Commodities Update
COMMODITIES UPDATE written by Bob Garino is a review of supply, demand and pricing activities in various commodity markets.
Mixed economic news has metals markets searching for direction
Base and precious metals were off and running as the week began, initially spurred on by the weak dollar, positive expectations concerning global economic growth, and even bad Chinese weather. Wall Street, meanwhile, was also encouraged by October’s retail sales along with Ben Bernanke’s remarks on the U.S. economy and to “… ensure that the dollar is strong and a source ...... Read More
Comments (0)Smaller job losses could lead to job gains later
It’s Friday the 13th…anybody superstitious? With little in the way of U.S. macro-economic news this week, we turn to China and Wednesday’s report that showed that industrial output accelerated to 16.1% year-on-year in October (versus 13.9% in September) - the fastest growth so far this year, and the largest annual growth rate since March ‘08. Yipes! As widely reported, ...... Read More
Comments (0)BIR Report: Nonferrous crowd more upbeat than ferrous folks
Not much in the way of positive ferrous news to report, given the consensus views shared at last week’s Bureau of International Recycling (BIR) meeting in Amsterdam. Most expressed the belief that the current global steel market is over baked, and that the primary price drivers for both finished steel, and ferrous scrap, was nothing more/less than a destocking/stocking cycle that has run it ...... Read More
Comments (0)Steel’s demand, price strength peaked back in August
Industrial Production for September was (again) better-than-expected, at 0.7% growth and the August index was also revised up. Credit last month’s jump in production to the auto industry: motor vehicle output rose 8.1% as assemblies of autos and light trucks increased 13.0% to 7.15 million vehicles. So, will October’s IP moderate due to an assumed slower-paced auto sector? Not so fas ...... Read More
Comments (1)The ‘Great Recession’ is over, so Q4 steel prices won’t collapse
Just in case you missed it: “The Great Recession is over,” according to the National Association for Business Economics’ latest survey, taken Sept. 2-Sept. 24. The survey of 44 professional forecasters found that 80% of the respondents believed the U.S. economy was expanding after four straight quarters of decline. The survey also predicted that gross domestic product (GDP) wi ...... Read More
Comments (4)Volatile and sliding steel scrap prices dominate marketplace chatter
Following last week’s payrolls report, many are thinking that the so-called V-shaped recovery may have lost its upward thrust. When it comes to consumer spending, fear of unemployment is almost as bad as actual joblessness… On more positive note, Monday’s Institute of Supply Management (ISM) Non-Manufacturing index came in better than the consensus expected, signaling growth i ...... Read More
Comments (0)In the recovering economy, commodity prices remain unpredictable
The third quarter ended this week, as did the U.S. government’s fiscal year with some projecting a deficit of some $1.5 trillion. Wall Street is expecting some big earnings to be announced in the weeks ahead, so we’re expecting the Dow and the S&P to react accordingly, despite this week’s heavy-duty selling. Will we soon see the Dow at 10,000? And what does that threshold ...... Read More
Comments (0)Recession is over but economic indicators remain mixed
This past week’s economic releases were generally constructive, highlighted by better-than-expected industrial production (IP), retail sales, and residential construction figures. Less favorable numbers were July business inventories that fell, along with a higher-than-expected producer price index (PPI) and consumer price index (CPI) numbers for August and lower-than-expected sales of big ...... Read More
Comments (1)Recession is over but steel prices are all over the map
It’s been a not-so-busy week for major economic releases; also, most of the recent news has been generally positive.As reported by NAM, for example, of the 12 major reports that came out last week, seven were positive, four were negative (but improving) and “just one worsened” - and that would be the unemployment rate that hit 9.7% last month — a 26-year high. The lates ...... Read More
Comments (2)Despite price escalation, metals markets remain weak
Before we forget: Have a great Labor Day holiday weekend…we’re outta here!But first, a look at ferrous commodities: We’re reminded that despite all the news of higher tags for hot-rolled steel sheet in coil for September/October delivery, the August average was $475/net ton, up $45 from July but still quite some distance from what steel mills are now expecting. As noted by Pur ...... Read More
Comments (0)Back from vacation and things are looking better
We’re baaa-ack! All refreshed and ready to go…well, sort of. So, what did we miss over these past two weeks? Well, there was some initial push back on the London Metal Exchange and on Wall Street, and while most markets still look overbought. Most macro indicators leave some room for doubt going forward. Although not all base metals have gained ground over the past two weeks (aluminu ...... Read More
Comments (0)Economic indicators are starting to show growth
The first look at the second quarter GDP came out this week at -1.0% growth. Though still negative, it’s quite the turnaround from the first quarter’s -6.4%, and helped along by the healthy increase in government spending. Consumer spending, however, was lackluster at best since it fell 1.2%. The revised GDP figures also pointed to a weaker economy than previously thought. From the f ...... Read More
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