Recycled 360: Metals - August '24

It's no secret where I have met most people in the recycling industry. In fact, we started a whole business ( Recycled Media ) to teach people the value proposition of social media, specifically this platform LinkedIn, and how to not just build a network but build your business…?

That being said, I first connected with Brandi Harleaux on LinkedIn, and then I was seated across the table from her for lunch in Houston, TX at the Fast Markets Scrap and Steel Conference. There is something about people with that positive energy and willingness to engage in conversation right out the gate that I really appreciate, maybe its because I think life is too damn short to hang out with downer people, haha… needless to say, Brandi and I hit it off discussing our family business backgrounds and our entrepreneurial thoughts.?

After hearing a little bit of her story in Houston, I wanted to get the full story of her family business journey but more importantly, just spend some time talking to someone who seems to have found her calling in life…and by calling I don’t mean the recycling business, I am more referring to her ability to help and encourage others and more importantly her willingness to give back and bring others up with her. It's not easy working with your family, but it can be rewarding beyond belief if you can navigate it correctly, so please go check out this podcast and enjoy!

I trust this update finds you well and thriving. ?? In this month’s edition, we delve into the dynamic trends shaping the steel and scrap metal industry. Brace yourself for a thrilling ride through market fluctuations, where each dip and surge reveals a compelling narrative of opportunity.

?? Month-to-Month Analysis ??

?? Bull Case ??

• ?? Pig Iron: Currently at $468.75 / MT and holding steady.
• ?? Steel Imports: Total and finished steel imports were down 24.5% in June vs. May.
• ??Hot Roll Coil Steel: Increased from $670/MT to $700 / ton. (an increase of 4.4%).
• ??CME Busheling August: Increased from $380/GT to $420/ ton. (an increase of 10.5%).

?? Bear Case ??

• ? HRC Lead Times: Stagnant at 4ish weeks with crude steel production remaining flat.
• ?? Greed and Fear Index: Slipped from 54 to 33 in the past week.
• China Shanghai Steel Rebar Prices: A decline from 3,336 to 3305 CNY (a decrease of 9.9%)
• Copper Prices: A decline from $4.42 to $4.09 (a decrease of 7.5%).
• Nickel Prices: A decline from $17,156 to $16,433 (a decrease of 12.8%).

?? Noteworthy Observations ??

• Lackluster Demand ?? Recent manufacturing numbers and Amazon’s reports indicate that consumers are buying less and opting for cheaper products. ?? The slowdowns in industrial accounts that many have been mentioning are finally becoming evident in the market. ?? Furthermore, China selling billets to Turkey at a $100 premium to HMS today underscores the sluggishness of the Asian markets. While it’s tempting to get excited about HRC prices ticking up throughout July, ?? the stagnant lead times reveal the true state of our current market situation. ? One thing is certain: busheling and shredded scrap prices won’t remain stable for long and with the CME Busheling market popping let's hope for better days ahead.

At the time of writing, it is 92 days until the US Presidential Election, the Dow, S&P, and Nasdaq each tumbled roughly 3 percent in three days. Recession fears are mounting with lower-than-expected jobs added and unemployment rising, the 10-year Treasury yield hits 3.716%, construction of new homes and existing home sales both declined, investors are selling off oil, crypto and tech stocks - the “Magnificent Seven” large cap tech stocks lost nearly $1 trillion in market capitalization; Warren Buffet’s Berkshire sold roughly half of its stake in Apple; Bitcoin lost $500 billion in market cap. The very next day, the market could recover nicely. The word of the day and maybe the word for the next few years is volatility.

As investors sell off riskier stocks, typically gold and other precious metals become haven investments. On Friday, August 2, gold reached an all-time high amidst hopes of a Fed rate cut and disappointing US job data, then gave up 2 percent on Monday, July 5, triggered by panic and sell off in the Japanese market. Platinum dropped 4.1 percent and palladium decreased by 4.5 percent to its lowest level since August 2018.

What does all this mean for the Platinum Group Metals (PGMs) and PGM recycling, the lion’s share of which comes from scrap catalytic converters? Read More

We are on the back nine of summer with county fairs in full swing and football starting to ramp up. ? In no time at all, we will be in Chicago at the ReMA Roundtables discussing business opportunities for 2025 and beyond.? ? With what has transpired in the scrap world over the past 12 months, I have a feeling the tone and discussions of the upcoming conference will be different than in years past.?

Over the past few months I’ve highlighted how tight the aluminum scrap market has been as well as the driving forces behind the change.? ? Demand for domestically produced, low carbon metal is only going to intensify over the coming years as new players/plants enter into the US marketplace (Spectro, Aluminum Dynamics, Novelis, and Hydro just to name a few).? As if that weren’t enough, the rest of the world is increasing aluminum scrap recycling capacity as well, with China being a major player. ? Over the next couple years, China is single-handedly putting in 2.3X more scrap based capacity expansions than the rest of the entire WORLD combined.? ? And in preparation for feeding these facilities, China’s ministry of ecology and environment began relaxing scrap restrictions in July for aluminum products which have been in place since their green fence initiative.? ? To put the size and scope of these new recycling assets into perspective, come 2027 if all the announced projects come to fruition, China will be looking to import an additional ~20 billion pounds of aluminum scrap annually. ? That equates to more than 1,200 containers of scrap daily at the same time that every other region of the world is increasing their demand for aluminum scrap… Read More.