welcome to a scrap life a podcast solely focused on the hustlers Grinders operators and business owners who live and breathe the scrap metal industry every day here is your host Brett acard all right here we go April 2024 Bulls versus Bears the market kind of got the best of me last last month with uh Chad had a list of 40 things of why the market was going to be a bearish and he was correct but every good bull gets a chance as long as you stay fighting here we are Chad’s gonna be out swinging the the red cape trying to trying to get me to stick him but I’m I’m going to do my best I think the Bulls got a chance in April Chad what do you think I don’t know the data I got seven bull points and only three be points so let’s go see the Titus officially turned China was reading the reports last night they were coming in China’s GDP is looking better their Manufacturing Index is looking stronger we won’t talk about their housing or the commercial side we’ll just leave all that out but generally speaking they

figure they’re going to hit their targeted what 5% growth rate and and they’re going to move the needle man they they’re coming with the Vengeance what do you think well no that’s that’s a that’s a great point so let’s be realistic though to call China hey he he why you go ruin it with charts I had a good thing going people were listen they were believing me that we had a fighting chance to ship scrap to China again and there you go I you know I feel like this Market’s like the tale of two two different markets meaning International and and domestic you know this is the Shanghai steel rebar report our chart we’re looking at it’s it’s down 9% month over month to me that’s that’s pretty aggressive that’s not quite bullish chart that we looking for um and I’m glad you brought out the domestic strength versus the export strength that it’s always good we always talk about having you know two biders you know you need two good biders at the auction to drive the pricing so right now the two biders are lack of supply in um somewhat competitive or

you know somewhat competitive market for the lack of Supply on the domestic side I guess how how you’d state that so if we got that export Market rolling man we’d have a chance we we’ had to we’d have some we’d have some strong pricing and I don’t and I I don’t want to pick on this deal rebar pricing I assume there obviously there’s demand in that but iron or also had a really rough month it’s down 12% so you got to assume that there’s some correlation there between their their steel pricing and you know their biggest input cost iron or yeah which that probably hurts Australia as much as it does anybody right I mean yeah yeah for sure I mean Australia is the largest exporter iron or mostly goes to China so when I see that chart I feel for Australia well especially think you think about just inflation costs it’s around $110 a Time yeah it’s hard to do imagine anything being done for $110 a ton right yeah something’s got to give there I mean I mean I at some point those mines have to just kind of you know shut

down they got to start like pulling back tonage something’s got to give right in order to create a little bit of a price action yep yep so let’s uh let’s let’s talk about the overall Market I want to get your pause here I mean the the Dow Jones just keeps ripping we up like three and a half% month of a month yeah is this just just all AI hope or do you feel like there’s some real fundamentals at the Market’s going to be going to be strong here’s my blue collar redneck Idaho take right on the stock market because I am not a stock Trader by any stretch of imagination I can’t help but think it’s kind of like when people say there’s more murders today than there was in 1950 right well there’s more people so like statistics are what they are and so when people talk about the Dow Jones you know at a you know whatever alltime High S&P alltime highs right or like pushing alltime highs some of that has to be there’s just more money in the system like more dollars right which can buy which should drive

the stock price quote unquote the the the what it’s trading for from a dollar standpoint up I mean if you print the kind of money that we’ve printed and Juice the economy the way we’ve Juiced it I mean does that mean that the businesses are technically that strong or does it just mean it’s like when somebody tells me oh my top line is this and I’m like well that’s great but what do you make on the bottom line like how much money returns to you at the end of the year if the answer’s zero I don’t really give a what your top line is your Top Line could be you know XYZ and and and but if none of it comes back to you like none of it makes it down to the bottom line then is your company that really that great I don’t know the answer to that but but I guess it probably depends on you know the cyclicality of your industry and what’s all going on but it feels like the the stock market is like a measure of Topline growth right like as small mediumsized businesses we’re the true

measure of does it any of it making it to the bottom line you know and that that’s my take on it so like when I see stock charts and I see this like I think that it’s it’s it’s good at least the stock market isn’t cratering like that’s not going to be good for for anybody in business but it to me feels like it’s a product of just the money printers just you know on overdrive well I I tend to agree with you but I but I also think that there’s a lot of hope that like for instance if if just Siri became like a a Chad gbt that would revolutionize Apple stock in a good way and and at least in my interpretation is when I look at AI just like the AI videos like a year ago were awful and today they’re like making whole movies and they’re actually pretty good so I feel like everybody’s a lot of there’s a lot of optimism out there that it’s going to increase margin because you’re going to be able to lower some of your cost on on producing things from movies to software

to you know you name it so yeah but but I certainly don’t feel that in the the day-to-day economy when you’re talking about industrial scrap flow or or no I feel like we’re the measure of the bottom line right like yeah that’s where I I’m like where I’m speaking from is I feel like the small mediumsized businesses you’re the true measure of the bottom line like how much of that’s making it through the system you know yeah it actually spits out to the to the greater percentage of the population and I’m not a believer in I don’t know like top down bottom up whatever economics I’m just just saying like it’s hard to measure the economy by the stock market because there’s only a limited amount of people that have got a lot of dollars to move around that are actually playing that game and if AI really does come true probably won’t me any humans that even play it anymore it’s just GNA be computers betting against each other yeah seriously I well I mean to me this is really about inflection point of inflation that we’re talking about right like

yeah you there’s a lot of businesses I think are trapped between high cost and and not be able to push price increases on their finished product and so when I think about inflation one of the biggest drivers I think about is is oil right and oil did jump around six just shy of 6% from 78 bucks to 83 month over month which I think it’s a positive sign for scrap what do you think yeah I mean especially if you’re in the ootg market right like if you’re selling scrap into Mills that like Focus heavily on you know octg products right whether it’s bits and or pipe or you know whatever that is like Foundry type you know location you know people that are focused on that I feel like if people feel like there’s momentum and on the oil side then I then especially even on the whether it’s even on the price action but just momentum on the motivation to drill right I mean if if people feel like think about the run you could have in oil if Donald Trump gets elected in November because everybody knows that least what he says

is he’s going to turn it back on right and that’s got to be good for the oil industry I would think well wouldn’t that hurt prices being more capacity well I think it it opens up the export Market harder right is all of a sudden like we were a you know we were pretty much exporting oil when he was the president and we’ve kind of be we now to the point where we’re ta our you know strategic oil reserves to keep the gas price low because we aren’t drilling enough of our own oil and so if if that happens like I don’t know what that does to pricing in dollar terms but I think it’s it’s it’s presents a a strength for the octg on the scrap side for those Mills because whether it keeps the oil price down but if you’ve got more drills you’ve got more piping out there you’ve got more rigs generally speaking more mining is good for the scrap industry the way I view it yeah that’s a that’s well certainly on the on the steel production side right they’re G to need more more steel products domestically it

keeps the domestic steel Market strong which we can’t I mean that doesn’t help us on the export side but it sure doesn’t hurt the domestic side and I’m I’m surprised when I uh I looked I I guess with with scrap being down so much in the month of March I thought for sure we see steel utilization rates come down frankly because I thought well there has to be some outages that are size that are sizable that’s why they’re able to push the scrap Market down as much as they did and and we are I we’re right around 76% um capacity right now in the utilization rate so I think that’s pretty good so that’s that’s interesting to me to see how how how positive U the production levels are I mean bodess well for at least the the shortterm shortterm future um for the demand side right I mean which going back to it if you’ve got some demand I mean and and your supply is still lacking then that’s going to what’s kind of float the pricing Le keep it you know at a reasonable level to where people can you know afford

to push back a little bit and say hey I can’t ship for that or I can’t you know I can’t sell you at that price well and and so like like last month this time we were talking about you know rumors $800 Hot Roll right and the Futures market like I just checked this morning they’re at 927 for May 9:05 for June so that’s there’s some optimism out there which I think Cleveland Cliffs announced the price increase up 60 at a $900 floor you never know what’s going to stick and what’s not but the futur market would say we’re we’re probably going to be at least at that level well they’re going to float it they’re going to float it and see uh if they can get it you know and then if you bet your your ass if they get it then everybody’s going to follow along with that like oh yeah I like it that’s a great idea but but I mean BR if you look at these two charts you got we’re looking at the hot roll oil market for the Midwest and the United States and the Northwest European

market yeah there’s $250 there like 27% like talking about a tail of two different worlds I mean think about the scrap guy if and I I don’t know if you are tied into the European Market but I would love to hear from a European uh scrap vendor what is their flows like because how are they making $700 $675 hot roll and with all the inflation that we’ve had here in the United States they’ve had the same thing how are they getting any scrap in the door and probably on a even larger level like on the inflation side and even you know more punishing level um and I I think that that is painful for them I think that we’ll have a chance to probably hear from those people at ier here in a couple weeks right like I mean I feel like that that’ll that discussion will probably be had um and I don’t know that obviously that’s on dollar terms right so you have to you know can make the you know discern you know from from their standpoint what their measure of currency they’re they’re using for on their end but yeah

yeah I I I feel like our domestic Market is is still fairly strong what’s driving it to me can only be the the fact of you know the money printers are still ripping um we’ll see I mean you know I think it’s a it’s they’re gonna let those printers print man it’s an election year and they’re not going out without a fight so them are gonna print like there ain’t no tomorrow and if it doesn’t do the job then watch out it’s gonna be interesting well I look at this hot roll market and I think you know last few years the steel mills and I can’t believe I’m saying this but they’ve they’ve had an okay margin not great but okay you know and uh this year I okay yeah just barely enough to feed the baby just trying to keep the baby clothed but this year I feel like the margins are going to be compressed and and so now it’s okay do you just as a publicly traded company do you just try to put out enormous volumes to try to offset that or at least keep volumes what they were historically

and I think that’s where that’s where you I think that the Market’s trying to find its balance right now what Ro you being a you know new steel guy you understand that what role does like the 232 tariffs play in in that domestic demand and allowing say allowing the the domestic markets to kind of run on volume maybe not necessarily margin like does that 232 play a a big role in in keeping exports out or no well I think this is a perfect perfect chart for illustrating just that right it’s 25% tariff and the pricing differential is 27% yeah so the us-based steel mills know what the export price is and then I know exactly where they got to be and and that’s to me that’s the difference here I I don’t know it’d be real this would be more of a um debate of but no one would really know but I think if we didn’t have those tariffs like it’s hard to think that our hot our hot role in the United States would be in the 700s yeah interesting interesting another probably hotly debated topic that will be coming up

because you know I think it was Trump that put those it was his administration that put those in place right right so um obviously like that’s going to be you know a big part of the the election campaign Focus from our standpoint right like you know as the election happens elections come out they start talking about you know all sort of sorts of hot button topics right there’s probably only one or two that really apply to you or to me or the next guy so it’s kind of like you’re picking your battles and you’re will you’re have to eat crow on a lot of other stuff to get the one or two things you want right so you as a domestic steel you know manufacturer a domestic scrap you know consumer I would have to assume that the 232 is is beneficial for I mean they’re the ones that lobbied so hard for it right yeah I think it’s I think it it literally is bringing back us steel manufacturing right like that’s something I’ve talked about recently internally with somebody my organization about when you ask most Americans hey how big of a

steel player is the US in the world most would say yeah I think we’re a pretty big player and we were 30 years ago we were the biggest right us and the Soviet Union today it’s we’re not even like one tenth the size of China like it’s not even close yeah and so and I think that’s the idea is hey if you want to if I mean and think about if we if Brett and Chad owned a country we look at its natural resources and say you know steel manufacturing farming agriculture those are the two big ones historically that have droven successful economies and I don’t think China’s any different so I think that’s why so many foreign steel making entities or with interest or whatever want into this market right like that’s a big driver is they they see that the the value in the US market maybe in the future on the consumption side the future on the production side I mean those are big drivers for for our industry and re big drivers for export um or other countes trying to get into this into this market right um y so

I’m to keep an eye on out there yeah let’s let’s shift gears I mean you’re the you’re the non-first guru in on this podcast what what do you think about copper dude I I feel like we got a little bit of run left in us right like to me it feels like if we can find some stability around that $4 range like we have as of late then you know it’s kind of been balancing around that in between that 390 to four four and some change so if that’s the floor and if they can continue to hold the line there you know I feel like it’s like we got we got a fighting chance to you know to push that 410 420 and this you know at least this summer for sure depends on what the demand picture looks like but I was reading an article too they were talking about you know less of the ESG push and less of this you know kind of you know all and I don’t know that it’s less maybe it’s just not as visible but I mean I still believe that there’s still a lot

of infrastructure money sitting there to be had how much of that goes into copper and you know electrical grids and whatever else you know in order for us to just compete and keep up with the technology we’re still have heavy investments in our in our electrical grid right which requires a lot of copper but if you look at some of these countries like if China truly does catch a little wave of growth they do catch some momentum again and you now they’re competing with India right and India is kind of on a growth trajectory that’s similar to what China was say like in the early 2000s or at least trying to get there well man if you got those two com those two countries competing for copper plus a fairly healthy or at least somewhat healthy domestic here in the US I mean that bodess well for copper pricing in the medium term I think but it’s it’s certainly telling when you steal both so Copper’s up U around four and a half 5% month over month but what I thought was surprising is aluminum followed it too right it’s up four and a

half percent and so those I mean the shredders while the fair side I think is a hard business right now the the non-fair side they should be able to to gain some momentum there so that should be good for for the scrap industry yeah it’s just a volume game for them right trying to keep their cost per ton at a reasonable level if because they can’t get the units the front end units like obviously these their back end their their Downstream um has the technology has came so far and they’ve you know they’ve lot the companies that have made those Investments I think maybe at least in the medium term will eventually pay off if you can get the volume to get through them right but yeah I feel like that’s going to be the bigger the bigger question for your shredders ESP your big shredders and these installations in the last say couple years have not I mean they’ve only gotten more expensive right plus now you’ve got EPA pushing you know basically dog housing these shredders right which is two three four five million bucks to enclose the the shredder and

how many of them are going to have to do that and then you know that’s a depend on the volume you’re you’re I was talking to a shredder operator here the other day and they were like yeah it’s like a four million three to four million dollar like build out they’re like we ran our tonnage that’s like a four or five a ton like cost just to just I mean they’re not they’re not it doesn’t make the scrap worth anymore it doesn’t they’re Downstream is any cleaner like the only purpose is just to to uh in encase the the actual Shredder you know and produce and was it uh you would probably know the answer this but it’s to house and um soak up take in the whatever the the dust is one of them and then there’s other some that it’s supposedly creating in the air getting all the what is it PVCs and just the organic material in the air out out of the airity something compound I can’t remember what the word was like I said I’m not that’s the shredders aren’t my aren’t my wheelhouse other than I love selling

to them they’re great consumers of scrap well and I I don’t know I feel like we both being in this industry we probably got a lot of friends that are I would call metal bugs right gold is getting I think it’s at all-time high so it it’s interesting to see that both copper aluminum and gold are all all taking a stride higher yeah which usually mean the econom is pretty good but and obviously the Dow Jones would suggest the same thing but like you said the guys on the on the ground don’t aren’t feeling it it’s weird yeah it’s I mean I think that and you know sometimes it’s not necessarily I wish I think about it like this it’s hard to go backwards right like if you give somebody like a pay raise right it’s a dollar an hour $2 or 10 or whatever that is you can’t go to them a year later and then say hey we want to like now the economy is softened up we’re going to get you back to that that wage you were at before right cuz that’s about where our business was but that’s

essentially what you did when you sent everybody $1,200 $2,000 $4,000 checks in covid right like you gave them a raise for their lifestyle so they were able to buy you know stuff that they hadn’t been able to buy they were able to like consume better alcohol than they were consuming before better food or go to restaurants or a nicer car whatever that is right and then you’re essentially now you’re going to take that back and you’re going to you know take it back to you know three four years ago and say okay now you’re back to here you don’t have that extra that extra income right well it changes the dynamic of your whole economy from especially if you’re a heavily service-based economy the way I see it I mean it’s like giving somebody a pay demotion like you gave them a promotion and then you took it back and so are we really that worse off than we were like three years ago or does it just feel like it because we push so much demand forward right and so maybe we’re playing that catchup game and so I

think about it as like maybe it’s just going to take us a couple years to to to create the demand again right and and I don’t know I I don’t think this inflation thing can be over like I said wages have went up and if you look at the price of wages compared to like your medium household in the United States it’s at all-time high still right so so that it means housing’s got to come down which 410 copper doesn’t suggest housing’s coming down you know or or labor wages got to go up for that to to even out and so but you just can’t compare a price it’s like you and I’ve had this conversation before you can’t compare $300 HMS when somebody says oh the HMS price is $300 or whatever that number is right if somebody’s paying you 300 call me we we’ll talk I’ll broker your in somewhere else but uh but uh if but if but people like oh you could sell 300 like that’s a good price like this ain’t 200 seven like the cost of everything is went up $300 HMS isn’t $300 HMS anymore right

like that’s like $200 HMS and then saying oh that’s a good price you know like all relatively speaking like no it’s not and I think the same thing goes with four $4 copper or you know a dollar aluminum like yeah it’s it’s $4 I’m like well have you have you bought any like insulated wire on the open market lately and and felt those margins like that shit’s tight you know but you know I gotta I I gotta go to my boss today and say hey that $7 an hour I’m making it’s just not enough yeah you need to give me give me the N like and and not you have to go to California you can get $20 a$0 an hour we won’t tell you how much how how what the taxes they take out of it because the only reason they put a minimum wage on it is so they can take the money and keep it right like their minimum wagees they can tax your ass harder and keep more right never would have thought of that all right let’s let’s uh let’s stay on this non-fair uh train here

but this one’s a decrease so nickel on the lme fell from around it’s around down four and a half percent any any insight there or what what do you think’s happening here you know I I don’t I honestly I talked to my my my stainless buyers I mean we do like process a decent amount of stainless through here and I you know I hadn’t they you know the price had come off they you know even 304 price got softer by a few cents um and I haven’t I haven’t really gotten any insight and I to be honest that that one I I probably should do some research on but I definitely saw it in the 30 304 316 price um it’s felt a little softer lately well I’m going to I got I got two more charts for you we’re going to switch back to Ferris uh one is the the turkey this one I I was really surprised by this month we started at 390 we went all the way down to 376 and now we’re back up to 391 I think what happened here was the the turkey steill got orders you

know it’s very similar to us we felt felt like hey scrap world might be B might be bottoming and which is interesting because you could say I scrap one of the leading indicators on on steel pricing I don’t know but well I feel like it’s going I mean it’s it’s definitely can you imagine like what people used to pay attention to even say 40 years ago like the iron ore Price Right was a big driver of you know steel production and and utilization and which countries were going to be on the you know on the stronger side of of production I mean versus today as as people transition to the eaf furnaces and and become more scrap dependent and I think you know scrap pricing is is definitely taking a it’s going to take an even larger role in the near future you know even compared to Iron or so yeah this is a good indicator of maybe like you said turkey got caught some orders and going into Springtime for you know and saying okay maybe there’s maybe we’re going to get some demand which is good especially on the east coast and

you know some in the south I mean you’re that now you got another player in the game got got options you know there for a while you know I saw that I saw that post you know and whitesman said said he shipped you know 400 trucks in a the last day of the month I was like get that order out and uh then you know because he saw this right like he’s like oh March is gonna be a blood bath well yeah luckily maybe you know guys like that heavy you know heavy uh processors on the East Coast this is welcome news absolutely and it definitely feels like the the worm is turning some bit and here this chart’s pains for me to show you Bretton this is the last part last last Point here you know just trying to help you out slides on a good note all right so here it is so this is the bushling CM Futures market and I think last month we settled around 413 414 somewhere in there uh late last week there were some trades in that 445 range it’s up like 30 bucks so primee

that green little shoot at the end you know like like a was a welcome sign to maybe spring is sprung we’re gonna have a some cons some some demand for some new steel around here let’s hope let’s hope any ways but yeah I think I mean if if you got I mean obviously I don’t sell much on the bushling side I mean you obviously are you know you pay more attention to that than I do but uh I that doesn’t hurt the cause for guys with shredders you know because it’s you know I know they substitute depending on the pricing right um and us us you know poor scrap guys who just trying to cut up some HMS I mean we’re happy to see that that that bushing price move up you know everybody’s got to eat well spring is spring is going to sprung and you’re going to see all kinds of scrap flow I’m just can feel it in my blood oh I can only hope so I can only only hope so I got a few more trucks to keep loaded so we can only hope we can get some scrap

I love it all right man anything else anything what’s the what are you looking what are you thinking about April April feeling feeling like a good month good month for us us uh us scrap guys you know and at at the Easter celebration we said he has risen and maybe we might see April do the same thing you just never know ah way the ti in the Easter so I was I was uh whoever was out there chasing Easter eggs and found the golden egg don’t be afraid to share you’re afraid to share I got my 14-year-old out there chasing eggs looking for that golden egg luckily one of the young kids found well as long as he understands $300 heavy is a $300 heavy melt anymore I think we’ll be good you know we need yeah when they open up they saw five bucks like I thought this was a golden egg this is even a big macore like a Big Mac egg I’m like yeah kids I’m sorry that’s all I got all right man until we meet again take care see next uh next month and I hopefully this

this bll train keeps on rolling choo choo yeah all right thank you sir