**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.*

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**Brett**: All right, everybody. We’re back. It’s May 2025. Crazy, just a couple of days before Mother’s Day. Shout out to all the moms out there that keep the lights on and hold the fort down while guys like Chad and I are out there trying to figure out this crazy scrap world. Happy Mother’s Day to all the moms. Thanks, Chad, for coming out and discussing the trade once again. No more Bulls versus Bears, just the trade. Let’s talk about what’s going on in the world.

**Chad**: Yeah, we’re late to the game. We can honor our mothers. Life happened this week, and it’s perfect that we’re late because on Mother’s Day weekend, that’s the way it is. It’s my youngest son’s birthday today, and we had to wake him up with a happy birthday song. I reminded him of the pain his mom went through for him 12 years ago. So, appreciate your mom today, even if it’s your birthday.

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**Brett**: Let’s dig in, Chad. The reality is, it’s been an interesting and fragmented market. Let’s go through the Bulls versus Bears and the points that make sense. Why it traded the way it did this month, and what might be on the horizon. The markets are crazy, and hopefully, people will get something out of it.

**Chad**: So, starting with the macro view, the overall economy didn’t change much: S&P 500 and Dow Jones were stable, but crude oil is down significantly. From $71-72 at the beginning of April to $57. This is due to tariffs, logistics being down, and some caution out there. OPEC and other countries are pumping oil which affects prices. What’s your take?

**Brett**: Trump doesn’t get enough credit for managing aspects like the inflation index, which includes the price of oil as a major factor. With gas prices in the low twos and diesel around three bucks, it makes it easier for those who haul freight. While I’d love $500 a ton iron, I’ll take $5 diesel. I think oil prices coming down can be positive.

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**Brett**: As for steel production, it’s at 76%, slightly up. Despite the world feeling like it’s ending, steel orders are somewhat stable. Lead times are flat at around five weeks. This gives a solid buy program because you know what your sale looks like.

**Chad**: Hot roll prices have dropped considerably, and lost pricing power is visible internationally and domestically. For example, Chinese rebar dropped from 3200 yen to about 3000.

**Brett**: Dr. Copper had an interesting April with inventories super low, which could quickly boost copper prices, especially if trade talks with China move positively. Locking in spreads on copper could be advantageous if you want to take a calculated risk.

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**Chad**: On scrap substitutes, like pig iron, April was flat. With a 10% tariff on incoming pig iron, it’s rumored not much has traded. This market will be interesting to watch as prime markets’ prices are considerably cheaper because of the overall steel demand landscape.

**Brett**: As for the tariffs, even though they were initially chaotic, they might bring investment back into the US. If some remain sticky, there will be good opportunities for businesses to capitalize. Like with previous tariffs that benefited steel mills and scrap guys.

**Chad**: Yes, the $10,000 electric cars in China like the BYD versus much more expensive American cars are a sign of changing times. Scrapyards need to consider inefficiencies and look for opportunities to get more efficient and adapt.

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**Brett**: Ultimately, you have to think outside the box, using challenging times as opportunities to get better. Whether it’s how you buy, process, or sell. Adjust pricing with customers when the market changes and make sure they trust you for the next time.

**Chad**: That’s a great perspective. It’s not just about cutting costs; it’s about using the opportunity to improve processes and find efficiency. Solve big problems and position yourself for better times.

**Brett**: Yeah, solve bigger problems and you’ll make more money. There are always problems in the trade – export, import, buy, sell problems. Whoever lasts the longest in these times, while positioning themselves correctly, can come out in a strong position when things look up.

**Chad**: Thanks, Brett. Appreciate your insights and breaking down the charts this session.

**Brett**: Thank you, Chad. We’ll get prepared for June. It’s tough out there but we’ll keep pushing forward. Appreciate you being here.

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