Prices are falling fast for next months ferrous market - Page 2

Yes, PSP Price Prediction sounds good. That way its easy to subscribe to the thread and check for updates. So far you have determined my markets before I get them, and where I am small that is a huge help. When you said it was going down $50 I didn't listen and should have, it still hasn't recovered. The price goes up a little bit at a time then WHAM it drops big like 40-50.

My yard confirmation of a drop. 30$ /ton on the first. Got in a small load of 2180 pounds yesterday before the drop. It's bad enough the price was $170 ton. I don't get enough tonnage to make $140 ton worth my while.

Well time to stock pile.

FYI...everything I am hearing indicates that the ferrous market will continue trending down for the next few months. Someone even said they don't expect prices to increase until January! If that is the case we would be almost where we were in 2007. We could be headed for some lean times boys and girls.

PSP mentioned that he thinks a lot of yards speculate and hoard metal until prices rise. Although this is true for some smaller to medium sized yards, most large yards won't do this. My yard for instance ships thousands of tons every month. We have speculated in the past on some dense railroad material, but for the most part we don't have the room to just sit on a few thousand tons and hope the price goes back up. It is called speculating for a reason...because it is just a guess. So assuming a small yard hold onto half their ferrous inventory until the next month hoping prices will go up. What happens if prices drop? They either have to cut their losses and ship or hold onto their material for another month. What happens if prices drop 2,3 or even 4 months in a row? They now have a yard full of material that is worth half of what it was a few months before. This goes for small time scrappers also. Do y'all have enough space to save ferrous material for a month or two in hopes it will go up? My guess is no. Just my two cents on holding material (specifically iron, copper is it's own beast) and speculating on prices.

My " breakdown stockpile" will get a workout this winter if prices stay down. I.burn and turn when prices are high and throw the breakdown stuff off to the side when ferrous drops. Generally when prices are $200 ton or more my time is best spent collecting and selling. My little gizmos, electronics, large transformers, TVs etc... Are stockpiled and broken down when prices are under 180$ ton my numbers don't show a hourly profit higher than my breakdown hourly projections.

.06 on steel today at my yard, yow! aluminum was also down a nickel. Told my dad I'm going to start stockpiling in his garage. he says, where you going to put it? I said on top of your boat lol.

Bohemian I wasn't saying all yards do it. You have to ship product in order to stay cash positive. You can't keep buying and buying without shipping it isn't going to work. I am just saying you might only ship 5,000 tons instead of doing 8,000. or 10,000 tons instead of 15,000. When the mills lower there buying prices allot of people big and small sit on there inventory and sell when the price goes up. What goes up must go down and what goes up must come down. Its the nature of the Beast Called Scrap. I also see prices rebounding next month. We had a positive PMI index for the first time in four months for September and hopefully it was just a summer lull for manufactures. I am hoping for another 50 plus PMI next month. While Europe is having an atrocious time with manufacturing they haven't had a positive month in forever and China having a negative PMI for the first time since 08. Things are starting to look gloomy. Except here in America were we are on the plus side. I don't know if its service centers restocking there inventory after emptying out there warehouses or if we are really experiencing a small manufacturing boom for the last few months of the year. I am hoping for a positive PMI for the rest of the year. I am also hoping for good unemployment numbers to come out in the next few days showing we added more manufacturing jobs in September and more private sector jobs then the analysts from the big banks and hedge funds predict. I would expect after little selling activity for October by the yards that next month the mills will have to raise there prices to bring out the scrap or else if they go down again no one will be selling squat because they wont have the inventory to even fill big orders with two big down months in a row. Mills will have to close down (Hot idle) in order to bring things in line with scrap being sold and melted because you can't run at 80 plus percent mill capacity when yards aren't selling enough material to be melted. Now when yards are selling more scrap then can be melted and mills are sitting on thousands and thousands of tons of scrap that would take them months to melt like in Sept, Oct, Nov. of 08 the price is going to drop like a rock but that is not the case this year. We aren't selling scrap like its going out of style and sitting on thousands and thousands of tons of unprepared and the yard is so stuffed you can barely move around in it. Its simple math in my book. Oh and another point I would like to ad is have you seen the price of scrap substitutes lately HBI and iron ore prices have also been creeping up.

as for those of us who are purely part-timers with limited space, I think many will just have to take this on the chin.

Personally I don't look for ferrous. I don't pass it by, don't get me wrong. But as you know, when you find a few large items, ferrous crowds everything out, and has to get moved. So it often becomes the main focus, whether I like it or not. Stockpiling isn't an option in suburbia!

Russell's advice is quite sound for us part-timers...skip some of the hunts, start smashing the tv yokes and inkjet printers and whatnot. Much appreciated Russell!

From a peddlers prospective...

Ive never "gone out roaming" for hours on end. Well, I shouldnt say never. I have a time or two when I needed to think. Alot of my ferrous comes from, well, right place at right time. I pick up what I see during my regular day, and keep a stockpile until its overcrowding. Then to the pile it goes. Ive cashed in at high and low times but always "made." Even if it was $10...moneys money. That $10 just paid my Snap On dealer for the week.

Plus, I tend to get loads of ewaste that piles up until I have time. After a day breaking down vcrs, printers, towers, etc, I end up with a decent amount of steel (for me)...now add that to the steel desk and AC carcassas and my truck is full.

Just looks like its time to resell as much as possible. 80% of what i pick up still works or just needs a few minor tweeks. lol does anyone need a a nice electric trimmer???

Originally Posted by PistoneScrapProcessing

Quick question to the peddlers how do you make a buck when the prices are down this much? Gas is 3.50 per gallon and at 125 a ton do you even make a buck out roaming the streets searching for scrap or does the rising price of copper and aluminum and stainless offset the price of steel?

Gnraxlrose88 summed it up nicely and accurately. Because I'm cruising neighborhoods going to and from my day job, and driving to the yard on my lunch hour, yeah I make a buck. Typical load is 300 pounds of light iron, a crate of motors, a crate of wires, a few pieces of aluminum, a lawnmower engine, and an A/C here and there. So when the iron portion goes from $19 to $15, it's not a big problem. It's more a situation where the perception of lower value makes you less likely to go through that one last neighborhood on the way home at night, and spend a little more time chipping away at the smash pile.

I would think the price of ferrous has a much greater impact on you full time guys. Even if it's just half your business, a 15% reduction in ferrous is still a huge hit. Let's hope this turns around soon!

The old addage in this industry is that the only thing that is worse then having too much scrap at a mill is running out of it. Prices this month did drop more then anyone could have predicted. Even though everyone is gloom and doom for the next few months, I believe that prices cannot continue to drop like they currently are. I would say that best case scenario for next month would be a $5-$10 increase. I think there is a good chance of a sideways market, and still a chance the market could drop another $10. Whatever the market does next month, I wouldn't hold out for a significant increase until we are deep in the winter months.

The drop couldn't of come at a better time for this part timer. 1. I've been thinking about switching to full time, this us requiring a lot of my time doing research. 2. My trailer is going to be completely overhauled wood sides to reinforced steel mesh sides.3. My break down/ resell pile is substantial enough to not worry.4. Hopefully it will chase away some competition, although I doubt it.5. I get most of my scrap through my day job or peddling to and from work. To me The drop comes at an ideal time, if there ever was one.

I have been waiting for the market to "crash" since i started

I know i will never stop scrapping, i just want everyone else to quit! hehe