“From what I’m seeing, order books remain robust for most manufacturers, but we’ll let you guys take it from there.”
That was MetalMiner Managing Editor Lisa Reisman’s take on the market yesterday morning, speaking to the audience of small- to mid-sized manufacturing organizations at the Commodity Trends Outlook 2013 in Grand Rapids, hosted by The Right Place, MMTC-West and the Supply Chain Management Council of West Michigan.
Indeed, a few of the audience members did take it from there. Jack Robbins, corporate controller at Hadley, which manufactures semi-truck bell horns and have a considerable zinc metal buy, told me that Hadley’s “orders softened in Q3, but have been picking up since.”
Robbins anticipated slow growth through the end of the year and into a majority of 2013.
While conference attendees surprised Lisa last year with rare earth inquiries, this year there didn’t seem to be any huge surprises — the growth mantra is still “slow, but steady.”
Speaking to the rare earths market, Lisa mentioned that the impact of China’s policies on exports has stabilized rare earth prices. “It will be interesting to see if rare earths prices will start ticking back up.”
Get the latest MMI® report for September here.
Ferrous Wheel Keeps on Turnin’
Some things to think about on the steel market and steel price direction:
“When the mills are at full capacity, they’re able to pass through their costs to you, the consumer. The inverse is also true,” Lisa said. “As we move from a full-capacity world, we’re seeing more pushback — the mills’ prices are not sticking as well as they used to.”
US Domestic Steel Prices
Source: MetalMiner IndX℠
Steel prices in 2013 should remain range-bound in a rather tight band, and imports should keep a lid on prices.
“Aluminum and zinc forward curves are misleading,” Lisa said, alluding to Stuart’s excellent recent coverage of forward-curve dynamics. “The point is that the curves are not indicative of what will happen. In some respects, a steep forward curve like aluminum indicates that there is too much supply. This could muddy your view of where prices are going.”
“The last three QE announcements caused aluminum price drops, not rises, according to Harbor Aluminum,” Lisa said, “and that’s what happened with the latest announcement. Harbor is saying lock in forward for 2013 now or around now, in the second half of September.”
Lead is the base metal we’re still not sure of, according to Lisa. Wait a week after the latest QE announcement and we’ll see prices come back down. We’ve seen inventories of lead drop over the past couple months, which could lead to some price rises, she said.