The session at the ISRI2016 show in Las Vegas last week included an address from ISRI’s outgoing chair as well as an in-depth dive into global economics. Speakers expressed optimism but also held the view markets won’t ever be what they once were.
Kramer Metals’ Doug Kramer, who recently completed a two-year term as ISRI chair, told attendees that “tough times require not only tough decisions but decisions with purpose.”
He added, “When markets are good and margins are wide, anyone can make money. … In times like these, you need to make the most of limited resources.”
In a conversation following Kramer’s address and an awards ceremony, Timothy Kneen, the chief investment officer for IFAM Capital, reminded attendees that companies that can survive the current markets downturn have an opportunity to make acquisitions and investments at great prices.
“There is a point in time where our markets will return,” Kneen said. “The question is whether or not we’re going to be bold enough to take advantage.”
He was joined by Adam Schor, senior vice president and director of Global Equity Strategies, and Tony Crescenzi, executive vice president, market strategist and generalist portfolio manager for PIMCO. Both analysts indicated the gradual improvement of the global economic market will aid commodities markets but perhaps never restore the unprecedented margins the industry saw around 2011.
“We went through a once-in-a-lifetime commodity boom and we have to live with the hangover,” Schor said.
Noting “the seeds have been sewn” for the global economy to stabilize and grow over the next couple of years, Crescenzi said current growth is not as swift as economists would like.
“Demand is here, there’s growth,” he said. “It’s just not strong; it’s not vigorous.”
The latest data on commodity prices suggest a recovery is underway. The value of mixed paper, ferrous scrap and HDPE, for example, have all risen in 2016.
As for when recycling industry professionals can expect commodity prices to make a sustained rebound, the analysts took cautiously optimistic stances.
“There’s probably two to three years before you see a balance,” Schor said, adding that “the surprise element is that the U.S. turns out to be stronger than people are penciling.”
Crescenzi suggested a global economic rebound could occur “in less than two years.” His comments were met with applause from conference-goers.
The notion of being primed for growth also came through in Kramer’s address.
“We are as strong as ever, as vital as ever and ready to do and be more,” said the outgoing chair.