Source: Jeff Yoders/MetalMier
This week saw the bears continue to run roughshod over our monthly MetalMiner Indx as the July MMI was almost universally down.
How bearish was it? I saw Yogi and Boo-Boo stealing picnic baskets from our raw steels index, that’s how bearish!
Yet, even as steel, nickel and copper hit multi-year lows, we did see some proof that at least some of our metals may have hit rock bottom this week.
Banks Buying Aluminum Again
In the wacky world of aluminum warehousing, Japanese stocks of the light metal finally started falling again in June. That’s the first time in a year. The cause is big banks in the stock and finance trade purchasing and warehousing the metal as it’s now inexpensive enough for bankers to bet on it as an investment again.
No one in that business invests in aluminum without expecting the price to go up and prices are low enough, now, to make it worth the banks’ while. Umm, yay?
Chinese Steel in the Crosshairs
A week after the US steel industry won unprecedented protections from foreign, particularly Chinese, steel, things got worse for the Chinese steel industry.
The sell-off in the Chinese stock market is hurting base prices and demand in the world’s largest construction market is not recovering. Exports seem to be the only place Chinese overproduction can go.
Can prices go lower? Always, but these are certainly good signs for the battered aluminum and steel markets. Low prices may finally be equaling increased demand for aluminum and, at least with the new tariff protections here in the US, China might finally have to consider cutting steel production.