Week In Review: How Low Can Metals Go? Or Oil? Or The Chinese Yuan?

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Welcome to crazy MetalMiner’s low, low price week of falling metal prices, oil prices and devalued currency.

EVERYTHING MUST GO! Or Not…

…maybe prices will be lower next week? Who can tell in this crazy market? Check out our Metal Price Outlook for MetalMiner’s expert opinion. Free sample in the link.

Bears Everywhere

Our August MMI Report shows that nine of the 10 metals we track have hit an all-time low since we started tracking them in January 2012. It’s been a gradual fall for sub-indexes such as raw steels and renewables, whereas aluminum and copper suffered big drops this month that coincided with historic London Metal Exchange lows.

Three Best Practices for Buying Commodities

The strong dollar continues to drag down all commodities, shunting investment dollars elsewhere and depressing prices of investment metals such as gold, which hit a six-year low last quarter, according to the World Gold Council. Guess what else hit a six-year low? Oil, of course!

So, with energy costs so low, metal production will cost less and prices must eventually go up again, right? Ummm, not so fast. Demand for metals is still, generally, low and, for some of them, prices are below production costs.

Computer generated 3D photo rendering.

Feel free to drive across the country. Won’t cost much.

China has come up with a novel way to combat this problem, by simply making their own currency less valuable than the steel, aluminum and other metals they produce so that those metals can, then, be exported and purchased in places with higher-valued currencies, such as the dollar. Yes, it’s similar to digging a hole just so that you can then pay someone to fill it, but tell that to the International Monetary Fund, which insists that China is not manipulating its currency. Seriously.

Anti-Dumping Deluge

Not so fast! say US Producers, who filed an anti-dumping action with the Commerce Dept. and US International Trade Commission for hot-rolled steel products against seven countries this week. Chinese steel is already subject to hot-rolled tariffs so it was not included in the petition.

Free Sample Report: Our Monthly Metal Price Outlook

The Commerce Dept. and ITC will be busy in the next few months as they were already investigating imports of cold-rolled coil (China IS including in this investigation) and began another investigation this week of carbon steel pipe from Mexico, Turkey and South Korea.

US dollar vs. RMB

Guess which one is manipulated?

If you want to do your part to protect the US steel industry, send coffee, tea or over-the-counter stimulants to the Herbert Hoover building in Washington, DC, to speed the investigation along.

What About That Dollar?

An interest rate increase from the Federal Reserve might be around the corner. Some are predicting it will happen next month. This would be great news for metals and other commodities, but what about emerging markets? Doom and gloom. The Fed has a delicate dance ahead of it.
We will report every pirouette in the next few weeks.

 

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