Metal Monday November 8, 2021 with Nick Snyder and Brett Ekart.
Play the youtube video and follow along with the text below.
Nick Snyder:
All right. Welcome everybody. We got a Metal Monday going on right now. How you doing Brett?
Brett Ekart:
I'm good, man. Just trying to shake the cobwebs after a week in Vegas.
Nick Snyder:
Yeah, we just got back from Vegas. We went there for Converter Reclaim. We had a booth at SEMA and it was awesome. The booth was awesome. The potential customers that we talked to. The real need for what we do on the converter side was clear as day after the thing, because it costs a lot of money to do that and we did it and it was fun and hope to do it again.
Brett Ekart:
The best lessons in life are the most expensive. Good or bad, right? [crosstalk 00:00:50]. That seems like the way it is, but my dad always told me you got to spend money to make money. And if you're afraid to spend, then you're probably never going to set yourself up for a position to make if you're not willing to shell it out at the beginning.
Nick Snyder:
Well, you might as well talk about those markets. How are those markets doing? [crosstalk 00:01:15].
Brett Ekart:
You know, the ferrous Market's strongest month, depending on the region, depending on the grade, anywhere from 20 to 30 bucks. I've heard in the Midwest that's even stronger. As far as on this end, the west coast may be not as strong right now, but definitely trying to keep pace.
Nick Snyder:
Why is that? Is it because they're shipping to different ports? Is it-
Brett Ekart:
It's just a depends. It depends on the steel mill you're dealing with. It depends on the region. It depends on what their need is. It depends on... There's just so many factors, [crosstalk 00:01:51] right?
Nick Snyder:
Is it because there's a lot more steel mills back east too. They have a lot more to feed.
Brett Ekart:
Yeah. The Midwest... There's more steel mills. I really believe 22, if this economy holds on, can be a bang up year for iron ferrous material. Because the reality of it is, as long as the steel mills are holding even close to what they're clipped, the pace that they are today, there ain't enough iron out there. And I've been preaching that drum for a little bit and banging that drum for a little bit, but I'm telling you, I've been doing this for a little bit and I truly, absolutely believe that if the economy doesn't just take a crap, there ain't enough iron out there. There's not enough copper out there to supply what's coming down the line. [crosstalk 00:02:42].
Nick Snyder:
Like the infrastructure bill. [crosstalk 00:02:43].
Brett Ekart:
And if it's a paired back infrastructure bill. I mean, there is a reason why BlueScope Steel bought Metal X. At least the ferrous side, right? There's a reason why these steel mills are buying the scrap producers. They're trying to dig down deeper into the value chain because they know that what they don't want to have happen is they don't want to lose the feed stock, right. Because the worst thing a steel mill can do is lose feed stock. And if there's ever an opportunity for say, a shredder or an export facility or whatever that is to go somewhere else, other than the steel mill that they're used to selling to, they're trying to stop that... They're trying to cut the snake off at the head, right. Say, "Okay, like now that's our snake. "Like we're going to, we're going to feed our steel mill with our scrap, try and control the cost a little bit, but also control the feeds stock to where it's not going to go somewhere else." And if that's not a clear indication of where this thing's going, I don't know what is.
Nick Snyder:
And to piggyback on that, what Pete Thomas and Scott were talking about last weekend on one of our other podcast, Cat's Corner. They were talking about... I forget the name of them. Just one of the biggest minds in the world bought another one of the biggest minds, like billions of dollars moving money. That just shows how confident they are in platinum, palladium, rhodium. [crosstalk 00:04:08]. That's what we were talking about. They would not have bought that mine if they didn't know the need for that material coming into the next 20, 30 years and [crosstalk 00:04:20].
Brett Ekart:
The only reason that platinum, palladium, rhodium are where they're at today is because auto production is down. And if you think auto production is down and it's going to stay down, like at this level forever, you're crazy. [crosstalk 00:04:31]
Nick Snyder:
I know we say almost every week, but once that turns on-
Brett Ekart:
There's not enough metal. There's not enough copper. Do you think that there's a reason why the COMMAX warehouse is at multiyear lows as far as material in there. Because there's not enough metal to grid everything [crosstalk 00:04:51].
Nick Snyder:
So they're burning through all that back stock.
Brett Ekart:
100%. [crosstalk 00:04:54]. And here's the thing, if you listen to Matt Watson, who's a smart, smart guy, he'll tell you what's going on in the mining sector, is the reason mines are buying other mines is because it's cheaper and easier and more instantly gratifying than trying to build a mine. [crosstalk 00:05:14]. To start a new one because everybody has that "not in my backyard" mentality. So they want to be green. They want to electrify everything, but they don't want you to dig for copper in their mountains, right? So where is it going to come from? And I think that's the same thing that's going to happen across the board with all these metals is... Is the next wave of infrastructure, the next wave of electrification, the next wave of you name it, the material has to come from somewhere, which is why the recycling and what we're doing every day is so crucial.
Brett Ekart:
But it's also because everybody wants it to be greener and wants it to be carbon-free, but they don't want to pay the price of having a windmill in their backyard, a solar panel, a solar farm in their backyard or a mine in their backyard, except for that's all three of those things combined is what it's going to take to truly get to carbon neutral.
Nick Snyder:
Yeah. And that's where us recyclers are going to come in. We're going to help get all the above the earth material back into the flow. And obviously there's going to still need to be some mined out too, but the more we can keep out of getting lost in a landfill, getting lost in just wherever. As long as we can keep it flowing and going and keep that open communication with our customer. It's just going to help everyone. [crosstalk 00:06:35]. Well, I'm excited to see what 2022 brings and what the end of this year brings.
Brett Ekart:
All right, sir. [crosstalk 00:06:42]. Have a great week, everybody.