Key Metrics and Supply Alert
Staff -- Purchasing, 3/3/2005
- The nuclear-power industry is laying the groundwork to build new plants in the U.S. for the first time in two decades. Faced with skyrocketing natural-gas prices and uncertainty about the costs of containing carbon emissions from coal-fired plants, electric companies believe nuclear plants are becoming more economically competitive and safer.
- Much of the history of commodities this decade will be written in China and India. These two nations already have demonstrated the ability to create shock and awe in world markets for oil, natural gas, steel and industrial metals, says chief strategist Don Coxe at Harris Investment Management in Chicago. Commodity producers weren't ready for the 2004 demand surge, he says, noting that producers have yet to prepare for the future—largely because they aren't sure whether long-term Asian purchasing growth will be slow or rapid.
- In less than three months, buyers in the huge and historically volatile polyolefin market will be able to hedge and manage risk with plastic futures contract for the first time. The 127-year-old London Metal Exchange is diversifying from its core business by launching contracts in polypropylene and linear low-density polyethylene on May 27.
- Expanded access to domestic natural gas resources could save consumers $80 billion in energy bills over the next 15 years, says the American Gas Foundation. Prices could drop sharply if policies are enacted that permit drilling in the eastern Gulf of Mexico, off the East Coast and in the Intermountain West. Other price-reducing actions include building a pipeline to move natural gas from Alaska to the lower 48-states and boosting imports of liquefied natural gas.
- The United Nations predicts a slowdown in global trade in 2005. The UN report says global trade growth will drop to 8% this year after a 10.6% increase in 2004. The report also says growth in world output will increase by 3.25% in 2005, as compared with a 4% rise in 2004.
- Shortages of key building materials are easing for critical construction components and could trigger even further slides in pricing this spring. Since last summer, homebuilders have complained that concrete, lumber, and brick and wood products such as oriented strand board prices have soared—making these products difficult to obtain and more costly. But, in January, the number of U.S. homebuilders who say they face a shortage of pricey building materials fell to 27%, according to the National Assn. of Home Builders.
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