Market demand remains high. The price of industrial metals continues to hit multi-year highs. Which one will back down first?

As the price of other commodities, namely lumber, begin to fall off from recent highs, the question remains whether metal will join the party before the end of 2021.

In the July episode of Cup o’ Joe, Nick Webb, Ryerson’s Director of Risk Management, Commodities Hedging, gave us his take on this topic from a few different angles. Below are the highlights.

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Demand Remains Strong, But at a Lower Clip

Looking at PMI (purchasing managers’ index) data for both the U.S. and China, we see that market demand does indeed remain strong, albeit at slightly lower rates than previous months. This, coupled with some other key macro data, could paint a picture for where steel prices are headed in the coming months.

And how have copper movements led or lagged carbon steel price movements?

Steel and Lumber: A Deviation in Price

Over the past few months, lumber prices reached new highs, alongside carbon steel. However, that trend has reversed for lumber, yet not for steel. Webb lends some opinions as to why this could be the case, and what it means going forward.

Containers are the New Gold

Imports play a big part in supply-demand fundamentals—with the U.S. importing a fair amount of steel on an annual basis. But these days, obtaining a container to ship product from Shanghai to Los Angeles has become akin to “finding gold”.

The Russian Impact on Aluminum 

There is word that Russia is considering an export tax on aluminum. This could be significant as Russia accounts for roughly 20% of the world’s production of aluminum. What impact could it have on the Midwest Premium, and ultimately your cost to get material?

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