Originally Posted by
Victor
All this talk of hoarding, stockpiling, whatever........
What if the market stays down longer than you can stay solvent while your "hoarding" your stash? Your burning through working capitol and living expenses while you hope and dream for higher prices. Great way to go bankrupt. That business plan is futile. You might want to work on adjusting your business model to cope with this instead.
Do yourself a favor and look at the historical copper chart for the last 30 years. There was a 15 year stretch where spot never broke over $1.50 per pound.
In this debate you are quoted because you responded right after my post.
My business works with farmers on a percentage bases. I have to be honest with them about
scrap metal value at any given moment. Farmers want the most for their scrap because it is valuable for repair projects. Therefore the only way to get them to sell their scrap is with a promise it will be prepared and left on the ground for better prices.
These same farmers want their shelter belts cleaned up, providing diversification for this business model.
The basics of this equation are pretty simple. It costs $ 30.00 in diesel fuel, another $ 20.00 on wear and tear on the vehicle, $ 50.00 on equipment costs (skid steer and trailer), plus two days worth of work for 4 tons of metal at $ 80.00 per ton. So $ 320.00 profit with the owner getting $ 107. Therefore net profit equals $ 214 with $ 100 in expenses provides me with $ 114.00 profit for a two days worth of work. Subtract 33% (37.62) for taxes and social security equals $ 76.38. Divided by sixteen hours (most days are 10 hours) equals $ 4.78 per hour. I think my time is worth more than that.
So the choice is to build more trailers, repair the ones used in the operation, service the many vehicles, prepare a shed full of non ferrous, ice fish for walleyes, remodel a home, make things from scrap (gifts from scrap will be updated in the near future), hunt for varmints, clean shelter belts and barns for cash or haul scrap that is stored on many farms that has been there for centuries. It is worth the gamble, but I understand not everyone is in my situation. By the way I can wait for the rest of my life for prices to rebound because I do it for the love of independence, not for financial security. Sorry this has to end quickly, but the dogs have a raccoon treed and I have to take care of business.
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