Final Thoughts

As the fireworks ramped up between the Republicans and Democrats, the federal government shutdown ran from Oct. 1 to Nov. 12, a total of 43 days.

Customs and Border Protection (CBP) kept core customs processing and tariff collection going during the shutdown. Ports stayed open and continued clearances, although reduced staffing at some agencies caused targeted inspection delays.

Scrap finds a way

Still, we have the opportunity to play Monday Morning Quarterback. It was not at all assured at the time things wouldn’t go from shaky to worse. Or that there wouldn’t be unforeseeable knock-on effects.

While many services were impacted, (hope you didn’t have to fly last weekend), benefits were cut, and many went without pay, we found this response from a scrap source interesting: “Maybe I am naive, but I see no connection between the government shutdown and our industry.”

Another source commented: “To put it succinctly, there has been zero tangible effect on scrap relating to the shutdown.” 

On the surface, this might seem like a no-brainer: Of course. But, on the other hand, when the government grinds to a halt, how does an industry just shrug it off and push forward?

Recall that scrap prices came in sideways in November on all the grades SMU tracks. But among the market commentary there was scant mention of the shutdown. Why?

Is there anything unique about the dynamics and ethos of the US and, more broadly, North American scrap industry? Well, if anyone was well positioned to comment on that it would be SMU’s Stephen Miller, who started his scrap career back in 1978. That was even before Ronald Reagan’s air traffic controller strike. (Imagine that, air traffic controllers even had computers in 1981. I looked it up.) So what exactly characterizes the scrap industry and what is the spirit behind it?

Miller weighs in

The scrap industry is a recycling business. There is always activity. The trash is always generated and picked up and picked through, barring a strike.

Industry stamps out parts and replaces machinery and equipment. Cars outlive their useful life or crash and are hauled to the wrecking yard. Railroads take up track and replace damaged cars. 

In an economy that is constantly renewing itself and continuously producing goods, recycling is ever present. There is an entire industry that handles all these materials and earns their living by doing so. This happens with government or not, no matter who is president or running Congress. And all players are fortunate it does.