Metallprisnyheter September 2024
Fears of recessions in the US and China are causing turmoil in the financial markets at the moment.
Macroeconomic developments
It has been 2 steps forward and 1 step back in the financial markets. The markets quickly recovered from the downturn in August, but only for a very short time. Now everyone’s eyes are on economic growth in the US and China, where recession is feared.
On the other hand, interest rates are going down in Europe and the US, and this could help the economies to gain a little more momentum.
Europe
Last week, the European Central Bank cut interest rates by 0.25% to 3.50%. The reason was that the European inflation continues to fall at the expected pace.
The positive signs resulted in a slight increase in the financial markets.
United States
Now the focus is on the US Federal Reserve (FED) because the US key figures also show falling inflation.
This suggests a 0.25% rate cut, but articles in both the Wall Street Journal and the Financial Times suggest that it will be a close decision in the FED on whether to cut interest rates by 0.25% or 0.50%.
A reduction, particularly by 0.50%, is likely to give new impetus to the financial markets, but the question is how long this effect can continue. The interest rate cuts are a symptom that the economy is losing momentum, and this is not good news for the financial markets in the big picture.
The latest unemployment figures from the US were neither good nor bad and did not cause major fluctuations in the markets.
China
China is struggling with a weak property market, declining growth and weak consumer confidence. This has fuelled fears of deflation in China and generally falling demand for metals.
Last week, iron prices fell to the lowest level in 2 years, mainly due to weak Chinese demand.
Copper
Goldman Sachs has lowered its expectations for the copper price in 2025 from $15,000/t to $10,100/t.
$10,100/t corresponds roughly to the price in 2024.
The $15,000/t estimate was based on an expected global economy with industrial production and construction in full swing, and where the green transition had been turbocharged. None of these scenarios now seem realistic for 2025, and the expectations have been adjusted to a continuation of 2024 instead.
Aluminium
The aluminium price remains relatively strong in an otherwise fading economy.
Demand from China is still good for products for the green transition and renewable energy. In addition, the price of the raw material alumina has increased significantly in recent years. This causes the mills to reduce the production of aluminium slightly, and therefore supply is tight.
Stainless steel
We are looking into a declining market for stainless steel. Activity is sluggish and stocks are a little high.
However, the mills will try to keep prices up.
Sheets/plates
Since Acerinox in Spain opened after a 6-month strike, the pressure on the other European mills has eased. This makes it harder for the mills to maintain prices.
Bars
Just like on plates, we see falling prices on bars – but not to the same extent as with sheets/plates. However, the alloy surcharge is calculated differently, and we do see a fall there.
Several mills are investing in long products in Europe, and this will result in tougher competition in the market in the future.
Nickel
Nickel is still falling, and we will see a dip in the alloy surcharges in October.
Right now, the price is unusually low and has dipped below $16,000/t because global stocks are high.
One reason might be the growing focus on recycling scrap which decreases demand for new raw materials.