RZR Recycling Blog Rantings, Ravings, and other Ruminations on the world of Scrap Metals.

some info on Copper

took this blurb from Ivan Martchev in an article on Seeking Alpha (www.seekingalpha.com), a great resource for financial information.. Take it with a grain of salt as many other articles I have read have the opposite conclusion. Original article can be found here: http://seekingalpha.com/article/4035510-another-vinny-gambini-moment-hibor-market?app=1&auth_param=1doc9u:1c79ll1:d2058642d71cedd2032dd91f58adc671&uprof=45&dr=1

Mind Dr. Copper

The surprising Republican victory created a "Trumpnado" in more than one market, from bonds to stocks to currencies to commodities. But one market where the Trumpnado is just a short squeeze is in copper.

 

The reason is that the Trumpnado was supposed to be driven by expected Trump policies that would affect the demand for commodities, driving up demand for capital and maybe creating higher inflation. I have not heard a thing along these lines coming out of the upcoming Trump administration, or the President-elect's infamous Twitter account, that is anything but bearish for copper, which is why I think the short squeeze in copper may fizzle out and we will make new lows in the commodity market.

 

The reason is, you guessed it, China. As the #1 consumer of copper, China is mired in a deflating credit bubble exacerbated by a verbal war with the President-elect over a possible trade war. If there is no trade war with China, which I hope will be the case, I think the price of copper will decline based just on the deflating credit bubble in the Chinese economy. If there is a trade war, the price of copper will decline faster.

Disclosure: *Navellier may hold securities in one or more investment strategies offered to its clients.

Disclaimer: Please click here for important disclosures located in the "About" section of the Navellier & Associates profile that accompany this article.

Why things are priced the way they are- Angry customers and their pre-conceived notions

So I just had a guy with 5 pounds of cast aluminum and a small electric motor complaining how little he got. When I inquired why he was upset, he said he thought Aluminum would be a dollar something a pound, based on can pricing he has seen. His expectations were high and he was let down by the actual value. Another customer was upset when I couldn't pay a price he had received on his material the last time he scrapped, about two years ago! He decided to hold on to that material and shop around until he got the price he wanted, which was about .20 more than the best current pricing available. And that price is for top sellers like myself and other scrap yards, not the general public.

So let's talk about reality vs. assumptions. Assumption is that scrap pricing remains constant and always high. Assumption also means that one aluminum is the same as another and both prices should be similar. Reality is the markets are constantly changing and pricing clearly reflects the current conditions. Reality is the fact that some grades of the same base metal are wildly different in price, depending on many factors. The first customer example above thought all aluminums would be the same because he had seen the can pricing from yards that take the cans to CA for the CRV prices. When I tried to explain why an inferior aluminum was artificially inflated he simply got mad at me.Unfortunately there isn't much I can do to change his mind as he has no factual basis for his assumption, just his pre-conceived notion that he should have received more money. To him, I am a typical cheating scrap yard who only cares about massive profit ( I do care about profit of course, just not massive) and he will most likely never come back to my yard.  He didn't have the knowledge to make an informed sale and refused to listen to my explanation. 

In the second example customer we see someone who knows what he has but has not kept up with market conditions. Again, this puts me at a disadvantage as I will most likely not be in line to purchase his material a second time. He will take his load to another yard, where they will tell him the same thing I did, but now since he has verification that I was indeed correct, he will sell to that yard because he is already there. It is not that my price was low, or that I was not willing to negotiate, but that he was not equipped with current knowledge of pricing before he reached out to me. 

It's a shame really, but an unavoidable consequence of my industry. Not many people keep us with scrap markets and instead rely on anecdotal information to form their opinions on what they should be paid. By utilizing this blog and various social media sites, I try my best to educate the masses about the current markets but it's only good if people take the time to research.

Anyway, I needed to get that out, I truly hate disappointing my customers. It always leaves a bad taste in my mouth, even when I know i did it right. 

On a side note, copper still doing ok with .2 to .05 fluctuations in the market daily. But it is still up 15% from last month so that's some good news!

Thanks for reading,

Will

RZR Recycling

will@rzrmechanical.com

 

Home Matters- Tips for everyday recycling

Now that the weather is finally cooling off, you may be looking around your house and deciding it's time to purge your house of things you don't need or want anymore. Before you throw things away or put them in the recycle bin allow me to give a quick lesson in how to make money in recycling with items from your home or office. 

The most obvious items you may have are aluminum cans and plastic bottles. You can bag these items up separately and take to your local yard for some quick cash. It takes about 28 cans to make a pound so for space saving crush the cans first. Plastic bottles are a little more effort since they don't compact nearly as well, but nonetheless they have value. Next, let's talk about some of the other items around your house that are potentially worth some cash. Do you have old extension cords lying around? Maybe some old aluminum pots and pans, or cast iron cookware? How about an old car battery? Christmas lights that are so tangled up they can no longer be used? Old computers and laptops? Surprise, all have a value at your local recycling facility! 

Going to  a scrap yard can be a bit daunting. You are not a scrap expert and may not know exactly what you have. If you bring your items to a reputable yard, they should be able to educate you on what you have and explain the reason for your pricing. Don't be afraid to ask questions and learn as much as you can about what is worth money and what isn't. You should walk out with  a better understanding of recyclables and how they can help generate a little extra income for you, not to mention helping the environment and keeping usable items out of the landfills!

Lastly, let's talk about the actual selling process. Your items will be sorted into their metal types, then graded and weighed for payment. A good facility will have the weight indicators in the open and available for you to see. You should receive an itemized receipt with your weights and per pound price so there is no confusion as to your material. You will need an ID to sell most items and there is a limit of 300.00 per transaction per day for individuals. 

At the end of the day just remember, it always pays to recycle! Do your part to help our planet and make a little money doing it. It's a win/win for everybody!

Will Ribadeneira 

RZR Recycling

623-869-0021

will@rzrmechanical.com

www.rzrrecycling.com

 

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