### A Scrap Life Podcast: Understanding the Copper Market
**Host:** Brett Ehart
**Guest:** Aldo
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**Brett Ehart:**
What’s going on, Aldo? We’re excited to have you on. We’re trying to put together our trade podcast to focus on non-ferrous metals. We’ve always covered ferrous with Chad Eller Brock, our resident Ferris expert, but there’s been a void in the conversation about non-ferrous and its impact on small and medium-sized recyclers and scrap dealers. Our goal today is to delve into the aluminum and copper markets. We sought out knowledgeable people to have these conversations, and we found you. So, thank you for joining us to discuss copper this morning. We’re planning to make this a regular feature. Thanks for taking the time out of your vacation.
**Aldo:**
Well, thank you, guys. I really appreciate you having me on, and I’m grateful for the kudos for finding me today to talk about copper. We’ll do our best.
**Brett Ehart:**
I think you know enough to be dangerous, right? That’s what we want. The goal here is to help your small and medium-sized guys, maybe even the big ones if they’re listening, understand market moves. When you’re talking about those who don’t move massive loads of copper a month but mixed loads, market swings, while interesting, don’t always mean much to the average trader. That’s why it’s great we have Nick here, handling all buys for our yards internally. When people ask about copper prices they’re hearing on Bloomberg, or news about tariffs, we need to explain to them properly.
I was just on the phone with one of our biggest comwire customers. He’s facing a huge price increase and needed to understand why his copper prices were so affected. This is why it’s essential to have someone like you, smarter than us, to explain these shifts.
**Aldo:**
It’s a unique situation we’ve never seen before, gathering media attention because of its impact. In practice, it affects medium and small scrap dealers in a few ways. Comx is less a driving index for copper trading, with many moving to LME, although not perfectly or overnight. LME has its issues, as it’s owned by a Chinese company, but we’re transitioning to it more because it reflects physical trading better than Comx, which has become more a tool for financial institutions rather than physical traders.
Most of the global copper trade bases its pricing on LME, and as Comx disengages from actual physical trading, it makes sense for us to shift accordingly. This transition signifies a move towards more globally aligned trade practices.
**Brett Ehart:**
It’s clear that the financial institutions are using Comx as a trading vehicle without actually taking possession. It’s having big implications on the physical market. We’ve all had to readjust our strategies in light of these changes. As a buyer and seller, it’s crucial to understand the dynamics of sale prices. Once the market stabilizes, we’ll go back to focusing on who’s better at customer service and taking care of their clients.
**Aldo:**
Fundamentals will prevail through this shift. Most global copper trade historically used LME as a base, and while Comx has been significant in North America, the shift was inevitable against the backdrop of changing global trade practices and demands.
**Brett Ehart:**
What advice would you give to small operations on the buy side? What practical, day-to-day guidance would keep them informed and prepared for market changes?
**Aldo:**
Good trading relies on liquidity and having a market where someone’s willing to buy. It’s crucial to establish good relationships with customers and make sure your pricing reflects current market conditions. The index might go up, but actual pricing doesn’t always follow instantly. Being proactive in communication with your clients is key to maintaining strong relationships and ensuring they understand the market realities.
**Brett Ehart:**
For sellers, it’s crucial to stay updated on current trading conditions and make sure you understand your finance costs, especially if you’re sitting on inventory. In the tumultuous months ahead, keep an eye on LME versus Comx pricing and remain competitive.
**Aldo:**
For sellers, today’s rough indications for Brite are trading September at minus $125. Number one copper is at minus $135, and Birch Cliff is around minus $150 to $160. The aim is to sell on LME-based pricing for better alignment with actual physical trade value.
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**Contact Aldo:**
Aldo can be reached via email at aldo@themeadowsagency.com or on his cell phone at 510-219-0307. He’s available anytime you need assistance in the scrap time zone.
**Brett Ehart:**
Enjoy your vacation, Aldo. Thanks for joining us and providing such valuable insight into the scrap market.
**Aldo:**
Anytime, guys. Take care and be well.
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