Amazon.com Reports Loss, But Leads Warehouse Construction Boom

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Amazon.com’s reported net loss has a silver lining – the company is pumping money into its physical warehouses (among other things).

Not only a model supply chain exercise, but also potentially a small yet not insignificant driver of demand for steel, aluminum and other metals used in warehouse construction.

Via Bloomberg: “The company has spent money on getting warehouses closer to customers, something that should reduce shipping costs over time. Shipping as a percentage of revenue was 4.6 percent, the same as the previous year, showing the effort isn’t yet at a scale that is adding to profit…

“We’re investing very heavily into the business,” Tom Szkutak, Amazon’s CEO, said on an earnings call yesterday. “We’re continuing to add capacity. We’re investing for the large opportunities we have in front of us.”

Read the latest analysis in our Construction MMI®.

Current Steel and Raw Materials Prices

The steel billet 3-month price rose 7.7 percent on Thursday, July 25, making it the day’s biggest mover. After two days of falling prices on the LME, it closed at $140.00 per metric ton. A $5.00 decline in the steel billet cash price on the LME left the price at $110.00 per metric ton.

Chinese steel prices closed flat for the day. The price of iron ore 58% fines from India remained largely rangebound.

* Get the complete prices every day on the MetalMiner IndX℠

The price of Chinese HRC continues hovering in place for the fifth day in a row. The price of Chinese coking coal was unchanged.

The 3-month price of the US HRC futures contract increased 0.3 percent to $612.00 per short ton. The spot price of the US HRC futures contract finished the day at $636.00 per short ton following a 0.2 percent increase.

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