Material Demand Aggregator Supply Dynamics Sees Demand Outpace Price Predictions
If your January looked like our January, then you have probably read a few price forecasts, metal outlooks or more than one economic analysis. You may have even attended the recent steel market outlook we gave last week. We would suggest one more outlook that metal buying organizations might find relevant this one supplied by material demand aggregator Supply Dynamics. The Supply Dynamics 2011 Metals Outlook makes for an interesting read because the company aggregates the raw material volume of 14 of the largest OEMs, according to their website, which includes 2000 parts suppliers spanning a range of industries from medical, nuclear, heavy industry, aviation, petrochemical and industrial gas turbines.
Not only does Supply Dynamics maintain broad visibility across industries, it also has broad visibility across metals, particularly in stainless steels, aluminum, nickel but also steel and copper.
Based on that demand visibility, Supply Dynamics offers up several noteworthy trends and in particular, on the demand side of the equation they have pointed to growth in the following areas:
- Both auto and aerospace demand and sales have improved. The company anticipates aerospace demand to increase once the 787 moves into full commercial production
- The US nuclear and wind industries will likely stay flat largely due to the failure of cap and trade legislation, but oil prices, if they exceed $90/barrel could provide the impetus for some of these alternative energy industries to come back to life
- Housing markets up but commercial construction flat
- Global energy industries up
On the supply side of the equation, Supply Dynamics points to a few disconcerting factors that have gone largely unreported. The first factor involves the acquisition of key alloying materials used to make steel by both governments and companies alike. Besides coking coal, severely impacted by the recent Australian floods, Supply Dynamics suggests metals such as molybdenum also face supply constraints. In addition, the company sees price increases for stainless long products due to a fire at Roldan’s stainless plant in Spain.
Readers can learn more about Supply Dynamics’ aggregation model here.
Their specific price forecasts can be found here.
–Lisa Reisman
Disclaimer: Supply Dynamics is a sponsor of MetalMiner
MetalMiner and its sister site, Spend Matters, along with Nucor, will host a live simulcast, International Trade Breaking Point on March 1, 2011. If your company sources products from overseas, you will not want to miss this half-day event:
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