Wall Street says a recovery in aluminum demand and prices may have to wait until 2004. Prudential Financial analyst John Tumazos lowered his price forecast for ingot and dropped his outlook for world demand growth in 2002 to 3.5% from 4.6%. "We do not have enough evidence to say the recovery is on its way," agrees Georges Lequime at HSBC Bank. "We are seeing only a little bit of nibbling in demand." New U.S. orders through March were up 3.6% from the previous year. Consensus forecast has 2002 ingot at 67¢/lb, but so far this year tags have been averaging at 63¢, which is below the 2001 average of 65¢.

Prices of capital goods ranging from metal-cutting machine tools to electric transformers have fallen in recent months. This decline in the average cost of buying a new piece of equipment is one reason to be hopeful that business investment will rebound soon, says economist Dale W. Jorgenson of Harvard University. From 1997 to the end of 1999, the cost of a wide range of capital goods dropped. In 2000 and 2001, however, prices for equipment rose as producers tried to take advantage of then-heavy demand.

High-carbon ferrochrome prices continue to lag. Buyers at steel mills recently bought the material at 29.5¢/lb, which is right in the middle of the latest high-carbon merchant spread of 28¢-31¢/lb. Ferrochrome prices in the U.S. have been at historic lows in the past year due to weak demand and plentiful supply. The market spread hit a low of 27¢ earlier this year, the lowest price since 1974 when the spread low was 26¢.

The world's top three rubber producers—Thailand, Indonesia and Malaysia—plan to cut rubber output and exports as well as set up a joint-venture consortium to buy and stock rubber to help shore up prices. Global production rose 5% last year while demand was flat. Natural rubber sold in April at historical lows of 67¢/kilogram ($1.48/lb) on the commodity exchanges of Asia.

Phelps Dodge and other copper producers expect world copper cathode to average 75¢/lb this year because of low world inventories and production curtailments by several firms. Their forecast also anticipates a solid rebound in demand, which hasn't yet happened. Copper prices slumped to 73¢ on average last year, their lowest nominal levels in 14 years and a 13% decline from 84¢ in 2000. This year, worldwide demand is expected to grow 2.5%. However, prices have averaged just 71¢ so far this year because of lower-than-expected first half demand growth.