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 special edition ghost like I got uh two of my favorite people to do podcasts with talk scrap talk steel with and Jennifer’s been creating quite a buzz about this whole um Steel company sale and it just so happens I have a guy in town that knows a fair amount about new steel too so I’m like hey maybe we should all just sit down and talk about what’s going on in the world and Jennifer being pretty clued in on how this all works I brought her to sit in the middle of us so Chad and I don’t start arm wrestling fighting over the price is crapping you still so prior us off I got my whistle let’s go we’ll go through this it kind of worked out well like we’ve got the steel side of things the scrap side of things I’ve kind of played in between and

yeah let’s talk about it U.S steel unsolicited bids who who’s gonna buy them and and why now is anybody gonna buy them I think that’s probably the bigger question because and I’m not and I’m no new steel Guru by any stretch like that’s why I lean on you guys but it does feel like sometimes people just are trying to generate some Buzz or generate some uh conversations and is that what we’re looking at here or do you guys think there’s really something that’s is there really something going on is there really is this thing really up for sale well it it’s it’s obviously a work U.S Steel stock was trading for 22 23 bucks last week you know today it’s 30 31 33 so big jump week over week but it got all the way up to what didn’t it climb past that didn’t it it wasn’t 35 36 at one point uh I think 33 was the high yeah but the the Hunts listed had been by Cliffs was that 35 a share okay and S Mark same offer 35 share but all cash that blows my mind the all cash

to vertically integrate blows my mind especially U.S steel it’s an integrated slash trying to get into the eaf side of the business it’s it seems like an odd purchase for them or is that just really why I mean is this ESG becoming so attractive that that this is something you have to do I don’t know if it’s the ESG driving it I I think it’s they’re looking at s Mark is looking at being able to control some of their supply pricing because we’ve seen the past few years have been insane when it comes to Steel pricing and that just gets passed on to the service centers the mass Distributors it it just compounds so if if there’s consolidation within the in the new steel business like what does that mean for the little scrap guy like does that mean less less options for I mean we’re already struggling at some point like we I mean I’m I’m just over here and I don’t I only have two options if it is like if Nucor buys Cascade like I really have one like I have Cascade still on the west coast and Nucor going

east like the options are already getting slim we need either an export Market or 10 more new steel mills around and I don’t I feel like that’s that’s going to be tough I’m walking off this podcast I’ve heard enough about steel mills making enough money whistle we need to talk about the other unsolicited bid so we talked a little about s Mark the the steel distributor but I mean ah Cleveland Cliffs question mark If Cleveland Cliffs and U.S steel combined they would become the largest steel manufacturer in North America they would they would LeapFrog over Newport who is quite far like out of curiosity because that’s not like my area of expertise but how I mean when you say LeapFrog over them I mean I guess what I’m saying like location wise for anybody out there that doesn’t understand like if when you say Cleveland Cliffs potentially buying U.S steel like does that add how many more steel making facilities or capacity to their portfolio how does U.S steel have now at this point well I I think the point is is really the sectors are becoming a lot more like

you said you only have two options for your scrap yeah if you’re an automotive manufacturer like Clifton you know Cliffs and US steel are you’re one and two if they merge all sudden your competition could go away yeah so rather than that potentially does that then that makes the for the cost of a new car produces I mean it’s going to be more expensive it’s you know there’s only one person at the auction now right yeah it means the price is going to be a little higher it is for those that are unfamiliar with the automotive world and steel manufacturing integrated to typically dominate that space because from integrated perspective you know your blast furnaces your BOS you can create very clean steel and the automotive industry has very high standards versus the EAS the electric Arc furnaces depending if you know they’re what’s what’s the right term where they’re like the The Best of Both Worlds type thing we’re going to ignore that for a minute essentially use recycled materials and it they can get it pretty close but it’s not the same so it really will to your point minimize the amount

of options that the automotive industry has so what’s the what’s the best case scenario like for the scrap guys like what like just because I I’m asking for a friend like what’s the just if you know if I have some friends out there that are in this industry like what’s the best case scenario for them so the the upside though is integrated are going to have a home for automotive yes but from an ESG sustainability that perspective a more efficient and leaner and more Nimble steel production eafs are the future so you’re you’re going to continue to have eventually out here additional homes for your material and that just goes across the whole board at this point you’re going to see some of the integrated shifting from producing finished steel and then making essentially support products for EAS so like let’s go back to like the reasons why like why would this be happening right now and I think that’s probably more pertinent to like the like to this conversation that we could you know kind of hash out as is we are we are we topping out are we topping out on like

on the new steel side I mean price wise are we are we brushing up against that like this is closer to as close to Peak valuation as you’re going to get and then maybe short to medium term to where this is a good opportunity or is it I mean what’s the reasoning behind it all these poor steel mills haven’t made much money yeah that’s pissed my friend no I think that’s the that’s a million dollar question right yes is U.S steel while the integrated furnaces are great for really clean Steel the maintenance and to rely I mean his intents and I think a lot of these furnaces are at that stage because we’ve all all the student loans have ran well made a lot of money you don’t go down for maintenance when you’re when you’re making that kind of money so now is the time so instead of reinvesting that capital and doing the furnaces why not consider it a bid so it’s more just they’re considering it and and if it makes sense like I mean somebody I was I was talking to somebody the other day and they wanted to

buy one of my trucks right and they’re like hey I sold you this truck for XYZ amount and but it’s a working truck for me like it runs every day it makes money right and I was like I’m not really an intro I’m not good at selling trucks right okay I’m good at buying them and I don’t even know if I’m even good at that but I have a few and I was like I’m not really interested in something but if the price is right I would I’m like it’s you can own that truck right and so is this one of those types of scenarios like it’s making money it is what it is it’s gonna need that truck’s gonna need maintenance right that steel mill or those steel mills are gonna need the furnaces are gonna need maintenance but is it like is it does it have to be like is there a certain like like an Fu number that’s like yep you give me that to that spot and like we will watch it go away or is it like let’s just see what we think is worth it I feel like

U.S Steel stock has been I mean outside the most recent events I mean it’s been a downward I mean look at the stock price from 2008 is in the 140. you know yeah and realistically like if and I think if somebody like you might have said it like if Elon Musk can buy Twitter for 4.7 billion like he’d probably pay 4 billion just for the ticker right yes for those that are unaware USD so long simple as X because that’s how long they’ve been in business like they were at the beginning of the stock market in the US so why doesn’t Elon Musk just buy it and then just make those Teslas out of steel instead of aluminum and just like Andy could keep the ticker and like it’s just like it’s like the perfect like they’re Union shops yeah he doesn’t he doesn’t do well to back to what we were discussing earlier like the union component wouldn’t work well for musk right like he does buy electrical steel out of Cleveland Cliffs like he is buying some American domestic made uh steal for his Teslas but you know it’s a

West coast-ish Gulf Coast now operation so Imports are gonna be a huge competitor for well and if we as I mean the price of the strength of the dollar right is only creating more import pressure like for a lot for a lot of this new steel and so I feel like if they don’t if that doesn’t come into wraps it doesn’t come off there’s going to be probably more import issues which is only going to put more pressure on the domestic steel mills regardless of which ones it is so you’ve converted you’re thinking now these portal steel mills I feel bad for all three of you well that isn’t it interesting though we haven’t heard anything from SDI or Nucor about a potential bit not even rumored no they got their popcorn they’re sitting back they’re watching what is about to happen there somebody once told me when there were a couple’s dmls back in the day where basically they were both financially struggling and they equated it to basically two intoxicated individuals struggling in the street to hold each other up are we looking at that situation here or do you think

Cleveland Cliffs is stronger or more sober in this situation to be able to see this as an opportunity to like like strike while the Iron’s hot Cliff CEO I love for him if you describe him as a uh person that’s not how you did uh I think I think his comments would be different if he sees this recycled media is working yeah we’re doing okay for ourselves so this is a recycled media special edition yeah so thanks for tuning in and anybody else is good no thanks for dropping some new steel knowledge on me next time I go to buy some pipe I’m gonna try to figure out what if the Market’s coming down or not all right friendly wager by the end of the month what will U.S Steel’s stock price be did you see Nick and his wager on copper like I’m getting crushed right now like I was like yeah I’m like no I just might as well light my money on fire um but yeah we’re at what’s it what’s the price today 31 and the offer from 35. all cash 35 I don’t think we get there I

don’t think we get by the end of the month how much time did we get like 35 I bet we’re I bet we’re down from here I’m I’m with him I I don’t see how they’re gonna get there I mean if you’re basing it off of just a cash purchase price sure but on the stock market side of things HRC is dropping demand is slowing we didn’t even really talk about the union situations that are looming at several of the the Industries I I don’t see it don’t worry Cliff CEO I got your back I think you’re uh you got a lot of Pride I think you come in at a 40-ish dollar a share price by the end of the month and uh this is yeah wait wait yeah this is the bear I know well he’s he is a like he was a professional stock Trader I’m just like a thumbs I know I’m trying to like I was trying to sell the two steel mills just whatever you guys do just just try and buy some crap for me please yeah so I probably trust his opinion more than mine

I mean I’d love to see it it would be fantastic our our you know domestic manufacturing needs to win this would be fantastic it’s bringing a lot of attention to people that didn’t even realize we make steel in the United States uh just spoiler alert we’re the fourth largest in the world so we’re doing all right but so fourth largest being China uh it’s China uh Japan Russia uh and then us yeah oh so so China say it again uh it’s China was it to China Japan is it Russia than us it’s something around there yeah interesting yep I wouldn’t have known that like honestly like I knew we made steel but I didn’t know what our place in the world was yeah well to also put in perspective though like when you go from China to like the number two or like from China to us it’s a significant drop like we make basically 10 of what China does in a year and we’re number four Jennifer have your production team full charge oh yes just I’ll show that yeah yeah there you go all right thanks guys thank you thanks for coming

out and uh we got a lot of more content coming so stay tuned good seeing everybody