Metal Monday August 9, 2021 with Nick Snyder and Brett Ekart.
Play the youtube video and follow along with the text below.
Nick Snyder:
All right. We are into August. We should have repairs prices knocked out. You get those all settled?
Brett Ekart:
Yup. Yeah, I think depending on the grade, anywhere from 10 to 15 bucks down.
Nick Snyder:
Better. I mean, other places we're hearing 20, 30 on some [crosstalk 00:00:21].
Brett Ekart:
I feel like, maybe if you sold early, you probably did okay. I feel like as things wore on, it feels like it's kind of... There's not a real big reason to take it down other than just the export market had softened up a little bit going into the beginning of the month. But just reading some articles, even this morning that the ferrous market might be starting to firm back up, places like Turkey and whatnot. But I don't know, the dollar has also kind of gained some strength over the last few days. It's kind of a crazy market out there right now. On the ferrous side though, I feel like the steel mills are still going great guns, and new steel pricing, they're not announcing any price drops anytime soon.
Nick Snyder:
Well, there's a new steel mill going online here soon in Texas, right?
Brett Ekart:
Yeah.
Nick Snyder:
New mill in Texas.
Brett Ekart:
I think it's an SDI one. And then you got Cascade coming back online here soon. I mean, you would imagine that's going to help for us West Coast guys. And the Nucor Mills, I feel like they're being fairly aggressive right now, at least near as I can tell.
Nick Snyder:
I had a good conversation with Jennifer Betts on Friday on her clubhouse, just kind of talking about... And what we really got into is kind of like the disconnect is truly to markets now. It was all kind of combined new steel and scrap. It all kind of followed each other. But now you're not seeing that. You'll see new steel go up and scrap go down. Especially with rebar, we got some rebar customers that all say, "Hey, we're hearing this," And they used to use that and he's like, "Dude, I can't use scrap anymore to plan."
Brett Ekart:
No.
Nick Snyder:
He's like, "I've been doing that for 20 years." And that's just kind of interesting to me that it just goes to prove, nothing stays the same. You got to be willing to change and adapt.
Brett Ekart:
Exactly. And also the things that swing one way, usually swing back hard the other way. So anytime you get a good run in something, don't count on that sticking around forever because it usually snaps back. What you're looking at, like some of the base metals today, you're getting some of that snap back. Strong dollar, oil's come off. I think that's kind of inevitable. You're going to get these kind of bigger, as the markets push up higher, you're going to get some big swings. What are you looking at right there? It's copper off...
Nick Snyder:
Off six and a half cents right now. COMEX is 428 right now. And last week at this time we were talking about, "Yep, $5 is coming." And it's just funny in a week, how much can change. All right, well, $4.
Brett Ekart:
Yeah. I think, I don't know. It feels like we're kind of in that trading range right now. I pay attention, but I sold a lot of non-ferrous last month. So for me personally, I'm hoping or not, I'm kind of enjoying it, watching it come down and take a breather because I'd like to be a buyer right now. And I hate buying when it's at nosebleed levels because then you're just waiting. Then you're trying to hurry and get it processed.
Brett Ekart:
And in our business, where we don't broker anything, we basically, everything we sell we're processing. So even if we're buying on the market, and then it takes us 20 days to get it through the system and get it to market somewhere else, and sometimes longer. It depends on what our inventory and labor situation looks like. I don't like when it's getting real aggressive on the buy when it's at nosebleed levels. I kind of-
Nick Snyder:
Well, we can accrue A lot of risk, and that's what we do. We've got that built in. We know how to handle it. But that's where some people selling us some material, I'm like, "We got to account for some of the risk," because we can't be that vulnerable. So we want to always get the best ferrous number out there. But in the commodity business, sometimes you got to throw a dart at a dartboard to guess.
Brett Ekart:
Exactly, yeah. And I don't know, for us, we build it in. I mean, that's part of the deal. But when the prices come off a little bit, especially on the non-ferrous side, to me, it's right now, it's a good buying opportunity if the material is available. I don't mind being aggressive when the market's turning down, just because I feel like that's a good time to accumulate. But when it starts going crazy, and I've said this last time, even though I anticipate a $5 copper, I'm not waiting for it.
Nick Snyder:
Yeah. We're not banking on it.
Brett Ekart:
No. I'm selling into that every good market day I can. And sometimes I sell early.
Nick Snyder:
Well, the analogy that you've told me that's always stuck with me, is you look at what we got going out in the warehouse, like a farmer with a crop. When it's ready, it's time to move it.
Brett Ekart:
Exactly.
Nick Snyder:
Yeah. There's this misconception with, I think, with scrapyards everywhere that we hold. We hold, hold, hold. We don't have the luxury to do that, or it's just not good business.
Brett Ekart:
We don't hedge. So we already inherently, I say we, I gamble maybe a bit on some stuff. But I try and pick my battles because you can't gamble on everything all the time. You can't not hedge everything all at one time. So, I mean, I was just having this conversation with somebody this last week. And I said, "Right now, for me, I feel like there's a lot more upside in the PGMs." So maybe I will sit on some of that material and see where that goes. Versus last month, I really felt that we were in a good spot to move non-ferrous. We had a lot that we had ready to go. So we sold a shit load of it. We moved a lot.
Brett Ekart:
This month, if the markets keep acting like this, maybe this is more of a good accumulation month. So we just play it by ear. We get the material through the system. We'd have some few contracts that we have that we have to deliver on, on the non-ferrous side. But other than that, we just, it's a feel game. Sometimes you win, sometimes you lose, but you're just going with your gut.
Nick Snyder:
And there's a few things out there, the infrastructure bill. If that thing ever gets through, that's going to make some waves in what we do. The semiconductor shortage, that thing gets fixed again. The cars start going full production at Ford and Chevy and all of them, that's going to change a lot of things. There's some things that could all kind of hit at the same time, and you might see it go just crazy for a little bit. And I think that will happen. It's just a matter of when.
Brett Ekart:
Oh, yeah. It's coming back down to cashflow.
Nick Snyder:
Oh, yeah. Then the cashflow. Yeah.
Brett Ekart:
Who's got the most and can last the longest.
Nick Snyder:
Exactly. Well, I guess we'll do this again.
Brett Ekart:
All right. Have a great month of August, everybody. And we'll talk to you later.
Nick Snyder:
Thanks, everybody.
Brett Ekart:
All right.