Should I HOLD or SELL in Volatile Markets? – 3/9/22

Posted on by Tom Buechel

HOLD OR SELL NON-FERROUS
HOLD OR SELL FERROUS

Good Day Scrap World,

Another week of the sad news coming out of Ukraine and Russia has led to massive commodity spiking and problems worldwide. We may see an upset in the markets with prices bouncing up and down on all metals, from copper to palladium to nickel. These are the exact opposite things that we like inside the scrap pricing world because it takes a lot of the security of stable markets and throws it out the window. 

In the last five trading days, we have seen copper prices move over $1.10/lb — both up and down. Price changes of this magnitude will be reverberated and felt throughout the scrap world and eventually through retail pricing. These are problems and escalations coupled with inflation that will lead to long-term effects with the possibility of a recession looming in the not-so-distant future. 

Non-Ferrous Prices & Market Status

  • Copper – SELL

  • Aluminum – SELL

  • Brass – SELL

  • Copper Wire – HOLD 

  • Stainless Steel – SELL

Usually, we would start by talking about copper, but it was not the most interesting non-ferrous metal out there this week. The nickel market saw a halt in trading as nickel futures, which contribute to stainless steel prices, shut up to a record that the London metal exchange then paused trading on because of the instability. These prices have changed due to the volatility and the unsettling problems between Ukraine and Russia, and while they are drastic, they are not shocking to see. These prices will continue to have volatile times and will leave to large price swings from scrap yards and traders alike.
 
This has not even touched on the copper markets, where the prices have been very chaotic. Looking below at the copper tracking chart, you will see prices have a huge uptick and a rapid downturn. This has led to massive instability, which is the opposite of what we need or want. This will lead to short-term price gauging and longer-term inflationary problems. 
 

Non-Ferrous Price Chart of the Week

 

Ferrous Prices & Market Status

  • #1 Steel –SELL

  • Shreddable Steel –SELL

  • Light Iron – SELL

  • Cast Iron – SELL

  • Complete Car – SELL

With oil and gas prices hitting record highs, we are not surprised to see that the steel prices have remained higher. We expect these markets to remain stable, but we will not be surprised if we start to see significant disruptions due to further escalations in Ukraine. While Russia produces a large amount of steel, they do not have enough to affect the market as much as the gas prices will affect the market. These are the things that we are worried about moving forward and will cause significant problems when it comes to Scrap.

Ferrous Price Chart of the Week

Catalytic Converter Prices & Market Status

  • Catalytic Converters – SELL

Let’s talk about things going completely bananas, and let’s start with the Palladium markets. We touched on this briefly last week, but it has not changed over the past few days with the market’s massive up and downswings. We are watching these markets extremely closely as the volatility is something that we have not seen in many months. In the last week alone, we have seen palladium prices having massive swings and jumping over 35%. For this reason, selling any cats you have is a good idea as both Platinum and rhodium have strengthened simultaneously.

Let’s talk about things going completely bananas, and let’s start with the Palladium markets (see chart below). We touched on this briefly last week, but it has not changed over the past few days with the market’s massive up and downswings. We are watching these markets extremely closely as the volatility is something that we have not seen in many months. In the last week alone, we have seen palladium prices having massive swings and jumping over 35%. For this reason, selling any cats you have is a good idea as both Platinum and rhodium have strengthened simultaneously.

Over the next few months, we could be witnessing a shift in the market with prices staying escalated as many companies and countries are cutting ties with Russia. As Russia continues to produce 30 to 40% of the world’s palladium, we will see an increased value on the scrap catalytic converter side of things, and that should lead to increased pricing for the next few months.

current catalytic converter prices

Other Metal Markets: 

Not surprisingly, we have continued to see all metal prices and markets going crazy the last few days and weeks. This does not seem to be slowing down as the needs are trying to figure out where the bottom is and how we will get to the floor quicker than usual. Right now, we are seeing a lot of crazy problems, and these do not seem to be going away anytime soon.

Thank You.

We have a couple of videos and podcasts that feature interviews with family inside the scrap business and scrappers. If you’re looking to be featured, interviewed, or even interview any of the people at iScrap, let us know so we can get it together.

– Tom

 

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