Scrap You Later

How Much Longer Will Oil & Covid Affect Scrap? - 6/30/21

June 30, 2021 iScrap App Episode 42
Scrap You Later
How Much Longer Will Oil & Covid Affect Scrap? - 6/30/21
Chapters
Scrap You Later
How Much Longer Will Oil & Covid Affect Scrap? - 6/30/21
Jun 30, 2021 Episode 42
iScrap App

Oil prices and Covid have undoubtedly impacted the scrap metal world, and we've talked about it a few times before. Copper also hasn't made any large moves and we're happy it looks to be steadying out. More in this week's report.

📲Download The App

✌️
Become A Patron

iScrap 2.0 Email Alerts

Support the show (https://www.patreon.com/iscrapapp)

Show Notes Transcript

Oil prices and Covid have undoubtedly impacted the scrap metal world, and we've talked about it a few times before. Copper also hasn't made any large moves and we're happy it looks to be steadying out. More in this week's report.

📲Download The App

✌️
Become A Patron

iScrap 2.0 Email Alerts

Support the show (https://www.patreon.com/iscrapapp)

Tom Buechel:

Hey, scrappers, it's Tom from the iScrap App, and today is Wednesday, June 30 2021. And can you believe that today's the last day of the first half of the year, because we certainly can't, this year has certainly been a year, you know, to remember in a very positive light. But first and foremost, we'd like to wish all the families down in Florida who, unfortunately lost loved ones, we'd like to wish them nothing but support and thoughts from the team here at iScrap, Rockaway Recycling, and RRCats.com, we just want to lend all of our support to them. We've made donations to hopefully help some of the families as well as possible, but we just want to, you know, wish condolences because, you know, at the end of the day, it's not just about making money. Sometimes it's about talking about people and helping to learn and nothing but the best. So here we are, with the different scrap prices, we're going to talk scrap, copper, aluminum, but if there's anything that you want us to talk about, please, by all means ask us questions. We're live on Facebook and on YouTube every Wednesday afternoon. 1pm. Eastern. So you know, 95% of the Wednesdays, we're here. So you know, we're we're going to be but if you're watching this afterwards, don't just think that we ignore your questions, ask your questions, so we can make sure to get you those answers. But if you're looking to learn more about scrap, why would you not want to get free tools. And, you know, while you're doing it by becoming a Patreon supporter in July, and in August, we are giving away all types of DeWalt tools. So become a Patreon supporter today. This way, we can give you some cool swag that will give you the ability to make more money with your scrap. So without further ado, let's get right into what we've seen in the markets over the last week. And we'll talk about copper, copper prices in the last seven days is exactly how I'd like it to be steady, very little movement, not a lot of market pushes this way or that way. It's really been nice to see. And there's a lot of different reasons why. Two weeks ago, we talked about the Federal Reserve, they talked about changing interest rates, we talked about the Chinese flooding the market with copper, because they didn't like where the prices are. And now we're two weeks later and having two weeks to be able to absorb things, have the Federal Reserve Chairman come out and say, you know, while the rates are going to change for the interest rates, it might not be in 2022, it might be toward the end that spooks market investors, and a lot of people are going to say but here's the infrastructure plan. Well, there's an initial agreement to an infrastructure plan. And what we've learned is that investors kind of have baked that into the pie already. So we didn't see massive commodity movements based on a potential infrastructure plan, especially when you look at a $1.1 or $1.2 trillion plan. And there's only like 10% of it like only $125 billion, that's actually going to be going towards hard infrastructure that you could see roads, bridges, tunnels, guardrails, things like that. So the the commodity demand is not going to be pushed heavily by some of these government run projects. I remember talking about this two or three years ago, when Trump was getting ready to do the wall. And everyone's like, Oh, my gosh, steel prices are going to go crazy. No, no, they're not. You know, we need steel all the time for buildings for cars for infrastructure. But unless you're doing some type of a project, that's just so enormous, that's going to be such a market shifter, you have to figure that when governments when, when contractors looking to do large products, they put orders in foreign advance. And let's say they need a billion pounds of steel for these projects, which could be real numbers, they're going to be having that delivered over a period of time, which means that the demand is not just here, right now. It could take months years for that demand to really be not only materialized, but also fulfilled. So those copper prices, those steel prices are not fully driven by large infrastructure projects. They're more driven by day to day uses. How're the homes being built? Are there commercial projects that need a massive amount of rebar? Are there countries continuing to push infrastructure? You know, things that we've talked about in the past countries like India and China, you know, back in the 90s, in the early 2000s, the Chinese had a humongous infrastructure push, they wanted their all their residents to have more access to the internet, more places to live better roadways, better infrastructure, so they absorb the massive amount of commodities. The the Indian government in India also are looking to do a similar thing, but right now they're dealing with a massive supply chain disruption because of COVID. You know, 2020 was a bit of a last year production wise. Now, this year, they're getting hit so hard inside their country, that the production that they're doing for the outside countries is way down their own countries getting ripped apart with COVID. So their own infrastructure, which would be a major, major market mover is also on hold. Now, when you look at other things that are going on in the economy and the worldwide economy, because again, we've continued to push commodities are not US based commodities are worldwide things. And when I tell people about this, they kind of, you know, think twice, because you just think about copper prices here in New Jersey, Missouri, Hawaii, Alaska, California. But these are commodities used around the world, just like oil, gas, grain, beef, pork, all these are worldwide things, right. So until we hear the Indian government saying, Hey, we're gonna have a massive infrastructure push, we're going to need 2,3,4,5 billion pounds, tons of steel, whatever the crazy number ends up being, that is a market mover. Right now we've seen the markets moved by multiple things inflation because of $6 trillion over the last 14 months that's been injected into the economy, just from the United States. We've seen demand from supply chains where in other recessionary periods, and this is really important to think about and to acknowledge, think about 2008 financial market collapses, mortgage problems, people lost their 401 K's massive, decreased in investments, portfolios were down, people were scrambling to get cash, because of the financial system was so disrupted, large banks going out of business, you saw massive fraud that was going on. That was a recessionary period, almost a depression airy period. But a recessionary period that really walloped people right in the wallets, where if you look at COVID, and 2020, where the government printed money for stimulus payments, now they have child tax payments, and they had more stimulus payments, and they've more stimulus payments, and they had the PPP, and then the second round of the PPP, then they have different rules. You know, it's almost word vomit at this point. But we're in a much different place than we were 13 years ago, because people have been given more stimulus, and about 50% of the families across the country are going to be able to have more money in their pockets from child tax credits and things like that. You're gonna see people buying more stuff. You know, I listened to a podcast recently, and it was talking about a futurist economist talking about how Americans like their stuff, and stuff is what's going to drive commodity prices, you know, buying stuff like new phones, new TVs, new software, new computers, your new cars, that stuff. So when you have stuff that's going to be needed, commodities are going to be needed. And that is one of the underlying reasons why we have seen such an increase in the overall commodities market question.

Missy Quinn:

What are the best thing to do with the plugs that you cut off with insulated wire?

Tom Buechel:

Yeah. So when you are stripping down your materials, and you're scrapping it home and you're taking all of these things you see behind me switched up. Sorry, guys, WiFi problems, we order new stuff, it's coming in the next few days. Hey, no one's perfect, right? When you have plugs that you're taking in stripping the ends off of a couple of things, you have those little brass pieces on the end, right, a little plugs that go into the sockets, we get thousands of them here rockway recycling, we don't take them apart because of the time that's involved. But let me tell you what I do suggest doing. Always cut the ends off of your different wires. Why? It's going to give you the ability to tell your scrapyard Hey, there's no ends on here, right? So when they go to inspect it, they see no big power boxes, they see no ends. And by seeing none of those on there, they're going to know that not only are you telling the truth, but your materials cleaner. Now all those ends could be you know, two or three different things that you could do with them. Number one, they could become CBM which is copper bearing material. Yes, their brass for brass has 60-80% copper in it, which means that that's going to be copper bearing material. You're going to get a low price, $0.05-0.10 cents per pound. Second thing you can do some guys thrown with their steel nowadays. I'm not saying that's right, but I am telling you what we read about and hear about something I suggest third thing that you do you save them fill up a five gallon bucket of them. It might take you a month, a week a year. Who cares? five gallon buckets With all of those little ends inside, you're gonna have a 1000 ends in there. So when it's a really snowy January day, or it's really wet rainy day in Phoenix or somewhere that it's warm and you're not going to have real downtime, you can sit with that bucket with your pliers, we always suggest using a vise grip, which is one of the most useful tools and we actually talked about it in a recent blog that we did, using your vise grips, or using a tool on your workbench to be able to kind of just tighten them in then taking those pliers or another set of vise grips and breaking those brass ends off. Yes, it might seem monotonous and tedious. But when you have a bucketful to do, you tend to really get into a groove and do things much faster. And I'll give you an example of what we do at Rockaway recycling. When we're stripping wire cutting brass sorting copper, or anything of the like, well we try to do is save enough of that material. So it's not 50 pounds, 100 pounds, but it's 500 or 1000 pounds. So once our team members starts to cut something, whether it's ACR is in putting the ends off, whether it's dirty brass to make it clean, whether it's wire to strip, once we start doing something not only do we get the tools adjusted correctly, you know, your vise grips, your bench vices, things like that. But we also get into a groove. I mean, we've all been there before, when you're going on a five hour drive, what's easier the first hour or the middle hour? Well, the middle hour generally is you've gotten into a groove, you're on the highway at that point you're flowing down the road. So it's the same thing when it comes to scrapping. You get into different groups, you find things that work better than other things, you might try a couple of different pairs of wrenches, or vise grips, or any other type of tool. And sometimes you might have a problem with that tool, you might have a small issue. And by learning about those problems and issues earlier in the taking apart process, you get yourself into a really nice rhythm, a really nice groove, and you're able to strip those things down, make more money. One thing that we recommend, buy yourself a scale, weigh the product before and after. weigh all those brass ends, see what they weigh. But make sure you're timing yourself. How long did it take you to strip those things and make them clean? Because you might be surprised it might be a pound, it might be 10 pounds? It's 10 pounds at $1.50 a pound. That's $15. How long did it take you? An hour, a day, a week? Whatever it is, bake your time into the return on your investment. And by learning about an ROI return on investment, you're going to be able to know what is but more importantly, what is not worth your time when it comes to scrapping. Now with copper prices steady over the last week, we've seen some really nice pushes. While the markets were slightly down yesterday morning, we saw about a seven cent pre market drop, we saw them actually even themselves out and then go positive for the day yesterday. Today we see the market up slightly. But one thing that we have heard is multiple overseas markets such as Malaysia, China, and then also slipping my mind right now it'll come back to me I read about it. There are three different markets where they're always buying copper and brass but their spreads, meaning what they're going to pay under the copper trading has widened. And I'll give you an example, as a scrap yard, let's say that they want to normally make 10 cents per pound on material. And they normally are able to sell their material for whatever it is the equation. Right now the people that are buying material have made that $0.10 cents much wider $0.15. $0.17 cents a pound, because number one, much higher prices. Number two, much higher risk. Number three, the market has been had has had a massive influx of materials last six months, because not only have people remained busy, people that have seen copper skyrocket and held a lot of the in physical form on the sidelines have started to push that material into the markets. And what what we've seen is a lot of people coming out of the Woodworks selling scrap not only domestically here in the United States, but also shipping it overseas. And when you have a lot of material flowing and prices have really stabilized over that $4 per pound trading level. What we have seen is problems starting to arise where countries are like listen, I won't buy copper from you. We will but instead of making seven cents a pound, we're gonna make it $0.15 cents a pound and you don't have to like it, but it is what's going to make us comfortable and that's what we say about scrapping Guards, sometimes their spreads change. And because their spreads change, their prices change, and you have to not only adapt, but react properly and that's why we have these weekly reports Guys, guys and girls. We have weekly reports talking about these scrap markets because who the hell else is going to tell you? You can read about everything in this the different groups our scrap metal recycling group are different podcasts or different blogs, but we listen to youtube facebook, twitter, instagram, scrapyard owners scrap your traders scrap yard movers truckers, overseas buyers, we try to take all of these different things week over week and sandwich it in to this Live podcast so you know what's going on. And you can ask us any of your commodity based questions. We have any other questions we want to talk about from last week before I go on? Does aluminum cat versus equal beverage can awesomely Yeah, cat food inserting cancer to cat food in sardine cans is not only stinky, but I got to tell you scrap yards don't like them that much. UBCs are universal beverage cans are very popular item. And we've talked about these before. I actually believe that I saw a picture posted on our Facebook group the other day with the gentleman that had a trailer full of black bags that he had two large super sacks filled with cans. And there was a really nice hole that he was bringing in, I think for his neighbor and for himself. And you'll be sees our beverage cans and scrap yard like to have them clean, generally rule of thumb is not to crush them to leave them whole. Because when a scrap yard puts a bag of cans onto the scale and they're full, they normally know that it weighs 15 to 20 pounds. So once you give them something that weighs 40, 50 pounds that are crushed, yes, they might not say anything, but sometimes when they catch you, you know, some people have packed sand or dirt. It's just nice to have things cleaner. And while it takes up more space, one piece of advice that we can give you half your scrap your how they like to buy them, if you're allowed to crush them, so you can save space. And if you've established a good enough rapport with them over the years, you may want to point that out, you know here Rockaway recycling, we have a couple of gentlemen that bring us copper green copper, where they work, how they're pulling it out, it's always green, right? So it never goes as bare brightly for a little while we bought it as a number two, as we didn't know where we were going to sell it. As we established and solidified our market a little more, we started to buy the material as the number one tubing which gave them the ability to know what they were getting. But it took a little period of time for us to get comfortable with them and for them to get comfortable with us. For us to be able to really make that into a hardened thing. Now scrappers yourself included you should ask your scrap yard what type of movement what type of flexibility they have when it comes to different pricing and different levels of preparedness to help you learn not only how to prepare, but also how to make more money with your scrap. Now scrappers listen from week to week, you're gonna have changes all over the place. But don't forget, not only do we have our podcasts coming out which you can subscribe through Spotify or Apple podcasts, when you also tune into these reports, read our different reports and watch our hundreds of movies and YouTube clips that we've made about different types of materials. Now we're working really hard to have not only the new app, but a new website out this summer. We delayed it slightly because we want both of them to be released at the same time. So you get the best user experience but just know that in the backgrounds. It's frickin awesome, we're super pumped about it, we wouldn't have been able to build it without your help telling us what you don't like about what we're already doing. So your advice has given us the ability to continue to help you make more money with your scrap now scrappers as we close the second quarter of 2021 we'd like to wish America a very Happy Birthday looking bright and Spry as ever here we are celebrating 245 years of existence. And that's a really crazy and fantastic thing. Don't forget if you're looking for free tools become a Patreon supporter today, we will be handing out the wall tools throughout the month of July and August so you can get some good gear by becoming a Patreon supporter. Like always, please ask your questions. Tune in next week's episode 1pm Eastern Wednesday. Any other questions between now and then just ask us and we'll get to those answers scrappers stay healthy. Have a couple cold ones this weekend for the Fourth of July. Happy Birthday America and until next week. I'll scrap you later.