Falling Scrap Iron prices

[clintm]

been stockpiling scrap since last christmas. so now y'all are saying I need to be stockpiling fuel too

 

[Scrub Puller]

Yair . . .

hetkind

OPEC is no longer a unified bloc...

Maybe not but they have some of the worlds cheapest to produce oil . . . they can remain in profit when the US deep water, the US shale and the Canadian oil sands are taking a hit.

These disastrously low oil prices (in my opinion) have in part been caused by the low interest rates in the US which has lead to significant non sustainable US production.

Cheers.

 

[CM1995]

CM, I realise that, but I get a burr under my saddle when people in the US complain about their "high" gas prices when the rest of the World pays more, whatever the reason ......

The simple solution is to move to another country with lower fuel taxes, yes I'm being a smart ass and I know you can take it.

Seriously, I have to base my pricing on current fuel prices whatever they may be. If fuel goes up drastically like it did in '08 ( there was a $.50 a gallon increase overnight), my profits fly out the door.

 

[Oxbow]

I am afraid that we are in for a needed fuel tax increase. Tax by the gallon, when trucks have gone from 4 to 8 mpg in some cases, just does not keep up. Add to that the amount of weight we are now allowed to haul, and the advent of the electric car, and I believe that we will have to go to a mileage taxi either instead of or in addition to the per gallon tax. Or, perhaps there will be toll roads everywhere. We are fortunate in the West not to have to deal with many toll roads yet.

Then you have a car manufacturer (Volkswagen) that has been getting incredible performance out of their diesel engines, and they get dinged for emission standards. I guess we will pay a carbon tax one way or the other.

I am way off the topic of scrap prices, and probably venturing into the realm of political talk, so please feel free to delete if needed Moderators, sometimes I just can't help myself.

 

[lantraxco]

Yair . . .

hetkind



Maybe not but they have some of the worlds cheapest to produce oil . . . they can remain in profit when the US deep water, the US shale and the Canadian oil sands are taking a hit.

These disastrously low oil prices (in my opinion) have in part been caused by the low interest rates in the US which has lead to significant non sustainable US production.

Cheers.

Scrub, what do you mean by "non sustainable" ? Just curious.

 

[lantraxco]

If the SHTF, all we have to do is slap a very unpopular $20 or $30 a barrel import tax on all imported crude and Robert's your Aunt Jane's husband, US and Canadian oil will be well worth producing. That and reduce grain exports by about a quarter and stockpile that.... wait and see how quick we can "OPEC" the world with food prices. It's all in being willing to do what's necessary, even if it's not popular.

 

[lantraxco]

CM, I realise that, but I get a burr under my saddle when people in the US complain about their "high" gas prices when the rest of the World pays more, whatever the reason ......

Nige, we are badly spoiled, I won't argue about that. You have to keep in mind though that we're roughly 3,000 miles from Ocean to Ocean and there's something like 2.5 million Class 8 trucks and 25 million total commercially registered trucks on our highways.... when distances are so long, fuel price changes effect literally everything dramatically. Hell the price of fuel to haul the fuel jacks the price up even more at the endpoints. Our wages have been for the most part stagnant for forty years in terms of buying power, so those of us at the dirty end of the stick tend to be a bit grumpy about grocery prices going up!

 

[old-iron-habit]

China has the largest shale oil deposits in the world according to a well healed friend that is a independent oil buyer for world wide large corporations. He says China is just now starting to gear up and drill and predicts that when they get really rolling with there production the oil prices will drop even further. Of course they will not use good environmental practices and back it up with cheap labor. My friend says he predicts they will put a huge damper on the middle east. Drilling in the US costs more, pumping does not. We have enough new wells in production now to supply ourselves and export for many years and make money at 45 dollar oil. Our real problem is our refineries are the sh*ts and hard to get the Ok to build some new ones.

 

[Nige]

Whatever country in the world extracts oil from shale it's still not going to be as cheap as drilling a hole in the ground and when you hit the right depth oil spurts out of it ........

Nige, keep in mind 5-8 dollar per gallon gas will shut the US economy down.

I can see how it would make it less competitive but I find the idea of a fuel price hike shutting it down to be a bit far-fetched TBH.

 

[Scrub Puller]

Yair . . .

As Oxbow quite rightly points out there has been a bit of a hi-jack on this thread but, in answer to lantraxco what I meant by "unsustainable" is the scenario where a company with good acreage was able to borrow billions to develop/drill/produce with an oil price north of (say) eighty five dollars.

Outgoings/production costs remain much the same when the oil price drops to <forty dollars so the reaction is to drill more wells to increase production to pay the bills hoping to hang in there long enough until "prices recover" . . . an unsustainable situation and it seems some of the smaller players are not going to make it.

It truly is a disastrous situation which inevitably has/will lead to hard times on the oil patch.

I think it may be best if I make this my last post on the subject.

Cheers.

 

[hetkind]

I was giving the low scrap pricing some thought...the low prices reflect both high scrap inventory and low demand for new steel, both due to China's slowing demand for raw materials. Oil prices are being driven down by multiple factors, large amounts of expensive new production and ISIS dumping stolen oil into the market at rock bottom prices. OPEC is unable to change either factor, and is dumping their oil to keep up their lifestyles. The only thing to do is crush ISIS and stabilize crude oil!

 

[Nige]

Wasn't that the real reason for invading Iraq and not the BS regarding WMD....?

 

[hosspuller]

Wasn't that the real reason for invading Iraq and not the BS regarding WMD....?

If you're speaking about getting oil from Iraq... No. The Iraq oil is sold on the open market. The "war for oil is a just a boogey man made up by the anti war factions. When the Iranians threaten the oil shipping through the gulf, remember American oil supplies don't pass there. Most of that oil is destined for Europe & Asia. The oil market panic is what will affect American oil supplies.

 

[Nige]

I was not specifically speaking about exporting oil from Iraq to the US but more along the lines of exporting oil from Iraq to anywhere. Effectively this required a regime change, a process in which certain countries were more than happy to take part, the issue of WMD was simply the smokescreen under which said regime change was effected. In hindsight it didn't end well for anyone did it, especially the Iraqis.....

 

[lantraxco]

Except now we're finding evidence of WMD's that were transported to other middle east countries when saddam knew the US was coming..... oddly enough I always thought it was smoke myself, but it appears not. After all he was gassing Kurdish people in Iraq....

 

[Old Doug]

been stockpiling scrap since last christmas. so now y'all are saying I need to be stockpiling fuel too

Unless your fairly young i wouldnt stockpile scrap but then agin i have made money cleaning up dead guys stockpiles. There is a guy that retiered he gos to all the auctions and gives big money for scrap. I heared him say that if it dosent go up then his kids can sell it. I have cleaned up alot of places like his and the kids never come out as good as if he had stockpiled his cash.

 

[JBGASH]

Whatever country in the world extracts oil from shale it's still not going to be as cheap as drilling a hole in the ground and when you hit the right depth oil spurts out of it ........

I can see how it would make it less competitive but I find the idea of a fuel price hike shutting it down to be a bit far-fetched TBH.

Any way you stack it 7-8 dollar / gallon fuel to US consumers will be disastrous and will shut the economy down. The bright side of that is we know it now and are full steam ahead with alternative energy sources to prevent it from happening.

 

[lantraxco]

And yet every alternative energy source there is out there, when you do an honest cost/return analysis over the estimated productive life... comes out around the equivalent of your $7-$8 dollar figure, so how does that help? I'm all for alternative energy if it's truly clean, but I don't want to be going hungry because my tax dollars support it or my state regulations require it's use in order to force us to it. Or were you being sarcastic? LOL.

We're sitting on a thousand years of natural gas right now, all we have to do is perfect the fuel cells to run off it, the storage tanks for our vehicles, and the filling station networks, we're golden and we won't need DPF and SCR and DEF and EPA.... Won't need power lines to our houses, just a metal box in the side or back yard connected to the gas pipe, a unit the size of a dishwasher will give you lights and heat for cheap and the only emission will be water vapor. Just as soon as big oil squeezes the last drop out... of our blood of course.

 

[JBGASH]

Lantraxco, No sarcasm intended from me. But renewable fuels like ethanol, solar energy compete with fuels in 3-4 dollar gallon range. Our local ethanol plant has been profitable for the last several years for example. There are many solar units being installed and everyone around this area claims a 100% payback within 7 -10 years or less depending on usages. We do not have wind units in this area but they must be good for as many that have been built over the last 10 years. Natural gas is a great source that we have plenty of, but as you say we need infrastructure to support using it beside for heating. All these other sources of energy will put a huge dent in our oil dependency from others abroad. JMHO

 

[Nige]

Maybe we need to move the whole energy discussion to another thread but the government here has recently removed subsidies for the construction of new onshore & offshore wind energy projects and the developers are now saying that without a subsidy to build them they can't make them pay. Make of that what you will....... IMO it's very difficult to figure out what is a level playing field where energy is concerned.