Truth be told, I have known Aldo Jordan for years, since the days when we were partners with Schnitzer Steel… yes I know, they are now Radius Recycling. That being said, Aldo has always been a “relationship” guy, in scrap world terms that means someone that you can do business with for a long time because they realize there is always give and take which means one side isn’t winning all the time. So a few years back, we were sitting on a rooftop at a bar somewhere in Chicago and he was explaining his plan to me about starting a business that had a brokerage-type feel but was much more than that in his eyes. It wasn’t nearly as transactional as your typical brokerage and was more of a partnership along the lines of a “fractional” material marketing business.
I liked the idea at the time, and told him to go make it happen, go bet on yourself! So when he called me a year or so ago and said he had pulled the trigger and got it done I was excited for him, “welcome to the dark side” of self-employed, where you get to eat what you kill but you better be a good hunter or you could go awhile without a meal! Haha…
In all seriousness though, I am grateful that we were able to squeeze in this podcast down in Vegas at ISRI/REMA this year and let him tell his story. If you know me, I love the idea of hanging around and talking to true hustlers and Aldo fits that bill. So please enjoy this podcast, please enjoy this newsletter, and more importantly please enjoy the 4th of July celebrations with your families this weekend!!
I trust this update finds you well and thriving. 🌟 In this month’s edition, we delve into the dynamic trends shaping the steel and scrap metal industry. Brace yourself for a thrilling ride through market fluctuations, where each dip and surge reveals a compelling narrative of opportunity.
📊 Month-to-Month Analysis 📈
📈 Bull Case 🚀
- 🔥 Crude Steel Production: Currently at 77.0%, a decline since June 1st of 1.5%.
📈Turkey 80/20 HMS: Increased from $379.50/MT to $390.30/MT. (an increase of 2.8%).
📉 Bear Case 🐻
- ⏳ HRC Lead Times: Stagnant at 3-4 weeks.
- 📉 HRC May Futures: Slipped from $746 to $684.00 in May (a decrease of 8.3%).
- 🌎 Steel Imports: Total and finished steel imports are up 8.0% and 5.5%, respectively, year-to-date vs. 2023.
- China Shanghai Steel Rebar Prices: A decline from 3,519 to 3,301 CNY in June.
- Copper Prices: A decline from $4.58 to $4.39 in June (a decrease of 4.1%).
- Nickel Prices: A decline from $19,761.58 to $17,241 in June (a decrease of 12.8%).
📌 Noteworthy Observations 🧐
- Buyer Pressure: Worthington Steel Flat Rolling Processing noted “Pricing slid week-over-week, driven mainly by buyers remaining on the sidelines and destocking. Hot roll coil pricing is in a wide range, and expectations are that there is still more downside pressure. Analyst pricing is somewhere in the $700-$720 range for hot roll, but those are averages, so most buys are thought to be below $700 ton. Some mills have shown resistance in pricing at the lower levels, but big buyers believe they can do much better; rumors of “deals” are all anyone wants to discuss.”
Converter-nomics, Understanding Market-Adjusted Converter Prices, & Converter Technology to Mitigate Risk
by Becky Berube
Converter-nomics: In June, the world of precious metals met in Orlando for its annual conference with several renown platinum group metal (PGM) experts discussing, and sometimes debating,the nearly two-year dip in catalytic converter recycling volumes, PGM prices, and the outlook for the future of each. Continued inflation, higher interest rates, the strong dollar, and the ever-increasing Federal Reserve Rate, combined with uncertainty in the world, are bad for PGM demand and consumers that want to buy vehicles. The low PGM basket price amidst increased mining costs, skilled labor shortages, a weakened Rand, increased energy demands, and depleted PGM stockpiles showsthat supply will remain sideways for the near future.
Market-Adjusted Converter Prices: The outlook above does not appear overly rosy, and the average converter price has come down in the past two years. That said, it can be hard for recyclers to temper expectations and to get excited about converter sales again. A recent supplier review to look at three loads recycled in the past three years on recovery, or assay, yielded very insightful data when adjusted for current markets. See data table Read More.
Happy Independence Day. Be sure to reflect on all the great things this country provides, despite how easy it is to get sucked into focusing on the negatives. Enjoy time with family and friends, and please take extra care to ensure all your fingers are still attached come July 8.
Metal prices peaked around the end of June and have steadily drifted lower since. Driven by speculators and investors, the boom/crash cycle that recently played out with crude oil, iron ore, and bitcoin followed true with copper and aluminum. Aluminum is off $175/ton over the past 30 days while copper is down $500/ton. I suspect there is more room to fall as inflation and high interest rates continues to drag on economic growth, but see a relative floor near 2300… Read More.
