Metal Price News - November 2024
The US economy is still strong, while Europe is struggling. Germany, France and Italy in particular are falling behind.
Both the European and US central banks are cutting interest rates, but the dollar is strong after the US election.
Macroeconomic developments
USA
Donald Trump has been elected as the next president of the United States and also secured the Senate and Congress majorities.
First and foremost, this has strengthened the dollar significantly and caused commodity prices to fall.
The US stock market rose right after the election, but now things have calmed down again.
According to the PMI index, private consumption is still growing. But the money is being spent in the service sector and not on products. When consumers stop buying products, it is usually a matter of time before other sectors of the economy are affected.
China
China has announced several economic stimulus packages lately to boost growth. Unfortunately, the packages have had a very short-lived effect.
The market has been disappointed with the size of the stimulus packages. The Chinese economy continues to show slowing growth.
Europe
On 17 October, the European Central Bank (ECB) cut interest rates by 0.25%. The same cut is expected at the next meeting in December.
Some major European economies (Germany, France and Italy) are struggling, which has caused speculation that the cut may be 0.50% in December.
The economic challenges weaken the EUR against the USD.
Copper
Copper prices have slightly declined since the US election.
This is not an indication that the market has low expectations for copper. The reason is simply that the dollar has gone up, and copper is traded in USD.
When the dollar is strong, the price of copper is of course also comparatively higher for the rest of the world. This has caused demand, and thus the price, to fall.
The markets are still keeping a close eye on the Chinese real estate sector, which has a major impact on expectations for the copper price.
Aluminium
On Friday, metal prices, especially aluminium, surged.
The reason was a decision from the Chinese government to cancel the export rebate on aluminium from 1 December, which would cause prices to rise.
The rebate was a 13% discount on all aluminium exported from China paid by the Chinese government. It has been a way to gain market shares and become the preferred supplier for Europe and other parts of the world.
Stainless steel
The end of the year is calm with low demand and falling prices. Wholesalers are trying to lower their stocks before settling the accounts at the end of December. This pattern repeats every year.
We expect both prices and delivery times to pick up in the first quarter when the inventories need to be replenished.
The supply chain is stable across sheets/plates, bars and welded tubes: In short, nothing is happening at the moment.
Nickel
The nickel price is still low, and we do not expect major fluctuations.
As we have written about before, Indonesia is the primary factor here.
Indonesia is the world's largest nickel producer, and right now there are two opposing forces at work in the country.
On the one hand, there is a global surplus of nickel right now, which is pushing the price downwards.
On the other hand, markets are generally concerned about the long-term prospects of high-quality nickel mining in Indonesia. When will the mines run out?
Scrap
Due to the overall slow pace on the market, the scrap price is low at the moment. When the plants are not smelting at full capacity, the demand for scrap is lower.
As we mentioned last month, this may also be one of the reasons for the low demand for new nickel.