have a pipe business and so we kind of pay attention to infrastructure infrastructure projects like what’s coming up and what’s and I strongly feel and what I mean I’m no like Nostradamus or anything but I do feel like the amount of money is coming into the system on the infrastructure side for bridge work pipe work just infrastructure in general I mean that bill got passed in like two years ago or something like that and those money is just finally starting to hit the books right so the amount of like potential infrastructure projects that are that are out there that are trying to you know get through all the red tape and all the to get actually done I mean that’s gonna create some new steel demand to what extent to you know that that you know that’s that’s still yet to be determined but that’s something that can’t be overlooked and when you talk to people about say trying to buy like cash like ductile cast pipe you know the lead times on that is crazy still right I mean you talk about lead times like ductile

iron ductile cast pipe is stretched and then you’ve got depends on what you’re you know what it is but I mean if you’re talking about like you said say say nine to 11 weeks lead time now on pot roll right yep I mean dude it’s not getting any easier to get new steel so whether that’s outage cost or whether that strategic outage cause where it’s like yeah we maintenance here maintenance there stretch the lead times out drive the price up you know it is what it is but I mean the you still you’re still if you still want that material you still got to pay and you still got to wait oh well any even furthermore on demand side is you look at Imports month over month they’re down you know 13.6 percent year over year they’re down I think nine nine point eight percent it’s almost 10 percent so you have higher lead Times Higher prices um remember this Market is a has new capacity too right like yeah there’s Mills that added more more steel production over the last you know 12 18 months so it’s it’s really quite and then

I’m a student of this Market because this one is is I think is rare in that you have higher demand and you have Mills canceling orders on the scrap side so so a really compelling Market to learn from that’s right even more capacity coming right which is something we’ve talked about previously is you know the middle capacity is actually coming online in the next year or through to three years right is is going to be you know something to keep an eye on and kind of trying to understand what that’s going to do to scrap flow and um scrap pricing which obviously all is dependent on the demand side for sure but it’s going to change the direction and flow of some scrap for sure but I think what we the wrap up what we said there is is demand’s hot on Hot Roll yeah but also there’s other products like so when I think of duct Island I just think is a very labor intensive and no one lives in a vacuum labor is hard to get everywhere including if you’re a ductile Foundry or a scrap yard and so I I just

feel like demand should Fair be fairly steady this this summer which I don’t know if we all predicted right if you would have told me that hot roll is going to be at 1300 a ton or twelve hundred dollars whatever you want to call it today and we have we have this new capacity and and shredded Auto shred our bushlings out where it’s at I would have said wow that that’s the steel mill is still still maintaining a pretty healthy margin I never would have predicted Hot Roll would would be back up at these levels so is that inflation related you know which we can we can look at the oil chart right well um after yesterday’s news on cruises today yeah so at one point I haven’t looked at here the last hour or so but that thing took a pretty healthy run this morning after yesterday’s OPEC cut by it was like a million barrels yeah so it just feels like you know there’s a pretty much 100 correlation between the price of oil and inflation and so if these guys if the OPEC has made a commitment not to increase production

for the balance of the year I mean it’s hard not to think we’re gonna get back in the in the mid 90s at least lower 90s on on crude oil so that should fare well for for steal it should fare well should feel Fair very bad for inflation you know so well and I think that’s why I was reading an article this morning and they were like the OPEC and you know and that combined with Russia them promising and to make cuts and OPEC it was a million million barrels a day right they’re planning to take out the system yeah yeah so that’s a big I mean you’re talking about I mean that’s that’s big volume and that’s going to put the FED in a in a predicament of you know of of rates and where to go with them and where to raise them but I mean if that doesn’t go to to tell you like how up things are right now if like if we could just grow our own and just and if you just put that into place and stop trying to go green energy tomorrow and just make the

transition I think you could really do some damage to inflation without having to Jack the rates to the Moon right if you could figure out a way to keep your thumb on the oil price by being a net exporter instead of an importer and really um drive that oil price where you want it to go versus being driven it just feels like you know there’s there’s a lot more opportunity but I’m no damn Economist I’m just a snap while you’re in Idaho trying to process and self-subscribe well if I’m gonna put my I mean even my vote this you know this next presidential election I’m gonna tell you my my number one priority is fiscal responsibility like if we keep spending and we’re like too much we’re right I mean we’ve been doing it forever we spend more than we make right like we are getting to a point where we cannot I mean you have the chairman fed saying yes the banking system is okay our Reserve currency is the number one in the world will have no problem two days later when the Top 20th Bank fails right like is he

clueless or is he lying to us right either way I’m not real comfortable about that so I don’t believe that those guys got to the position of their actors included I’m more against it you got to the position you’re at because you’re a good right you know like that’s the way I mean the way I live my life is I mean you don’t get to that spot if you just don’t have a clue what’s going on you you get that spot because you know how to uh to with the best of them and I think that that’s the difference well that’s what’s weird is I feel like more than anything that that’s that’s keeping scrap at its level instead of continuing to ratch up is is the psychology of like I think a lot of a lot of scrap vendors right now are scrub dealers are not wanting to hang on to tons right yeah 100 and so when you have which is a great Point yeah yeah is is and go ahead go ahead and finish well I like if I mean if I were to even in March or even in February

you know it’s hot I mean lead times around nine to ten weeks I’m telling you that that’s not going to just change overnight right we know that and so we’re talking almost 10 weeks from now I mean uh April May June 3 almost into July like so we know the demand’s gonna be well through like to July even it’s so it’s a summer which is you know typically you have more shutdowns and all those things they’ve obviously pulled those ahead and so in most times where most atmospheres when you just look at the data you’d say most people feel pretty bullish right because there is this demand that we know for sure and so that’s what I think is interesting in this market because of I mean export pricing is real not and if and if and if those million and a half tons don’t go export let’s say only a half a million tons go export and those million times got to come Inland that’s real and that’s going to put some pressure on the market yeah and and especially in the secondaries but but in but in but it’s just interesting that

a lot of people are Gonna Cancel orders and do this even with that kind of demand out there it’s surprising to me well I think it’s a test like to a certain extent as well like do you have the wherewithal or like going back to the psychology of of it right and it’s still I mean even though 2008 is was you know 15 14 years ago like that psychology that market of you know from boom to bust and even though we wouldn’t I mean it doesn’t feel like you know it’s a boom to bust scenario because you’re not necessarily booming on price today compared to then but I think it’s it’s kind of changed the way people feel about holding tons and you know it’s changed the market overall with all the consolidation is you have these businesses that are built for throughput and production and it’s not necessarily a uh a sitting man’s game anymore that they say it once was right where you oh I’m gonna see what the market does next month and I’m gonna move a couple thousand times next month or you know I’m gonna sit on an extra

10 000 ton and just see what this thing does going into may like everybody’s built a system now where it’s kind of just in time I mean if you think about just-in-time manufacturing I think it’s it’s also that’s kind of went through the the scrap industry into just in time processing right so it’s like you’ve built your transportation around it you built your processing capabilities around it and if you have to think I mean in the very recent past say the last I was having this conversation with our guys a weeks ago uh production when going into a year like a 21 or 20 you know it began 22 when you’ve had a significant amount of scrap coming through that you had to process and get equipment to process and trucks to inbound and outbound and all of a sudden you’re sitting there with that much equipment in a down 30 35 flow yeah you’ve got you all sudden have committed commitments to move scrap and to crack you know to keep the to keep the wheels on the bus right you have all this equipment ready to go so you you

went from just in time delivery on equipment to just-in-time Scrap Processing to get get it jammed through the system so I uh I think those two go hand in hand and you know people aren’t just sitting around on 50 000 ton piles waiting to see what the market does anymore right or on the smaller operator side a thousand ton or two it is just kind of play it by year well well I think and I’ve I’m in this boat right so I was preaching myself here in that um at the beginning of the year we had um I was talking to some steel buyers and I was like you know where where where do you see Hot Roll bottom out and it was maybe around seven eight hundred dollars at the time and they’re like I’m not a buyer until it gets down to five six hundred that’s where before where before this run up that that’s what I’m gonna that’s when I’m gonna step in and really put the penalty metal to get long okay great never got there never got there right and so and I was kind of like

why wouldn’t you like we know at that time I felt like 2023 was gonna be volatile so when you talk about thinking about asymmetric rest reward I thought well there’s a chance this thing can go up three four hundred bucks and but the chance going down maybe 100 so why wouldn’t you go why wouldn’t you get yeah just take yeah make it happen your risk on the downside is less than your potential upside right well hindsight obviously I never would have predicted 1300 High Roll but we are we are but I think to put this relative to the scrap industry in 2015 I remember buying and selling Auto shed for 165 dollars a ton yeah when you think about equipment cost and you think about people cost and you think about logistic cost like I have to remind myself too like and I think we also remind ourselves like 165 shred is not going to come anymore it just it’s like 500 Hot Roll is not it’s not sustainable right and so there is is is that new bottom that we’re all thinking of because we haven’t really experienced inflation like in my lifetime

I’ve never experienced this kind of inflation and for a lot of us out there we haven’t right unless you’re trading scrap in the 70s or 80s and so maybe maybe that 350 shred Mark is now the bottom and so while we get scared when we’re at like a 500 number shredded was pulling out Scott is maybe our downside risk really isn’t as much in our it’s we’re referencing it back to like a 2008 or a 2009 but when really when you think about your equipment costs your people cost your logistic cost that number is just simply unobtainable anymore yeah it’s it’s definitely and if you do get obviously I said if you do get to 165 shredded we have real big problems as a country we have as an economy right like like there there is a lot a lot going on and I always figured that 24 would be the volatile year right would be the the messy because it’s the election year and so everybody’s trying to figure out the position you know to move forward 23 it may have felt like volatility you know we going into this I mean we

didn’t real I didn’t think that 22 would fall off the edge of the the mountain going into it but it you know that those prices came down in a hurry and then coming into 23 to have like was it four consecutive four consecutive up months right um call in December you know December 22 and up month I think that’s that I wasn’t necessarily anticipate that but I I do agree with what you’re saying is if you have never experienced inflation like what we’re experiencing today and I can honestly say like I haven’t experienced that kind of inflation I’ve experienced hot you know scrap markets like going in 08 but never on the inflation side right um and I think that’s where we have to get our minds what is a new truck cost what’s a new material handler cost what’s a new you know I was talking to a guy um this last week who they have a shredder and he was like what’s the most you’ve ever paid for a material handler and we were kind of going through it and he’s like this is what we just paid for the news material

and I’m like God damn man and he goes yeah so I was and he said I was talking to my dad and we were going through the numbers like what’s your what’s your what’s your how many tons do you need to break even he goes and I was talking to my dad you know the number used to say be 10 000 ton a month or whatever to break even now we gotta do 20 to 25 whatever that is right yeah and he goes so now I mean that we have to do that kind of volume to get through to break to to get to a break even right at today’s pricing so it’s a combination of higher equipment labor you know facility you know costs plus you know you’re you’ve ramped up to a certain capacity and now you’ve got to get there you know by hell or high water well then I think that’s going to be an operational mistake a lot of people can make I I see this in my own family business if you you know they they do a lot of my my father’s in the oil business if

you if he buys and sells oil on a like oh I gotta make so much cents per pound because I know what my truck cost well you cannot operate on per ton or per gallon or per per barrel you have to operate on a percentage because if you’re not looking at that percentage you’re quickly going to get ate up in my my opinion yep yep I think that’s and like one thing I love about this and I just have another conversation with another guy I said one thing I love about this industry is there’s a thousand ways to skin the cat right give me the guy with all the old shitty stuff that you just barely keep working and you know but you don’t have any uh you’re a nut to crack on a monthly basis it’s just whatever your repairs and maintenance all right and you know get it through the system whenever you want and there’s the guys that want nice stuff they want efficiency you know every two years three years they’re trading it out and they got a certain amount of volume and know they need to hit and they

just get through it and everything else is great and neither one to me is right or wrong it just depends on how you want to as an operator what makes the most sense for you for your Geographic situation for the competitive landscape what you’re in and then you just say you commit but you can’t ride both sides of that fence you can’t be the guy who runs shitty stuff but then has you know have to crack this not to get you know like you got to pick a lane and be good at your lane and but there’s a lot of different ways to do it and um but I agree once you once you figure out your percentage and your margin that you need off of XYZ volume you either I heard it said one time there’s like there’s only one way to you know to beat a you know a tough market and that’s to find more revenue streams right so in me looking at it and this hasn’t I love to do is crap but me looking at my business mind is if I feel like the price of scrap’s gonna be

uh so so whatever volume wise I’m always on that I’m on the hunt for a revenue stream right so where can I pick up Revenue to support you know a slower Market or you know uh especially in a cyclical industry like scrap where you can have some you know some some good highs and some some deep lows but I’m always saying okay where do I where do I pick up Revenue like that’s what I’m because then that allows me to sustain a little bit longer and if you don’t have that ability then you better right size real quick or you’re going to get folded up real quick but I think that’s that’s an amazing lesson I think that goes with with every every business that’s cyclical whether it’s the railroad industry the scrap metal industry the steel industry any commodity really right yeah is when times are good you cannot you can’t spend it all you you got to find other ways to of income you have to find other ways to diversify you almost have to be when you’re a Commodities operator you almost got to be like that’s part of your strategic

you almost be like a hedge fund how can you control your risk right from when this thing does turn and become a liquid how do I how do I keep going here yeah 100 percent all right so I we talked a lot about uh obsolete scrap or cut scrap but we haven’t really talked about prime scrap which has no correlation with what turkey’s doing or what what the export Market’s doing uh that’s more correlated with with uh scrap substitutes right so this one last chart I have for you that I’ll leave you with the bullish bullish standpoint that’s pig iron pig iron is up 535 to 555 uh four and a half four point seven percent increase or or twenty dollars a ton so when we think about prime scrap this is where in in high demand this is where you could see um this is definitely more bullish point when you look at think about those two aspects well I think I mean and that’s still very Market driven very geography driven as well right I mean markets that that need and that kind of Thrive and the certain amount of that Prime

scrap versus say you know other markets that are more export driven or whatever that aren’t necessarily um you know pricing their pricing isn’t derived or pushed like I’m just thinking even for Mike myself right like I don’t see a ton of prime scrap because I don’t deal with it because the meals I sell to aren’t big buyers of it and if they are the premium isn’t so crazy that it’s worth you know and I think it’s just a volume thing but we just don’t it’s not a big driver Market mover for our geography now Indiana Ohio you know Michigan I mean I feel like those are big Prime scrap you know States and areas so that’s going to be a key indicator for for them and and material they’re they’re purchasing especially on anybody that’s using formula pricing to purchase scrap and depend on how you’re tying it up and you know how how does your sales track that because I know that’s like a big industry you know oh I was like a quagmire or like an issue that people like have to deal with right is hey we’ve tied this formula for

three years to to this pricing and it’s not accurate or it’s not reflecting where the market should be or vice versa right um and that’s I think where those charts where you’re showing kind of come into play on the purchasing side yeah no doubt the I would not want to be not not in the index business that’d be a challenging industry at this stage oh man it is I mean and you’re and you’re you’re kind of just beholden to the quality of information that you’re getting like who has a horse in the race and are they betting it’s like inside bedding on your own horse right like you know you know your horse has a broken leg but you’re not telling anybody that because you’re trying to you know what I mean it’s kind of uh well I’ve only been I’ve only been around for a decade and all the consolidation that’s happened has been unbelievable and so when you have less less less even if you have this same people feeding the information but less uh points just because they’ve been Consolidated you know how are you supposed to do that yeah well

and and then you have to say people that are feeding information also on the buy side yeah you know so it’s like right I can see like there’s you know there’s a lot of conflicts of interest in there and then nobody wanted to share pricing or whatever or at least you know you’d be a very real comp comfortable and confident that I I I’ve had this this conversation with Sean a lot and uh Davis index and and you know he and it and you are beholden to the quality of information you’re given because that’s what you’re reporting on right so you better have good relationships which goes all the way back to our industry and having good relationships and people you can trust and people you can count on that to help give you some guidance that’s that’s uh worth a hey I’m with you and I was actually talking to somebody today who’s asked me what I do and I was like and he didn’t really get it and I said like when you whether you’re a buyer or a seller of scrap it’s you really it’s sometimes you’re the sales person sometimes

you’re the purchasing agent sometimes it’s just the opposite right it really depends on the market and I feel like you need to have it’s like a real estate broker like you got to be that that grease between those those gears because if you don’t have good relationships it’s just going to be a very challenging industry for you I love it so what do you do well that’s why I said I’m in the joke business we’re in the Recycled metal industry recycled industry recycled metal and then A lot’s changed since 2004 when I met my wife right like which I do believe like let’s go let’s go down that path real quick before we call it a wrap right like I’m notorious like for the word scrap I love it I think it it exemplifies the people of our industry and the grittiness that you have to have to be in it because it ain’t easy the markets Change Daily monthly weekly whatever and there’s a certain amount of grittiness you got to have whether you own your own company you work for somebody else you’re a part of it you know you’re in if

you’re in the industry you got my respect because there ain’t nothing easy about it and I know that people you know but it truly is recycled material right and I know Saco hits on this hard and Israel hits on this card and I do believe in it so for me I’m never going to change like scrap is life that’s just the way it is my podcast is what it is and some days I drink beer today it’s sparkling water but it because that’s because it’s noon you know but let’s be honest let’s be honest just I mean this is red versus blue I mean this is ESG verse yeah this is like America versus a bunch of um so but for me like I do believe it’s important to understand that you know scrap is recycled and vice versa right and there’s a lot of ways to skin that cat but we’re all here for the same reason you know we’re here a keep the lights on B to uh do what’s right and and I think that’s why they can both coexist but you know recycled recycle Ferris recycle copper recycle brass recycled

tires recycled whatever you name it like we’re all part of it you know recycled new steel however you want to do it um but it’s I’ll I still like the word scrap I think I think you know no matter what industry in there’s a one if there’s one correlation between anybody that’s successful in any industry to me it’s the word grit like to be an entrepreneur like if any I feel like you know this morning anybody and I just grew up in it as a kid is what my what I’ve seen my family go through right yeah no one no one would sign up for that if they did they truly like it’s not fast cars and and you know in big watches it’s it is a grit and that’s the only way you survive yeah you survive if you do make it yeah you do I mean and and you do get through it I mean like what is that old saying like Choose Your Heart Right like you’d be hard and broke as sitting around or you can be you know have to deal with some headaches of own your own business

or or managing a bunch of people or whatever like you just choose your heart but it’s gonna be hard and if you don’t do hard then just be like a that guy is sitting around like not doing hard and not doing anything Samuel Samuel I was in a retail business right one of the you know fluffier sectors out there but how he did it it was not easy I assure you with that if you read his story when he got started so dude I was just reading that that I’m reading it again at that good to Great book by Jim Collins right and it talks about so Walton started his business in 1945 right like with the little Penny store essentially and the way I understand you probably know his story a little bit more in depth than I do because I just kind of got an excerpt I got Jim Collins but I mean realistically I think it took him like it was like 25 years to get to accumulate like seven or eight stores or something like that right like 17 again whatever the exact number was but his lead time to

get there you know was like literally like 20 something years before he actually had you know enough volume to kind of start the real the real those explosive growth and it wasn’t like he was not an overnight success like by any stretch of the imagination he’s no bro Ecker that’s all I know yeah right I’m trying to be like you Chas while I’m like you want to come on the show again maybe some of that smart G rub off on me no I I think it’s that’s that’s I’m I’m with you I love I love but I think we have to recognize that all Industries there there’s so much so much grit in every industry anybody that’s been successful they put in the work that’s why there are they are where they are it’s not because you know they they use the right word to write anything no stay hungry my friends all right I’m hungry out there we’ll see what uh what April brings um now you know the information they’ll make a good decision buy some scraps sell some scrap do whatever you’re gonna do but uh but that’s now you know

what April is looking like we’ll see what uh May brings we’ll have another one of these on in May a month from now thanks Jack Brad appreciate you man