The Trade – Episode #2 with Nick, Brett and Aldo | April 22nd, 2025

The Trade | The Trade Transcription

In this second episode of "The Trade," Brett dives deep into the copper market with special guest Aldo Jordan. They break down the current wild volatility and record-high copper spreads. Aldo explains how the COMEX index is increasingly influenced by financial markets rather than just supply and demand from consumers. They discuss the importance of liquidity, quality, and relationships for small to medium-sized scrap businesses navigating this challenging market. Aldo also shares advice on how to approach buying and selling in the current climate and touches on China's changing role in copper consumption. For help and more insights, you can reach Aldo Jordan at themetalsaggency.com. Produced by Recycled Media.

Transcription

# Podcast Transcription: A Scrap Life

**Host: Brett Eart**

**Guest: Aldo Jordan**

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**Brett:**
Welcome everybody. We have our first version of the copper trade with our special guest, Aldo Jordan. How you doing today, Aldo?

**Aldo:**
I’m doing well, man. Just coming off a day off on Friday. Feeling pretty good.

**Brett:**
I love it. I love it. I was excited when you sent Nick and me an email the other day with a link to something you posted on LinkedIn about the copper market spreads. Nick and I have been discussing doing this trade podcast. We also do it with Chad Ellerbach once a month. But I think small and medium-sized businesses sometimes get lost in the nuances of the market. Specifically, the copper market right now. It’s wild out there, man. So, give us a little breakdown. What are you seeing, Aldo?

**Aldo:**
It’s definitely been interesting to watch, if anything. We are at this intersection of market fundamentals changing, such as tariffs, trade, China, and demand. I believe the COMEX index is drifting away from true demand and supply fundamentals for those who consume copper. That’s just a function of the market participants. 2025 will probably be one for the records, in both good and bad ways.

**Brett:**
When you say 2025 will be different, are you referring to the spreads or the volatility, or all the above? What’s going to make 2025 so different or interesting relative to past years?

**Aldo:**
That’s a great question. One aspect is the fundamentals of demand and supply. The situation with China and their consumption is still uncertain. This uncertainty has caused a drift between the West Coast and East Coast markets since the West tends to be more of an exporter while the East consumes more domestically. The high volatility and record-high spreads, such as this April’s 14% of the index, indicate significant changes.

**Brett:**
Wow, that’s a big spread compared to the usual. How does that usually look?

**Aldo:**
The percentage spread used to be around 4% in 2022 and 2023. Now, when you see a 14% spread for a month, that’s three and a half times the usual. It reflects the volatility and unpredictability of the market right now.

**Brett:**
What can a person expect when trading number one and number two copper spreads today?

**Aldo:**
It’s challenging because when the market is illiquid, pricing becomes unclear. If there’s no liquidity, finding a price is difficult. A number two copper sale today for $1.05 to $1.15 under is reasonable given the lack of market liquidity. It’s about finding a liquid partner who can pay for the load, especially for smaller businesses.

**Brett:**
Right, and the quality of material your business produces becomes even more critical in these markets.

**Aldo:**
Exactly. Consumers prefer dealing with suppliers known for good quality and timely delivery. Traders don’t want to deal with poor-quality loads that distract from market happenings. It’s paramount to deliver consistently good-quality products, especially when the market is shaky.

**Brett:**
That’s a valuable reminder. Your reputation is critical, especially when times are tough.

**Aldo:**
Absolutely. During volatile markets, maintaining good relationships and delivering quality consistently is what will keep operations running. The market doesn’t get liquid overnight, and players who stay consistent will see the benefits.

**Brett:**
So, regarding buying strategies, what advice are you giving to operators who look to you for consultation?

**Aldo:**
In this market, buy as wide as you can and sell quickly. Execute sales in smaller lots to cut the risk of day-to-day market fluctuations. Staying liquid is crucial and allows you to play a new hand daily, reducing stress from market unpredictability.

**Brett:**
What are your thoughts on hedging for operators?

**Aldo:**
Hedging isn’t a one-size-fits-all solution. It’s viable for those with significant monthly trading volume, about 4-5 truckloads. It does cost money and requires a robust accounting strategy. Understanding the purpose of your hedge strategy, whether it’s for inventory fluctuation or margin protection, is essential.

**Brett:**
What’s caused the widening spread between COMEX and LME in your view?

**Aldo:**
COMEX has become more of a financial market driven by speculation rather than actual supply and demand. Financial home participants are more numerous, influencing market values beyond traditional trading values. Hence, COMEX reflects a financial sentiment more than it does the industry basics.

**Brett:**
Final thoughts, Aldo? How can people reach out if they need your expertise?

**Aldo:**
Despite the turbulent global market, copper remains crucial globally and domestically. Make sure to hit market basics—buy wide, process quickly, sell fast, and ensure good quality with a liquid partner. You can reach me at metalsaggency.com, where we offer both consumer representation and consulting services.

**Brett:**
Thank you for joining us, Aldo. It’s always enlightening talking to you. Your insights are invaluable!