MetalMiner experts recently joined ROTH Capital Partners for a webinar that covered a wide range of metals topics, including oil prices, macroeconomic trends, and insights into the aluminum, steel and copper markets.
The webinar, which took place July 14, followed up on a previous MetalMiner-Roth webinar on May 20, 10 days after metals surged to record highs. Copper, for example, reached an all-time on May 10. MetalMiner CEO Lisa Reisman and Vice President of Business Solutions Don Hauser joined to share their insights on various markets, recapping metals movements in the two months since that peak.
If you missed it live, register here to receive a copy of the webinar recording to hear all of Reisman and Hauser’s insights from the hourlong webinar.
On July 28, get a sneak peek of the MetalMiner annual budgeting and forecasting workshop (a three-hour virtual event that will take place in August 2021). Get ready to plan for 2022.
While prices have come off of the record highs seen in May, they remain elevated. In short, we remain in a bull market.
“We are still in a bull market,” Reisman said. “The nonferrous metals are taking a pause but unless we see them start to fall off toward support levels … they’re still in a bull market.”
However, in terms of the “supercycle” narrative — which we have covered in this space previously — MetalMiner remains skeptical.
“The reason we’re struggling with the big supercycle narrative is that we would expect to see a decade, 1o years, of sustained, upward demand,” she said. “We don’t quite see that.”
With that said, metals demand currently is strong across a range of industries.
In metal-specific observations, Reisman characterized aluminum as in a bull market, albeit one that has started to trend more sideways of late.
“Since May, prices have been slightly trending downward,” Reisman noted. “In technical analysis, it’s something we call the descending triangle. Volume has increased once again, which is more of a negative. It’s more of a ‘sell’ volume.”
Looking ahead, can aluminum buyers expect any type of relief at the end of this year and going into 2022? Firstly, Reisman said she is looking to see when the aluminum price breaks MetalMiner’s support level price, as that is an indicator of weakness.
While it is not possible to know with certainty that it will break support, there likely will be some easing in Q4.
However, some news that could change the aluminum outlook significantly — which was not in play during the previous May 20 webinar — is the Russian government’s plan to impose export taxes on a number of metals, including aluminum. The taxes will go into effect Aug. 1 and run through the end of the year. Russia is the second-largest exporter of aluminum ingot to the U.S.
“If that gets implemented and holds firm for the rest of the year, we may not see aluminum go down very much from here,” she added.
Meanwhile, in Europe, aluminum producers have called for exemption from the E.U.’s carbon border adjustment mechanism.
As for steel, prices continue to rise, much to buyers’ chagrin.
Steel price rises, however, have slowed down compared to previous months.
So what would it take for steel buyers to get some relief?
“Relief is really flatness in price — not so much falling down — and material availability,” Hauser said. “Right now, everybody seems to be scrambling to get material, there’s not enough material to meet demand out there.”
Lead times remain “off the charts,” Hauser added, with hot rolled coil checking in at around 8-10 week and cold rolled usually a couple weeks longer than that. In terms of price, the spread between HRC and CRC continues to grow month by month and has more than doubled since the start of the year. The rising spread demonstrates strong demand in the cold rolled coil market.
In terms of supply, inclement weather has delayed the startup of Steel Dynamics Inc.’s new Sinton, Texas mill.
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