## Scrap Life Podcast
**Host**: Brett Eart
**Guest**: Aldo, Copper Trader
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**Introduction**:
Welcome to 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 Eart.
**Brett**:
All right, today is August 13th, it’s Thursday. I know that my kids started school yesterday, which was awesome because my Wednesday work from home was quiet. So I officially am back to working Wednesdays at my house, trying to keep it quiet. I was talking to Aldo, we’re about to discuss the copper trade. It’s an ever-changing field, but he noticed something that I thought was pretty awesome, and I want to share it with everyone.
**Aldo**:
Thanks, I appreciate it.
**Brett**:
Your business has now been open, alive, running, and making stuff happen for three years. Congratulations! I went through the stats with you, and I mentioned that the odds of a business lasting three years outside the tech industry is about 50%. So you’ve beaten those odds. In the tech world, it’s like 10% for three years or more. Your business is a mix of technology and traditional trading, so you are in the 25% range. You’ve outlasted probably 75% of those who tried. That’s no small feat, sir, so here I am to give you your flowers and say congratulations.
**Aldo**:
Thank you. I appreciate it.
**Brett**:
So, do you see copper as more than half of your focus in your business?
**Aldo**:
It’s probably more than half of our business overall, just because of the volumes and complexity. We handle hedging, payment, and transportation. It accounts for about 60% of our business, which keeps us very busy.
**Brett**:
Well, the logistics around copper are crucial. If a copper load is sold, it should be the first priority to be out the door. It’s not just about having high-value inventory sitting around; it’s also about cash flow. I did the math for two loads alone that equaled 91 loads of shred feed cash-flow-wise, dollar for dollar. Logistics matter, especially when it comes to copper.
**Aldo**:
The payment terms now with the new level, notably on the financing cost, are becoming a concern. For instance, financing costs are about $50 per day. For a net 30 payment, it’s $1,500—quite a bit to account for. You have to incorporate those costs into your buy price.
**Brett**:
Exactly, and it’s critical for those buying shops to consider this in their costing strategies. It affects your transportation and receivable costs before shipping happens.
**Aldo**:
It’s a good point. This market, especially copper, involves a lot of financial speculation. There are many aspects of this business that need careful calculation, such as hedging costs and trading dynamics.
**Brett**:
The challenge with copper is forecasting its market behavior. The swift price changes mean you can’t always predict correctly, making it volatile and speculative for businesses.
**Aldo**:
Absolutely, volatility has been prevalent, and this requires us to be very diligent with our strategies.
**Brett**:
So how do you see the trade dynamics affecting copper inventories and market flows currently?
**Aldo**:
There’s a lot of supply out there, mostly on the financing side, as credit lines can get squeezed by rising market values. The abundance of scrap availability remains high, largely driven by rising prices enticing those who’ve been stockpiling to sell.
**Brett**:
The copper market is clearly impacted by many external factors, and it shapes how we approach export restrictions and tariffs.
**Aldo**:
Indeed, and those tariffs have significant effects on pricing. Our worry is about how export restrictions might limit trade flow and set unfavorable precedents in the future.
**Conclusion**:
Trade smart, trade wise, and if you need help, reach out to professionals like Aldo. Thank you for tuning in to this insightful conversation about the copper trade. Congratulations again, Aldo, on your business achievements!
**Aldo**:
Thank you very much, Brett.
**Brett**:
All right, have a great one!