## Welcome to A Scrap Life
**Host: Brett Eart**
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 Eart.
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### Brett Eart
All right, we got a very special copper trade today. Although not online, in person, he drove all the way to Idaho to hang out with us, knucklehead. You drove to Idaho from California, 981 miles. I saw it today.
### Guest (Name not provided)
Well, thanks for making the trip. Thanks for checking out our facility today. Excited to have you in person and excited to talk about copper and a lot of volatility from our last call. We’ve seen prices go from $5.80 to $4.50-$4.40. Things change in two weeks. Now we’re back to using the coax. Things stabilize a bit, right?
### Brett Eart
Well, tell us what’s going on with copper this last month.
### Guest
Well, since we spoke, we had the big U-turn, I call it the big correction. The market was anticipating tariffs hitting the prime material, which is cathode. I think everyone penciled that price in, and the week prior we saw a 50% market rise from the year’s start. Then the news came that cathodes would be exempt from tariffs, affecting demand but leaving parts of the market uncertain.
Cathode was the big exemption and what drove the market rise. The cathode is heavily imported. Without enough domestic production, roughly two-thirds of cathodes are imported, driving up its price. This was originally a big concern, but things have stabilized with news of the exemption.
### Brett Eart
And on the export end, there was some discussion on potential tariffs that didn’t happen, right?
### Guest
Yes. There was a concern, but it ended up as a recommendation rather than a rule. The Department of Commerce provided clarification, confirming no immediate changes, mostly due to logistical and priority reasons within the government. Although the U.S. exports a significant percentage of the world’s copper, domestic consumption does not match exports due to various constraints, including environmental laws.
### Brett Eart
So, what’s the long-term outlook then, especially for our industry on the West Coast?
### Guest
Investments are being concentrated in the southeast region due to access to labor and manufacturing. On the West Coast, we’re left out of this expansion and struggle logistically. For instance, your decision to invest in wire chopping equipment over a decade ago was wise, eliminating the uncertainty and claims issues with exporting insulated wire to China.
### Brett Eart
What are the biggest consuming countries of scrap right now?
### Guest
China remains the top consumer, but they’re experiencing systemic issues, including high debt and slow demand growth. India is emerging as a player, working to fill infrastructure gaps but lagging due to decades of underinvestment. Despite the challenges, investing in infrastructure is critical, something China has done extensively over the years, despite criticism.
### Brett Eart
Back to copper volatility—any predictions on the next cycle?
### Guest
Markets fluctuate with global dynamics, such as the US-China trade relations. With the recent 90-day extension on tariffs, we’re in a ‘wait and see’ period. Companies need to remain nimble, especially smaller operators who can quickly adjust strategy amid shifts.
### Brett Eart
So, what’s behind the volatility in the trading markets, specifically Comex versus LME?
### Guest
Comex’s volatility stems from its high involvement of financial institutions focused on arbitrage, unlike LME, which adheres more to physical trading. The LME’s market trends more towards stability because of its operational rules and daily exposure limitations.
Plus, LME’s ownership by Chinese companies adds an interesting dynamic—there’s a vested interest in maintaining lower prices for consumer advantage. When considering tariff impact, this ownership gets strategic to control metal prices globally.
### Brett Eart
Thanks for joining. We’ll see you in Louisville at the Scrap Expo for more insightful discussions on scrap markets and their opportunities for growth. Safe travels!
### Guest
Thank you, excited to be there and talk more on driving growth, especially for small and medium-sized businesses in these challenging times. Thanks, Brett, looking forward to more of these engaging conversations in person.