This Morning in Metals: Global semiconductor shortage may continue into 2023

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semiconductor and automobile

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This morning in metals news: The global semiconductor shortage may continue into the next year or more. In other news, after failing to reach an agreement Thursday on the $1 trillion infrastructure bill, the U.S. Senate aims to finalize it Saturday. Also in the news, South Korea plans to raise its stockpiles of 35 “critical metals.”

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Global semiconductor shortage may continue into next year or more

The global chip shortage, which has plagued the automotive industry, remains strong and is spreading across industries. Apple CEO Tim Cook issued concerns recently that the problem has reached his industry and would hurt iPhone sales, while Intel CEO Pat Gelsinger has concluded that such shortages would affect industries for at least the next year or two. Meanwhile, GM CEO Mary Barra cautioned on Wednesday that “we’ll continue to see impact this year, and it will have a tail into next year.” Once again, General Motors must shut down assembly lines for multiple truck plants beginning next week due to the shortage. Ford Motor Company recorded a 50% drop in second-quarter profits, and Subaru CFO Katsuyuki Mizuma reported the company’s car inventory has descended from an average of 45 days down to 7.

Although the White House hopes to mitigate the shortages and expand chip manufacturing, no immediate resolution is expected.

U.S. Senate aims to finalize infrastructure bill on Saturday

After failing to reach a final agreement on Thursday, US senators look toward Saturday to move forward on the $1 trillion infrastructure bill. Obstacles remain as lawmakers continue to negotiate various demands — from billions of dollars for Defense Department improvements to a provision that sources funds through stricter tax enforcement of cryptocurrency transactions. If passed, the Bipartisan Infrastructure Framework would include investment in roads, bridges, electric vehicle infrastructure and other public works.

South Korea plans to raise stockpiles of rare metals

Announced Thursday, South Korea will boost its stockpiles of 35 “critical metals” — including nickel, cobalt, lithium, manganese, magnesium, titanium, bismuth, selenium, silicon, tin, arsenic, boron, cadmium, platinum group metals and rare earth metals. The measures will raise coverage from 56.8 days to 100, and the goal includes the aim to further secure the supply chain for industries including electric vehicle batteries and renewable energy. The country, which is home to LG Chem, SK Innovation, Samsung and SK Hynix, is a key global supplier of semiconductor and battery technologies.

Stop obsessing about the actual forecasted steel price. It’s more important to spot the trend.

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