Metal Price News - March
Trump is causing a lot of political turmoil, but the commodity markets remain stable. The EU is trying to toughen up amidst the geopolitical chaos.
Macroeconomic developments
USA
Trump's tariff measures seem to affect Americans more than they affect metal prices.
The latest inflation report showed that US inflation has risen to 4.9%. With the new tariffs, this upwards trend is expected to continue in the coming period.
This means that the US central bank, the Fed, will likely keep interest rates stable to avoid inflating the economy.
One of the latest tariff measures is from March 12, when the United States raised tariffs on steel and aluminium by 25% so the tariff is now 50%. This particularly affects Canada, Mexico and Brazil.
We have not yet seen any major movements in commodity prices after the tariffs. It seems that the markets are responding calmly to Trump's many threats and wait for the actual measures and consequences.
China
The US has raised tariffs against China by 10%, and in response, China has raised tariffs on US goods by 10-15%. This means that the trade war is slowly beginning between the US and China, but the financial markets have not reacted in any significant way.
Internally, China is still struggling to get the economy moving. Youth unemployment has been as high as 25%, and the government is trying to create new jobs and boost economic growth.
Europe
Germany has a new chancellor in Friedrich Merz from the CDU, Merkel's Christian Democratic Party.
Merz comes with a tougher rhetoric towards the US and an attempt to unite Europe around more independent from the US.
One of Merz's initiatives is to reform the “debt brake” that Merkel introduced in the wake of the financial crisis in 2008. This will finance major investments in German infrastructure and military.
The EU has also discussed a major investment in European defence – in the order of 800 billion euros.
This is one example of the EU trying to navigate the complex interaction between the US, Russia, Ukraine and China.
We are seeing many new measures from the EU at the moment, such as countervailing duties and anti-dumping duties against Asia and new tariffs against the US. Products such as stainless steel for the pharmaceutical industry are likely to be part of the EU tariff package launching in a few weeks.
Overall, these measures have strengthened the euro against the dollar. This is a shift from the first weeks after the US election when the dollar strengthened at the prospect of Trump.
Aluminium
The aluminium price has been incredibly stable over the past month. The price has been between USD 2,620-2,720, in EUR 2,450-2,600.
Copper
Copper has also been stable between USD 9,300-9,875, in EUR 8,800-9,050.
Some days the market starts high after a night of news but then goes down during the day. This last happened on Monday due to expectations of new Chinese measures to strengthen the economy.
Stainless steel
Stainless steel prices are also stable despite the political turmoil.
Last month, we wrote that the Safeguard quota for Q1 was used up within 24 hours, and that the expectation for Q2 was roughly the same. This has proven to be true. However, this pressure does not seem to continue into the Q3 quota.
Taiwan is still offering goods in the Q3 quota, and this may be an early indication that European demand for Asian material is declining. But we will have to wait and see what happens when the quota opens on 1 July.
Sheets/plates
Lead times for sheets/plates have increased slightly since the beginning of the year and are now at 2.5-3 months. Prices are incredibly stable.
Bars
Bars are also very stable with a lead time of 3-6 months, which is not unusual. We do not expect the alloy surcharges to move significantly this month.
Nickel
Nickel has been moving slightly upwards, but this does not affect the price of materials.
