Will metal prices continue to rise? Could the global semiconductor shortage have a bigger impact on the metals market? Why are aluminum prices pacing upwards? Which has more impact on stainless steel surcharges: chrome or nickel?
On the May 6 episode of Cup o’ Joe, Ryerson’s Director of Risk Management and Commodities Hedging, Nick Webb hosted an interactive discussion on market conditions and driving factors going forward. Did you miss it? Watch the complete session here.
If you prefer to sip your Cup o’ Joe recap instead, check out the highlights below.
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The Shortage of Everything
Industrial metals are pricing at five-year highs and supply remains tight. It’s a scenario that is playing out across seemingly every commodity market worldwide, from lumber to corn.
Among the most significant, and with the potential to impact the steel market at-large, is the ongoing shortage of semiconductor chips. Webb discusses the announcement by Ford Motor Co. to reduce planned production by 50% in the second quarter due to the shortage and what it could potentially mean in the long run.
Could China Tighten the Reigns?
Global PMI (purchasing managers’ index) data shows that nearly all regions of the world are in expansion territory. But could China, which makes up 50-60% of the world’s commodity demand, slow this trajectory by tightening its credit conditions?
The Future of Carbon Steel Prices
Capacity utilization rates, which have been steadily recovering since the slowdown last year, have been slowly tapering off. What is the reasoning behind this and what could it mean for supply and demand dynamics?
Also, futures markets anticipate that carbon steel prices could remain higher for the next few months before easing up later in the year. But could that floor to which prices will fall be higher than previously anticipated?
Aluminum Prices Pace Higher
Aluminum prices continue to pace higher as the cost of ingot is up and the Midwest Premium has hit an all-time high. Webb says to keep an eye on freight rates and the potential long-term impact on aluminum prices.
Nickel Prices Rally
Nickel inventories appear to be remaining abundant. So, why are prices continuing to rally? It could be the by-product of some larger market dynamics. Webb provides some insight.
Chrome or nickel? Which has the bigger influence on stainless steel surcharges? Webb weighs-in on how that answer may have changed over recent months.
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