metal prices!!!! - Page 2

Originally Posted by pjost

Yeah, keep up the good work olddude!!! Does your research indicate a bounce back anytime soon?

Indications are this is just the beginning of China's problems. many estimate 18 months. Prepare for the worst and hope for the best, and, you will never be caught off guard.

Look on the bright side , gas is $1.99 a gallon , copper is going to drop again your right about that . I find it interesting how the markets kind of dictate one another . But a drop in metal prices does affect us in this business

Originally Posted by olddude

Actually your not looking in the right place in either case. I wouldn't call a near 50% drop in e scrap price stable.

Makes sense as to why...

Olddude, am I wrong in thinking that china took advantage of the "everybodys doing it" situation and so prices will drop now and rise with greater demand? ebb and flow?

Originally Posted by AdmiralAluminum

Olddude, am I wrong in thinking that china took advantage of the "everybodys doing it" situation and so prices will drop now and rise with greater demand? ebb and flow?

When western countries plan 5 year models and it's citizens plan for this afternoon, the Asian particular the Chinese and other Asian countries are planning the next 100 years. The Chinese tried to combine socialism and at the same time take over the world manufacturing. What happened is predictable, they were so successful they also took all the manufacturing jobs and related fields. leaving a huge world middle class broke and now unable to buy what they manufacture. At the same time their once slave work force demanded and got more freedom. Communism, freedom and democracy can't work it is an oxymoron. I believe this will get much worse before it gets better.

We have a new phrase used by our government and our economists , western nations are now refered to as a consumer economy. Think about it, there can exist such a thing only until you run out of money.

This is the reason the FED money presses are running 24/7 The world puts up with this because the government , years ago guaranteed the Saudis king could stay in power as long as they demanded the FED dollar be used to buy oil.

What a coincidence that the entire middle east exploded and its rulers killed or expelled only after they allowed currency's other then the dollar to buy their oil. The only exceptions so far are Saudi Arabia, Kuwait, Quixtar, (which was chosen to be neutral ground) and a few smaller countries which , my guess are next on the list.

This is not a political statement as I am a-political. it is a statement of fact any one can research.

For the last few years I have referred to us as a "service economy" where our economy is based largely on one person providing a service for another, Those smarter then me came up with the term Consumer economy. Here again the camo net was thrown, over all. it sounds much better to be called a consumer then it is to be called a Server I.e. SERVANT.

On point olddude!
Thank you for your perspectives on metal futures, For once I sold before the drop

Olddude you have a lot of interesting things to say and I agree with many of them. Yes, you're correct that the U.S. is mostly a services based economy (where people make their money) and the spend a lot of it on consumer products ranging from immediate things to long-term items such as vehicles and houses. The services also cover a huge array of jobs and income potential, from minimum wage to the highest priced jobs in the world (see my link to the 5 sectors of modern economies).

I disagree that just because a person provides services or spends money on items we are "servants". Last time I went to the auto mechanic I felt like his "servant" dishing out money to him. Yes, the US manufacturing sector is greatly reduced and will probably never be the the economic sector where the most people make their money but there are sub-sectors of manufacturing that still do well. The US still does well in high tech and complex manufacturing. No airlines (outside of China maybe) fly Chinese passenger planes. The Japanese haven't even tried to jump into this market dominated by the US and Europeans, although the Brazilians are trying. How many Americans drive Chinese made cars (maybe some that are made under American or Japanese brand names, don't really know about that). The point is that American manufacturing is still alive but it is very different and will never be the big muscle part of the economy that it once was.

But jobs in the trades are still going generally strong, especially if a person is willing to re-locate. Hard to ship off-shore plumbers, electricians, auto mechanics, etc. because that work has to be done almost exclusively on-site in the US. Granted the trades can be greatly influenced by economic downturns, especially if involved in new construction, but if a person learns a trade that is needed and they become good at it, they can probably find employment compared to a basic assembly line manufacturing job making consumer products that can be made cheaper elsewhere. I don't want to beat on the textiles industry but if you're making shirts in the US and your competition in the same type of item is from Mongolia and Cambodia, chances are your job is in trouble for the long term. For the last couple of years, companies in South Dakota can't find enough good welders. If you're a welder and probably willing to work for less than what you would find in a big populated state but live a less hectic (and cheaper) lifestyle in a smaller city or rural town, check South Dakota out.

There's an interesting book that came out in 2014 called The Death of Money by James Rickards. His premise is not if the US dollar will lose its current position as the global reserve currency but when. The dollar won't be totally swept away but will be combined in various ratios with the Euro, Yuan, and perhaps other currencies into what are called SDRs (Special Drawing Rights) administered by the IMF. When this happens the true value (not the hyped value maintained by the Federal Reserve) of the dollar will be realized and a lot of US wealth on paper will simply vanish (make 2008-2009 look pretty tame). At least this is Rickards claim. Agree with him or not but remember that the US dollar is only backed by people's (around the world) faith in the US economy and the US government to pay its debt load. If that faith goes away or is greatly reduced, we're probably in for a hellva ride.

P.S. Rickards says that the Chinese economy is a hollow one and may not be as stable for the long term as envisioned by a lot of people.

Sectors of the Economy (Five Categories)

Jim Rickards

Fellas & Gals, I see a lot of nervous talk about prices, but it's no big deal y'all. Listen, metals are just another token in the bull market, what does a bull do? That's right, he goes up and he goes down. Your job as an entrepreneur is to balance the finances by diversifying monies coming in. In other words, you have to be the ceo and accountant and everything else at the same time. So when times like this come along, all is still good. Take for example, what we are loosing on copper, we gain on gas price, aka balance. Ya feel me. Money wise, I'm doing great and I love it. Whose with me.

No offense therecycler but I'm not feelin ya at all. Every .05 copper drops at the yard I'm losing about $200 in the value of my stash. Gas/fuel doesn't even come close to making up the difference. Hopefully I can ride out this storm without losing my a$$. I think I'm sitting ok right now, only time will tell.

Fellas, these things happens and if we are in business without the hindsight of price fluctuation, then we are just kidding ourselves. You don't have to go belly up or loose you're @ss, but what you must do is make the adjustment. The drop in gas price have given you that start, what else can you do? You may have to increase productivity, reach out a little more, or market a little more. The prices could get worse before it gets better, so what ya gonna do? I'm gonna be fine.

In New York, things may be different. But, pjost and I are both in rural areas (South Dakota and Wyoming, respectively).

For shred, I can get $0.05 per pound. To go to the yard is a 250 mile round trip. Gas may be cheap, but it's not that cheap.

I used to use a 1987 Chevrolet 1/2 ton. The last load I took crossed the scales at 6000# even. I got about $73 for it. I get about 10 MPG, so figure 25 gallons at $2.25 per gallon (price then). I spent $56.25 on fuel. Before you account for truck maintenance or worse, time, I made less than $20 for a whole day of work. That doesn't cut it.

I'm now getting a Chevrolet K3500, so I can haul more. But, scrap won't cover the cost of the truck. To cover the cost of the truck, I can haul 3.5 tons of scrap per load. That's $350 per load, and fuel is the same (About $50 now- it's cheaper!). So, that's $300 profit per load, roughly. Throwing out insurance and registration, and time, I'd need 15 loads to break even, or 105,000 pounds. That's not going to happen!

The truck will do other things to pay for itself. But, scrap won't cover it. If fuel were to go back to $4 per gallon, I'd spend $100 per load. But, if scrap were back to $180 per ton, my payout at the yard would be $630. So, I'd make over $200 more per load. And that's shred. Imagine copper prices!

Food for thought.

matador: "Numbers make me sad."

Here's an article even I can understand:

Hard times return as China bids to bring its economic miracle to an end | World news | The Guardian

Two things stood out to me.

1. "The new normal"
2. "Growth is expected to slow further over the next three years"