Scrap You Later

Well, Copper Prices Just Got Complicated - 7/21/21

July 21, 2021 iScrap App Episode 51
Scrap You Later
Well, Copper Prices Just Got Complicated - 7/21/21
Chapters
Scrap You Later
Well, Copper Prices Just Got Complicated - 7/21/21
Jul 21, 2021 Episode 51
iScrap App

Copper prices saw a HUGE drop this week, but how does that further complicate a very complex market? We have more news this week.

📲Download The App

✌️
Become A Patron

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

Show Notes Transcript

Copper prices saw a HUGE drop this week, but how does that further complicate a very complex market? We have more news this week.

📲Download The App

✌️
Become A Patron

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

Tom Buechel:

Hey scrappers, it's Tom from the iScrap App and today is Wednesday, which means it's time for our weekly report on YouTube and on Facebook. What are we going to talk about today? market news market updates what you should expect expect to your scrap yard and how you can make more money with your scrap follow me Let's go talk scrap. have questions about scrap time to ask them now. Let's go. Hi, scrappers Tom from the iScrap App. And today is Wednesday, July 21 2021. We hope that you are super excited to hear about scrap to hear about the market and really to get a good grasp on different economic situations that affect the scrap metal market. Now, first and foremost, thank you for joining. We like to go live every Wednesday at 1pm. So if you have a question for us, by all means, post it whether you're on Instagram, Facebook or YouTube, we want to be able to answer your questions and help you make more money with your scrap. So if you're looking for more information, let's jump right into it. And let's talk about the scrap market over the last week. It's been a very strange week. And I'll tell you why not many times can you say well, we saw the biggest drop in the stock market in eight months this week. And then the next two days erased the entire decline. And that's what happened Monday, Tuesday and Wednesday. At one point on Monday we saw the stock market dropping over 1000 points. We saw copper prices down $0.15 cents a pound. We saw a massive piece of news coming out of the Middle East with the OPEC plus Russia included in there talking about pumping more oil out and that information came out on Sunday. And when that information came out, coupled with the Corona virus Delta variant that's going on right now, what we started to see was a big problem because the markets got spooked. People were no longer talking about vaccines. And on Monday, we saw the stock market dropped over 1000 points, amid renewed concerns about lock downs and shutdowns. That's what really spooked the market. And of course, that carried over into the copper side of things. The steel side of things as oil and gas prices affect so many different metals, so many different markets and so many different workflows. You know, we talked about supply chain in the past and while you're out there scrapping you are part of the supply chain that's fueling the entire metal system, you're taking metal, bring it into a scrap yard, who brings it to a larger scrap yard, a mill a smelting mill, an operation that's shredding material export in material that goes to a factory which melts it down, repurpose it into new cast iron radiators, barstock IBM's, flat rolled cold rolled steel, then it goes in becomes a car, which 10 to 12 years from now, you will go in cash. And of course you'll sell that cat to our cats calm. But when you look at the supply chain in a macro point of view, right when you take an economic point of view from and you say okay, how are all these things interconnected. Now, I was talking to my brother in law the other day just about oil prices. And when the different OPEC countries announced that they were going to start producing so much more oil, what happened was a domino effect through the industry. You know, oil prices went below $70 a barrel, we should be expecting to see lower gas prices going into the fall. But it's going to take a little while because as that first domino block happens, we're already down the road. So we pay attention to these things and how they affect the scrap metal prices and the industry. So when we saw the big declines coming on Monday, well, that quickly guy raised as earnings started to happen. And because the second quarter of earnings were so strong from so many companies, when you compare second quarter of 2020, right, which was when the whole lockdown, stuff went on, people got laid off, PPP was happening, that was the second quarter versus the second quarter of 2021, massively different results, those big result changes is what really is starting to spur some of the economic activity. What we're looking for now is where those metal prices are going to move going into the third quarter and into the fourth quarter. Now with copper prices really staying stable. We did get a little miffed out because the Chinese announced that they were going to put more material into the worldwide economy. They were going to take more of their copper from the side and bring it into the markets and they were expecting to lower the prices. Well, the opposite happened. Maybe the price moving on the opposite but a different reaction happened where the markets really were unchanged. They said oh Okay, you're adding more copper. That's good, but we need it. So we're not going to downgrade the price of copper because well, we need more of it. So what we've seen right now is a stabilization of the copper and aluminum prices and many other non ferrous prices leading into the end of the summer, you know, we're halfway through July, and with six weeks left, we normally see slower and not many traders are on vacation, people are taking time off a lot of Mills, melting plants, manufacturing facilities. Normally in real life, you know, outside of this post COVID world, we've all been shooting equipment down servicing things and getting ready for the third in the fourth quarters really ramping into the holidays. But what we've seen now is so many companies were able to rehab refinish and redo their machines in 2020, the second half of 2020, the first half of 2021, the manufacturing processes, it hasn't really been shut down. You know, I deal with a company that does battery recycling every summer for the last few years. They shut their plant down for multiple weeks. So they can service their equipment they haven't searched headed down the summer because they were servicing it for a long period of time when not a lot of material was coming in. So there's been all of these different things that have been happening. And when we look at things like batteries, lead, aluminum, copper, and all other metals, they all have these different impacts that come from outside influences. And what we're trying to do is piece them all together. Question.

Missy Quinn:

Do you see aluminum staying the course or could we see all time highs?

Tom Buechel:

I think we're gonna see all time highs on aluminum aluminum has been the belle of the ball when it comes to 2021 in my opinion, you know, while the prices of aluminum are always going to be much cheaper than copper and brass would be. We're seeing prices reported that are really crazy. You know from a scrap yard side of you. It's weird to be paying more than $0.30 or $0.40 cents for a product that we've been paying that for so many years. But here we are seeing aluminum sheet aluminum siding prices in the $0.45-0.65 cent range, no higher grades of aluminum that you can learn about through the iScrap App.com you can find 6063 pricing at $0.90 cents a pound in some places. And because the aluminum prices are strong, there's other byproducts in other industries and other materials that you're getting stronger prices for example, aluminum copper radiators, it is the middle of the summer, right? I actually had my air conditioner service yesterday so wouldn't break down and one of you wouldn't be looking for the broken one on the side of the road. When I talked to the contractors, they told me that they are so busy right now, and so many units are getting broken that they don't even have time to process them. But when they do have time to process them when you have those clean acrs aluminum copper radiator, aluminum's up copper's up, you marry the two together, they make a really nice baby that's worth a hell of a lot more money than it was a few months ago. Another question.

Missy Quinn:

Heated sinks are zinc and aluminum. So what category of aluminum should they be sorted into and what would be the price for heatsink?

Tom Buechel:

So generally heat sinks that are coming off of laptops or computer towers or servers will be dirty for one reason, the glue that's put on them that either holds the heatsink to the CPU, or sometimes the circuit board generally will downgrade it to a sheet aluminum. If you're only dealing with a few different laptops or computer towers, we suggest not trying to get some type of special price, but throw it into your sheet aluminum mix because the juice is not going to be worth the squeeze in this case, unless you're dealing with hundreds if not thousands of pounds of heatsinks. Just leave it like a sheet aluminum and beyond with your day. Any other questions? While we're doing these live updates, please let us know. We're going to be doing a couple of new things today. But before we do the new things, one thing we want to remind you of we have tools from DeWalt that we're giving away from people that join our Patreon group in July and in August, with different tiers of levels by becoming a Patreon member, you're going to be able to give yourself the opportunity to learn more about the markets. Learn more about the scrap prices. And if you join our upper tiers, you'll be entered for a new brand new in the box reciprocating saw, along with some saws, would be some blades that go with it that will help you make more money with your scrap so please become a Patreon supporter of ours today, which enables us to do more videos like this more third party content that we push out there and we're really excited to do all those videos. Any questions right now?

Missy Quinn:

Let's do one more. My scrap yard is giving $0.30 cents a pound for aluminum cans. Is that good or bad?

Tom Buechel:

Aluminum can price at $0.30 cents is what I would call P.U. stinky. You're about half of where the national averages which isn't that $0.52-0.53 cent range. So $0.30 cents a pound is a great deal for the scrap yard and a really bad deal for you. We suggest using the iScrap App to find a couple of yards in your area. If you look behind me, we have our image of our newest iScrap App 2.0, which is going to be released in like two weeks. So when the new app comes out, what is it going to do? It's going to give you more prices, more price history, the ability to post your prices more. And what we've done is learned what you want us to talk about what you want, what tools you want inside of an app for the metal industry, and we built it specifically for you the scrapper. So we're really excited. Another question.

Missy Quinn:

We have a question from Instagram, is copper going back up?

Tom Buechel:

Yeah, I don't know if copper is going to go back up right now, I wouldn't predict that through the summer copper prices are going to go up, I believe that we're going to kind of see copper staying where it is for the balance of the summer. And a couple of reasons that I say that we've now had two injections of copper from the Chinese government. So back in May, when it happened, we saw that deep decline of $0.50 cents in one week. Now, it happened again this week. And we haven't seen any decline other than the stock market drop that happened on Monday. But we did see those prices recover yesterday. And today, maybe we're down three cents for the week. But with the oil news coming out that the oil and gas prices are going to be a little cheaper with some of the other new cycles that are coming out. Economic wise, I don't think that for the balance of the summer going into September, we're going to see much movement on copper. Thank you very much for the question. We appreciate it. Now with these markets, we know that you have questions, and we're looking to answer them. So make sure you're asking those questions during our live feed. So we can help you learn about the scrap industry from not only a scrappers point of view, because I also scrap when I'm out there walking the dog walking with my kids going to job sites, I'm looking for scrap all the time. And I have a really unique perspective because I also own a scrap yard. And being part of the iScrap App has given me the opportunity to really connect with users and viewers of the iScrap App. And then when I can compare that to scrapyard customers that we have here Rockway Recycling, it just gives us unique perspective. And we love to share that perspective to give you more transparency into the markets. Now this week, are we ready to do our where we are. Alright, so this week, we're going to we're going to start doing this I do not know what's inside this bucket. So we have our our bucket of the week right we have our iScrap branded bucket, we didn't pay five bucks for this not one of those orange guys. This came in scrapping the customer left. So I don't know what's in here I'm gonna reach inside could be little could be big. We're just going to talk about it for a couple of minutes. If there are suggestions that you would like us to talk about in the future, let anyone know here I scrapped by sending us a message through any of our social media programs. Alright, so I'm touching it. And it is a back up battery charging unit. Look at this battery charger. This is a this is an old school one, you can tell by some of the dials that are on it. So immediate reactions. Customer cut the wire cord off, that's really great, you're going to make more money that way. Now when I feel this unit I look inside, I can actually see that there's a copper transformer inside. Now one thing I don't like about a unit like this, I like the newer ones that have backup batteries built into them. And that's probably why a customer scrapped this. Because those backup batteries when they're built in, it's a real easy win, we always talk about little wins. Here I scrap and trying to figure out how you can make more money. The newer ones have a compartment on the bottom, where you can slide your off, pull that battery out, and some of the newer ones that you use to charge your cars also have USB ports on them. So there will be circuit boards inside. So you don't like this without knowing it, you could easily feel that it's about about three pounds, there's probably a one or two pound transformer inside. And we've shown you videos before on how to take Transformers apart. So taking a unit like this apart is gonna make you more money for a couple of reasons. Three or four pounds with plastic on the outside, you're gonna end up you know, throwing it into a CBM pile which stands for copper bearing material and maybe get $0.05-0.10 a pound. But by spending a few minutes taking this piece apart, the transformer inside is probably two to three pounds, probably worth $1. If you cut it apart, it might be $2 just from the copper value. But on the bottom of this you're also going to have a low grade board. And from what I can see through some of these slots, there's another piece of aluminum inside that you can scrap and some smaller pieces of wire and a couple of brass connectors. And I know that a lot of us scrappers when I look at some of your posts online. You always talk about winter work You talk about different things that you take apart when you have nothing else to do these low grade units that you might only sell for $0.15-0.50 cents of total, not even per pound, but total. Sometimes, these are really good things for you to be able to put off to the side. And we call it winter work. And if we haven't written blogs about winter work, we'll write a couple of pieces of advice that we have for things that are not worth taking apart when you're busy. But when it's raining, when it's snowing out, we'll give you some ideas on things that you can put aside to make more money. And then we'll show you how to take those things apart. So you learn more about them. Do we have any more questions?

Missy Quinn:

You want to go into steel.

Tom Buechel:

Yeah, I'd love to talk about steel prices. Let's ask a question and we'll lead it in.

Missy Quinn:

Are steel wheels with the tires on them acc

Tom Buechel:

Oh boy steel wheels with the tires on them are pted at scrap yards? really tough call because I know in my scrap yard, we dislike rubber tires, because we're not really recycling cars here. And our outlet is a little more expensive than other people. We suggest that you talk to your local scrapyard, because a lot of yards will take aluminum or steel wheels with the tire on it. But they're either going to charge you a tire disposal fee or take the unit for nothing. Where by finding a used tire machine that you can pop the tire off or working with your local auto mechanic where you might be able to work a deal out with him, where you move his steel you move his old rotors, you sell his cats to RRCats.com and you're able to work with them separating those two things is going to help you make more money. Now while we're on the steel topic right now, we saw this oil prices go down which we've now talked about a couple of times. And with the oil prices going down, we do expect to see a weakening steel market going into August last three weeks, we've seen at least two price decreases a total of $20 per ton on average across the board for most materials. Now certain areas of the country have not seen a price decrease, but you should expect when especially going into August. Now we do have a very strong demand right now. And that's going to help keep a lot of the steel prices propped up which is going to be a really good piece of news going into the fall. When schools back in session people are going back into the office from away from that work from home stuff. And it's just going to be a different market going into the third, the end of the third and the fourth quarter. So hopefully steel prices remain now scrappers, we know there are all types of things that we can talk about week to week, we try to touch on a couple of things every week. And if there's more that you want us to talk about, let us know. We try to help about basic non ferrous items, we try to talk about macro events like oil prices, and larger things that are going on outside of political prowess. We also like to talk about the steel markets. Now last thing we're going to talk about today is catalytic converters. Now of course, RRCats.com is quoting thousands of people there for their catalytic converters, and one of the things that we've been most proud of is how long we hold the price quotes for we had a customer earlier today say Hey, your competitors offering $20 more, but we have to get the cat there within one day. Where are our cats calm we give you seven business days from the second you receive the quote, to shipping that cat out with most likely a free shipping label and getting paid really quickly. Now RRCats.com offers thing offers things like photo grading where we can give you a quote for your cat just based on the picture. But serial numbers are always better. Now when you're looking to learn more about catalytic converters, if you're going to icecap app, we have three different categories rhodium, palladium and platinum where you can learn about those metal prices. We also have about 10 different mixed material items from the catalytic converter world. It gives you a basic idea on grades. And the best way to get prices since serial numbers take really great pictures, sign up for the newsletter through our cats calm because the catalytic converter market really changes so quickly. A month ago, rhodium was at $28,000 an ounce and today it's less than $18,000 an ounce. So with big market movement, you always want to be up to date and know that you can work with a buyer that's not only going to hold the prices, but more importantly, pay you quickly. Another question.

Missy Quinn:

A little bit unrelated, but can you tell the difference between red brass and semi-red brass?

Tom Buechel:

Yeah, red grass and send me red brass, you're going to want to have an analyzer. Pure red brass is going to be about a 90-92% copper rate, we're semi red is going to be in the 86-88%. And if you don't have an active XRF or you don't work with a scrapyard that has one of the analyzers you can see them they put the wrist straps on they're kind of big and bulky. If you don't have one of those you're not going to be able to know but red brass should be that 90-92% semi red is going to be a little less copper inside. But most scrap yards union group the two together either pay out a red brass or a bronze price depending on what their wording is, and hopefully that will help you out. In the coming weeks we're going to have a couple of videos talking about different alloys, how they're put together, how they're made, how you can sell them, and just giving you a difference between alloys and metals in a video form just to teach you more about the metal industry. So when you're out there scrapping, you can ask more educated questions from your scrap yard, instead of just asking questions that might not make sense or might be a little confusing. Now scrappers don't forget every Wednesday at 1pm, we'd like to go live and do our weekly report to let you know what's going on with the markets. Next week. We're not going to be doing a live report, but we are going to be doing a first half of the 2021 recap, giving you our opinions on the markets if they were positive, if they were negative, and what we think is going to happen the second half of 2021 if you have not become a Patreon supporter of ours, please make sure to go to our supporting page become one so we can produce more content. And if you're one of our upper tiers, you're going to qualify to win a free tool from DeWalt scrappers. This is Tom from the iScrap App and today is Wednesday July 21 2021. Scrap well, scrap often and until next time, I'll scrap you later.