In my 30 years in the metals and recycling industry I have never seen a market reversal as severe as the one we are in. The market for scrap products makes the stock market look like a haven of stability.
Recycling programs are threatened as now you must often PAY to drop off your recyclables instead of getting paid. While it is still cheaper than land filling it removes a major incentive to recycle and the flow of incoming material. Our company has gone from hundreds of people per day bringing in material to lass than two dozen.
Metal theft will drop substantially as the market for the stolen merchandise has all but disappeared.
In less than 90 days we have seen metal prices and other products like paper and plastics go from record highs to record lows. It is amazing.
A few months ago industry conversation contended that the China miracle would provide a floor for commodity products for years to come. It started to sound like the permanently high plateau for stocks forecasted by academics in 1928. The more I heard this line the closer I felt we were to the top.
But the depth of this collapse surprised me as well.
As it turned out the world wide economic retraction has reduced the demand for Chinese exports and thus their demand for the commodities to produce them. China may be the biggest loser in this retraction.
When you eat like an elephant, you s**t like an elephant.