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 exciting episode of Bulls versus Bears I got the man Chad it’s going to break the market down for us today I’m gonna try to argue with them that the market should be I think sideways he’s gonna tell me about pound sand I think um but uh I’ll just see what he has to say he’s gonna bust out some charge for us and and let us know let us know what he knows so what’s up Chad how’s things going man man it’s just the sun is shining it’s just a beautiful day out I don’t know what it is about summertime and bear markets but it sure makes me feel good it sure makes you feel like I’m the buy side right the sellers over here us poor lonely you know scrap guys just trying to trying to make a living trying to keep

the lights on and view bears and just nothing no good news for us but uh I guess there’s no time like the present so well so tell me how is your scruffalo yeah just it’s slow slow and you know what I you know what this is one of those times like in all seriousness um I don’t think anybody cares what the scrap flow is because I feel like the price is coming down and they’re like blow like it doesn’t really matter like whether you can place the tons you got and it feels a good challenge um uh I I that’s the least the feeling I’m getting um but the reality of it is like for us it’s it’s still kind of in the spring like we’re getting into summer now over here in Idaho and uh and in the Northwest really in general so our flow had picked up but I don’t know like it’s still the industrial the industrial Market is slowed down you know your you know your drop boxes your bins that pickup you know I feel like manufacturing is has definitely slowed down so but in general you know we

do see more volume this year this time of year but you know I guess you’re about to tell us if we’re gonna be able to sell that volume or if we’re going to uh you know sit on it for a while I think it’s a great I I think I finally have the clarity this month for the first time in a decade and that I’ve had a lot of conversations with a lot of scrap folks where when the Market’s hot you know and it’s like they’re talking about I’m you know I talk about steel demand they’re like Chad it doesn’t matter it’s just all about flow right yeah but when the Market’s going down you know people say it doesn’t matter about flow it’s all about demand demand demand so I finally got that Clarity it’s not chicken versus egg it’s just is the market up or is the market down because if the Market’s down your flow doesn’t matter if the Market’s going up that’s when your flow matters that’s when the flow matters and you know like it’s the Market’s going up the flow matters because you know you’re you’re trying to

get it processed to get it moved and try and take advantage right and I was gonna I was gonna make a post about this the other day and and I and I and I really want people to understand like this this is kind of like a a kind of Veer off the left we’ll come back but uh scrap flow the importance of scrap flow relies heavily on your transportation so I never discount the importance of Transportation in your company like Logistics is probably the biggest piece of scrap that doesn’t necessarily get discussed as much as it should as like Supply demand steel mills export this and that like your ability to control your inflow and outflow is heavily relied upon is drugs and trains and movements right so ships if you’re on the export side so Logistics will help you control your flow it helps you get to the end of the month you can get your material delivered helps you bring material in and so back to flow it it matters control your Logistics and I think you got a good chance to kind of manage that inflow and outflow but I watched

one of your posts from I don’t know if it’s earlier this week or last but you talked about I never heard this term before but the velocity of scrap yeah I thought man isn’t that true and that even when I tell my friends that know nothing about scrap you know what makes you good at scrap it’s like well you really have to understand Logistics and like well I don’t get it like well you’re buying and selling something that’s for three four five hundred dollars a ton I mean that scrap component is a huge percentage piece right first versus copper or a widget and so that’s where yeah I’m with you 100 Logistics is super important my my biggest advice for for people is control your Logistics and you got a fighting chance I mean you’re never gonna control the price of scrap you can negotiate five ten bucks here maybe a ton but the reality of it is like your ability to deliver what you can sell your ability to bring in what you can buy I mean obviously there’s the processing component in the middle but your Logistics is huge man so and

and that’s very it’s it’s very true when you’re in the middle of Idaho you know it’s it’s probably a less of an impact when you’re in like a St Louis Market or somewhere where you have you know several modes or Ohio you got you know six Mills and within a really close range but but for your for your entity it’s it’s everything because you know I’m not as much of like a truck guy as my dad was but I the older I’ve gotten that I’ve understood the value of of transporting your scrap you know the your the value of of getting it delivered and having you know good homes for it and being able to deliver to those spots so I’ll say that going into pricing and whatnot I was talking to uh my DJJ guy over here this last month and he called me the price and I didn’t even I couldn’t even negotiate I was like you got me yeah yeah I didn’t even try it I felt like he was probably anticipating me and negotiate and I just it was like whatever just just book the sale like let’s go let’s

keep the let’s keep it moving you know I I’m sure he probably was like oh maybe that wasn’t as pain as painful as it sometimes can be I was like all right and I felt like you know he had kind of had me by the nuts at that at that uh in that conversation I’m like hey you got me in price is down like nothing I can say like it feels like that’s the way it is so what’s it looking like in June man yeah so let’s talk about a few charts but first I mean so I’ll let you leave do you want to talk about the bull parts or the bearish parts first I want to talk about let’s go let’s go bowl first all right so you ready I I got all my bull points yeah let’s go okay all right we’re gonna move hey you saw copper bounce today though right we got it back in the 370s um I feel like there’s you know there could be a storm on the horizon like a good so if Dr copper comes back into play maybe maybe we got a chance so

tell me copper that was 370 today yeah is going to bounce too yeah yeah so no doubt we I mean this chart was taken yesterday at 363. and that you know I think we jump into 373 you can argue that we’ve we’ve broken the downtrend so so there you go you’re right we do got one uh one one bull one bullet point I knew that that chart was gonna get pulled out because the trend of copper and the trend of oil and everything is it’s not our friend at this stage in the game yeah so I I wanna usually we don’t talk about the Dow Jones Industrial Average and for the listeners we’re looking at chart and very much that downtrend is interesting in intact when you agree and so and to your point you said some of your industrial accounts are a little slower it sure does feel over the last 30 for sure even the last 60 that we are actually feeling like we could be heading towards a recession I think to be fairly honest I think that the probably the last like really in in 2023 and maybe the end

of 2022 we’ve really saw a Slowdown on the manufacturing side um you know and I think it’s it’s and part of that is because if people have got caught up maybe on some inventory items and people have uh you know kind of there was a mad push to fulfill some some orders on my manufacturing side that were you know replaced up to a year and a half ago right I mean we still have forklifts so we haven’t taken delivery on and we’ve been almost two years out now like you know 18 months so I feel like once that has caught up you’re starting to see um whether it’s a normalization or a true downtrend in manufacturing it’s here and I don’t I mean on those on the scrap side and you know the guys at the boxes and bins and every everybody else out there we usually see it before anybody else because we see it in you know the volume that we’re receiving um you can only be so efficient at manufacturing a widget I mean you if you’re generating less scrap I don’t think you just got that much more efficient at

you know on your plasma table like you’re just making less widgets you know well that’s a that’s a great point when you think about the lead times for anything you buy I mean they’re not they’re not as bad as you know post covet but they’re still not they’re still not what they were pre-covered yeah and so that I think that’s that’s why it feels like it mentally The Slowdown is taking longer than like what is actually felt out there but that’s a great point about lead times all right next next great positive uh point that you have for us Chad all right you got what do you think about this crude oil chart so we’re only down we’re around 72 bucks last month this month we’re around you know 68 five and a half five and a half percent decline but boy this one this one doesn’t look too pretty either that one went in a hurry too right I think I mean this is why I don’t trade commodities for a living at least not like a lot of Commodities I I bet Nick in our recite a lot of a podcast

the top would be over four dollars I was just don’t go wrong about that one if you would have told me oil would be trading in the mid 60s I would have said no way like I didn’t see that one coming um so yeah it’s a I I I’m not I’m that lady in that video I posted trying to keep up with the line dancing like I’m I’m all over the map like I I’m not coming up with these Trends but it looks like it’s picking up steam man it’s not picking up steam in a very positive manner yeah and I included the Blue Line This chart’s a 200-day moving average I think that’s always important to really just show the overall trend and you can see it’s very much still on the decline so all right so let’s let’s jump to the next one uh pig iron so this is this is important because I feel like this is a big impact mentally if if you know there used to be a high correlation between bushling and Prime uh pre-covered uh pre and pre-russia Ukraine war but now it’s it’s

not as much but in any case Pig irons down from 535-ish to 505 510 ish we’ll call it uh you know 30 bucks 25 30 bucks five percent but I I think between this and Rush our Europe has been slower on the steel mill side too right just because of natural gas costs electric cost and there’s been a lot of I think rumored that there’s like 400 000 tons of prime being brought in the last three months and there will be again in June so that’s a lot of prime scrap and now you got pig at a more attractive price so I think that’s gonna have a huge impact it is man and and ultimately I mean probably more of an impact on like your your bushling grade right I mean any of that like stampings and stuff like that you’re then maybe the the cut grade scrap but I mean it’s going to have a it’s going to play a role for sure I mean what do you we what are you feeling like on your end are you guys seeing I mean is there a lot of Prime material bushing scrap

being even offered is it is it a I mean is it I mean from an automotive standpoint you know you got you guys being operating over there in the midwest is it are the automotive plants um still running hot and heavy trying to catch up to something are those starting to because I mean like for example the reason I asked that question is I was reading an article about the RV industry right I mean and those guys are I mean I mean they’re getting crossed right they’re putting RVs on sale like nobody’s like nobody’s business but there’s not a lot of demand for you know new RVs but because Automotive was so far behind because of the chips and everything else are you guys seeing the automotive you know scrap becoming more and more available or is it is it is it filling supply issues over there well why when I think um when I think of Automotive I think of hot roll and you know funny enough I got that lead time chart all right here big time chart is back I love it yeah so we’re we’re at like nine weeks a

month ago now we’re in that three weeks yeah this is frightening that’s the that’s one of the charts I was showing to um one of our pipe supply companies there like yeah I mean I think the price could be up and yeah it’s like no it’s like no go piss on my leg and tell me it’s raining like that’s pissed like it ain’t going I said I mean shows something to you that you’ll appreciate like let me show you how much easier it is for you to get coil than it once it was and on that front I mean here’s the U.S Midwest domestic Hot Roll pricing so we are we’re at right around 1100 11 35 last month you know an hour somewhere in that 9 35 uh Futures and so that’s down 200 bucks or 17 and to me these these charts are very much correlated 100 it’s uh that’s not good um that’s not good if uh if you anticipate this a price spike in uh June or July and really as those lead times come down we like we discussed and you’re kind of opposite of what we discussed

you know just two months ago I was like Hey lead times are stretching out that means there’s some demand that means there’s some maybe some positive sentiment and you see how fast that can turn on you and that being said that that should motivate you um on the scrap and you to keep your scrap moved because if it turns on you that quick it’s it’s in your best interest to probably keep your scrap moving so you don’t have to you know feel the full brunt of it and that that’s I think that’s a great point and to me I think we’ve seen a lot of consolidation in a lot of different Industries but to me this Market can move up really quickly because of the consolidation and it can move down really quickly because the consolidation so it just feels like we have a supply chain that even throughout the whole system from scrap to Steel to service center everybody wants leaner inventories everybody wants to you know included these companies have more power when they want to push pricing up and they they show the the demands there and the lack of Supply

they they had the the fortitude and the know-how to do that and on the downside it feels like they they can do the same yeah no I 100 I mean what the old the old saying has never been truer is has to layer up an elevator down right like it’s like boom right but you got to be prepared for that one the the boom so on the way down so you got to kind of Chunk it out as you go on the way up and not try and pick the top so this here’s a let’s let’s switch gears to China so this is Shanghai steel rear bar and it’s down let’s say four and a half percent and this is the one thing that I still have to like teach my brain is when when they come back when China comes back production comes back pricing Falls because they just they’re Relentless about just throwing material in the Market at whatever price it is yeah and and go that’s that’s a kind of a testament to how they the how they do business right as a country and I say how they do

business in general but as a country they’re more interested in moving product moving material than necessarily trying to create or keep margin right it’s more just like hey we would rather keep our steel mills running we’d rather keep our people working like if we have to sell at these markets like we’re gonna figure out how to do it you know um and they’ll drive that price down until somebody buys I mean I think that’s the I mean that’s the reality of the situation is they’ll keep going until somebody says I’ll take it at that price type of deal yeah and obviously with Section 232 impacts us here Less in the United States but it really impacts turkey because if those if you know the East Coast scrap guys right if they if that’s if those if the church can buy a rebar from China or they can you know cheaper than they can convert scrap into rebar obviously they got to do what’s best for their business too so which and how does that how does that affect the domestic rebar suppliers well I think they’re I think they’re protected a little bit through

this that section 232 up to a percentage right I don’t know if that’s a 25 or 50 tariff but off the top of my head but I mean 25 of something is you know still pretty pretty decent number yeah that’s a that’s a big chunk I mean especially when you’re talking about usually that’s going to come off of you know it’s it’s going to come for the most part and I try and explain this to the to scrap suppliers in general right like they’re not going to take the 25 haircut like they’re gonna give that they’re going to pass that on to you so they’re not going to split it with you they’re not gonna you know share the pain like it’s if it’s 25 like you’re gonna get the brunt of it on the supply side because they’re basically saying I can go find the material from somebody else that’s willing to take the 25 haircut and and I think that’s that’s what what people have to know like as much as I’d love to be positive and love to be like hey you know optimistic this Market’s going to bounce and you

know when you recognize the market is softening up like it is in your best interest to making move material unless you’re just in a space or a cash flow situation that you’re like yeah I got a year or two to wait let’s wait to see this thing out see this thing through but people have built their businesses companies have built their you know their businesses especially the last couple years into a to a infrastructure point where they it’s almost I always think they have to move material right because ad equipment they’ve added processing capability they’ve added added added to keep up with the market now the market does this on them you gotta you gotta keep that moving so there’s if you don’t feel comfortable with the sale price there’s probably somebody out there that does because they got to move scrap so if you got a good home for your material it’s in your best interest to make sure you got that ability to move that material yeah I would I would uh tend to agree that’s for sure I’m gonna switch gears a little bit and talk about we we hit it

on copper and so Copper’s down I think you know from yesterday’s price was around five percent five and a half percent Zorba to me is I think it’s down also around six seven percent I really keep a close eye on these because I think both copper and Zorba are super important to shredders because you know that what what they get on on for their on then Eddie currents from the copper and Zorba it’s so so vital to their profitability so with both these prices being down it’s gonna to me it’s gonna be hard for for shredders if the market goes down you know 30 bucks it’s it’s gonna be hard for them not to follow that plus some just to make up some ground here on the Zorba and copper pricing and on and when do you think that’s this is kind of more of a historical question if you don’t know the answer that’s fine at what point in like when when did shredders start more calculating in this price is orbit to their you know what they could pay for shreddable materials that when this when it when it got when they

where they added you know like when shredders became like a lot more plentiful in say certain areas I mean at one point I mean I don’t own it I don’t operate on a shredder I sell to a few different ones um and it feels like it probably depends on the market depends on the competitiveness but I mean I wonder what you when did that really become about when people really were started focusing on the the Zorba side of the The Shred feeding not just using it as like a gravy but actually calculating that into their Buy price but I think to me in my you know so I’ve been um good night five six seven hundred yards in my career and and so I’ve seen some of the best shredding equipment out there there’s two guys that come to the top of my mind and then when I think about that technology and the cost of that technology yeah you know it’s to me the last the last five years it feels like it’s became more affordable or more on a scale and so our they’ve where they could recover enough material out of

those machines that they could pay for itself very quickly and I think it just it’s kind of fed itself where the ferris is kind of a lost leader and then the non-ferrous where you’re actually going to make a penny from my perspective now every Market’s a little different I think in the midwest like in Ohio I’ll tell you it’s it’s I mean it’s it’d be I from the pricing I’m hearing it’d be very tough to make a buck just doing Ferris alone huh but I mean ultimately if you’re let’s say on average I mean I think it depends on the depends on your you know the grade and interior you’re running but at least from everything I’ve ever kind of understood you’re still probably what anywhere from like 20 18 non-ferrous coming out of your ear shredded Goods I got a percentage basis I mean and but also the technology on like the you know the auto processing side and everybody anything else you know that has gotten a lot better but people are really picking those cars apart before they deliver them to a shredder so that number has to swing

wildly yeah and I think I think that’s that that’s what we’re going to see in the next in the next decade is that is as people become more educated about the scrap industry I mean from the the pick and pull yards to um treading yards our process is very efficient this whole industry is extremely efficient they don’t waste a lot I mean even from used gas you know like so I think people are going to be impressed with just how um resourceful a lot of the whole scrap chain is interesting yeah I’m always curious like on the history of when when was that like switch made right like because then you could like look for those Dynamics and say we’ll start looking across the board at other Commodities or other Industries and say okay at what point does the technology begin then to tweak you know I think it used to be you you know this is pretty my time but it used to be like you’d slow down your Shredder to try to make material smaller because there’s just so much loose copper in your regular Auto shred right and then they came

up with gamma shred where they’d run over this X-ray and they could tell you at least how much copper was in it right and they would try to get it below well now it feels like shredders have gotten better this the trommels have gotten better and then therefore in my state better I mean they make the material smaller right and then that that increases just your your Downstream process and all your Eddy currents so again I feel like this industry has has a has forced forced a lot of recyclers to get super efficient super resourceful and uh and they’ve done it so there you go if you want to uh if you want to get into the shredding business you might hit up chat he knows he’s seen a few operations in uh in real time you could tell you like you know tell you the efficiencies of how we’re establishing in the markets that you’ve seen yeah and what’s what’s interesting is I see a lot of heat right directly impacted from all different shredders all across the North America so it is really fascinating the shredding technology and how different each

Shredder can be based on that operator and how they run it yeah who’s trying to cram the most junk through it who’s trying to run I always think of a shredder as like a similar like a wire chopping line it’s like in out you put in good material through it and you manage the process and you know over feed it and try and jam eyes make sense you can’t the back end you’re just gonna it just goes back to Quality you know and I think which kind of leads me to the next thing you know and you know when we do this podcast we do from say a steel mill buyer’s perspective and a scrap you know seller’s perspective and and that’s what I love you bring a dynamic to the table and information that to get people aware of you know when you’re trying to make a deal on your material like understand the way the steel mill you know buyers process in his mind what he’s thinking right and what he’s trying to project and what he sees and on the scrap side when these markets come it’s even more in your

favor to make a quality product because there’s going to be more material available in the market when your ability to make a quality HMS one two package your call you make a good number two bundle and then one bottle bundle clean shred like it’s in quality is imperative and at two points in the Spectrum the way I see it when the price is really high because there’s a lot of demand quality becomes important because they’re they the price is high enough that it because they they’re paying more attention when the price gets really low and there’s not enough demand quality becomes probably I would argue to say even more important because you now have more competitors people that are selling material into that Mill or that want to sell material that Mill so quality is about to become even more important than it was let’s say a mid-level price where it’s a more sustainable pricing as the market drops out people have to steal meals they got they have more more people trying to sell the material they can actually consume you better be on point which all the years leading up to

that point if you’ve just been making shitty packages and getting away with it because the steel mill had demand that eventually that comes on the roost and now you’re gonna you’re gonna pay the pipe so it’s important to always keep keep in mind quality you know whether you run a shredder or a sheer or whatever ship quality and you’ll for the most part should have a home for your material yeah and that I think that’s the ugly truth about any Commodities Market was when things are hot you know quality just typically the yards are trying to get it and get it out right they’re less focused on quality and when the markets are lower you know you see a lot of Market Rejects and you see you see everybody get more focused on quality and so it’s just I think that’s not true in the scrap industry I think it’s true in other Industries as well yeah 100 all right so I you know uh nickel is down too now this Market is a little bit uh wonky in that I don’t know if a lot of people trust selling me but are you

seeing stainless prices come down quite a bit too yeah they came off I saw some some 304 stainless prices dip into like the high 50s which I hadn’t seen that for a while and they kind of bounced back um coming up into the low 60s again so that thing’s trying to find a plane like you know it’s trying to plane out I feel like um but yeah I mean you saw when I started seeing you start seeing high 50s you’re like oh golly like it’s the stainless is a such a tough product to process right I mean it’s it’s just it’s heavy it’s nasty it’s hard it’s hard to bail it’s hard to just deal with um so you start seeing standards price in the 50s at today’s operating costs that can be kind of worrisome um as an operator let’s see all right so I think we’ve already seen shred feed pricing uh come down some I think the fast markets is down 20 bucks month over month and I think this continues what do you think I think you’re probably rewrite if I had to make a uh if I had to

make a bet um I feel like that you you start adding in you know what Zorba’s doing and then the you know steel mill demand and whatnot I think you’re I think it’s a tough it’s a tough Market to uh to be a seller into right now you don’t have you don’t hold much Leverage all right last chart for you this is the most important one I think say The Best For Last you know so I was actually surprised on how much how little it was down so turkey and we’re looking at the 80 20 turkey chart and so last month it was I think at the beginning of May is right around 401. now today it’s somewhere in the neighborhood of 390 391. so it’s really only down 10 bucks and so uh you know but I think the bigger component is not the price is the lack of volume and the lack of volume particularly off the east coast yeah and what is this time of year that that Market’s typical right it does it kind of slows down I mean Trend wise it usually picks up a little more steam towards

the you know ladder part of the year if you’re gonna pick up any steam um but you know I I don’t I don’t deal much with that with the turkey you know obviously that’s a more East Coast deal I mean I think that’s what drives that price a little harder maybe to sell Gold Coast um East Coast but you know you I think you need a strong Turkish market to pull tons out of the U.S right which then creates a little more Demand on the domestic side and if if you’re not getting that then you’re gonna you’re in a tough spot so you know and if it’s like you said it’s not necessarily the price and I don’t necessarily also believe that people are holding tons back either I feel like the domestic Market’s been strong enough they’ve been able to move those tons domestically so maybe the volume hasn’t needed to move off the coast but if the domestic Market slows down enough you might see the volume move up with the price come down yeah I think that’s I that’s a good point to me you know when you think about

primes and all the Imports are prime are coming in you think about the lack of volume on the export even though you know pricing becomes less less of a point at that standpoint so just those two factors would would create an oversupply and then you create lower demand Market man things things are things are bearish they are man they are every dog every dog has it’s it’s it’s definitely a bearish cap but optimistically the you know the future is the future is by far industry but I will say that it could be a long slow slog to the summer and um so half the time I give advice so that maybe I’ll take it for myself um so so I I do believe if you’ve got good homes for your scrap and manage your quality nothing the takeaway is for me your manager quality you know take care of your you know take care of the take care of business make sure your costs are in line and and make sure you’re not overpaying for scrap that you can’t process and get rid of in a timely manner or else you’re going to be

holding the bag on potentially a lower July Market as well so be cautious of of how you how you how long you sit on material um as far as like how long you’re willing to sit on it knowing that the trend right now is not necessarily optimistic in our favor on on the scrap seller side I love it so many golden nuggets right there thank you all right sir well thanks for all your great charts I’m about to if you have a couple more like this I’m just going to be a Bears versus Bears podcast but like I said we’ll get our day back in the Sun but for now the trend’s not the trend’s not going our way keep the scrap moving out there guys you had plenty of fun in the first quarter it’s all good everybody like I said yeah everybody gets their day all right Chad we’ll talk to you next month man thanks Brett