Material Impacts On The Precision Machining Industry - December 2008
The prices of all of the raw materials that we track are well below last year’s levels, and volatile. Producers are in a race all over the world to idle capacity to prevent excessive supply from further damaging their margins.
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The prices of all of the raw materials that we track are well below last year’s levels, and volatile. Producers are in a race all over the world to idle capacity to prevent excessive supply from further damaging their margins. Low production volumes have also made sales of scrap problematic, with several shops reporting difficulties getting loads of scrap moved out. Reports of scrap dealers filing for bankruptcy protection have been heard. The North American price of most metals continues to be driven by global demand and events rather than local supply and demand.
Imports of Chinese finished steel products in October reached 713,000 net tons, an all time monthly high. The president of the Steel Manufacturers Association, Mr. Tom Danjczek said, “US imports of Chinese steel have jumped over the last 3 months. After peaking at about 500,000 tons per month during 2007, Chinese shipments to the US had dropped to about 200,000 tons early this year before rising in recent months. US steel imports from China now are averaging 600,000 tons per month, twice the monthly average last year.”
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Aluminum is down 19% from January; down 36% from its peak in July; and down 17.5% from November 2007.
Copper is down 39% since January, down 51% since its peak in July, and down 40% since November 2007.
Nickel is down 62% since January, down 62 % since its peak, and since last November.
The steel scrap commodity that we track is highly volatile down 69% since January, 85% off its peak in 2008, and off 60% off its price same month last year.
China coke is down 16% from January, 73% off its peak this year, and 35% off its price last November.
Typically these commodities’ prices are the same for consecutive trading days, weeks, sometimes even months, allowing for an easy determination of the most frequent price. Not so this month.
Low production volumes have also made sales of scrap problematic, with several shops reporting difficulties getting loads of scrap moved out. Reports of scrap dealers filing for bankruptcy protection have been heard.
The North American price of most metals continues to be driven by global demand and events rather than local supply and demand.
Please see the Analysis of Foreign Currencies prepared by Georgetown Economic Services posted along with this report.
Read the complete Material Impacts Report (PDF format): Material Impacts On The Precision Machining Industry - December 2008.
