Metallprisnyheter Augusti
The markets have been less volatile over the summer. But Donald Trump has not taken any time off: He has announced new tariffs on copper, peace negotiations with Russia and trade agreements with the EU, Japan and South Korea, among others.
Macroeconomic developments
On Friday, Putin and Trump met to discuss Ukraine. Analysts did not expect much from the meeting, and they were right.
However, on Monday, Trump met with Ukraine, the EU and NATO, and that did bring some positive news: There are now real plans for peace talks between Putin and Zelensky. The markets are reacting with cautious optimism, but also with a great deal of uncertainty about the road from here. Stock markets are rising slightly, while commodity markets are falling with the prospect of Russian commodities entering the markets again.
United States
The economic indicators from the US show mixed trends. Consumer prices are as expected, but producer prices have risen more than expected. This could be a sign that Trump's tariffs are starting to put pressure on manufacturers by making purchasing more expensive. If the rising producer prices are passed on to consumer prices, this could cause inflation to rise.
At the same time, Trump wants to lower the Fed’s interest rate – a move that would also push inflation upwards. It seems that the central bank may cut interest rates 0.25-0.50% in September, well below Trump's 1-3% wish.
There is also a strong focus on the domestic supply of rare minerals. Most recently, a USD 1 billion government program has been established for the expansion of mines and the production of rare minerals in the US.
China
In China, not much has changed since spring: The economy is sluggish and real estate sales are at a standstill. Rumour has is that another stimulus package is underway from the Chinese government.
The tariff agreement with the United States has once again been postponed by 90 days.
Europe
The EU has reached a trade agreement with Donald Trump, but the agreement has not yet been signed and could still change. Changes related to the automotive industry and copper tariffs are rumoured.
Currency
Analysts disagree on the direction of the USD in the next 12 months. Some believe that rising economic activity and inflation in the US will drive EUR/USD up to 110, while others believe that slowing growth and forced interest rate cuts in the US could send the dollar downwards to EUR/USD 125 – given that economic growth in Europe picks up.
Commodities
The commodity prices are gradually gaining indepence across the board. There used to be a strong correlation between oil, copper and aluminium, but now the prices are moving in different directions due to sanctions, tariffs and other external factors for each commodity.
If you have previously used the price of one commodity to predict the price of another commodity, note that this is now a less certain indicator.
Copper
In July, Trump announced a 50% tariff on copper imports into the US. This caused a stir in the market, but in the end the tariffs only applied to semi-finished products. Other copper products – including copper components in cars – will not be affected by the tariffs.
From an outside perspective, the logic behind the new tariffs is elusive. The US is a net importer of copper, while the rest of the world is a net exporter. Because of this dynamic, the only immediate effect of the tariffs is that it will be more expensive for American companies to buy copper.
To make matters worse, the global supply of copper is down at the moment because a fatal accident in El Teniente, one of the world's largest underground mines, has limited production.
Aluminium
The global stock situation is improving at the moment; aluminium stocks are expected to double before 2026 compared to the current level. If that happens, prices are likely to go down towards the end of the year.
Stainless steel
As we mentioned in June, several European pharma projects are on hold right now, and prices are under pressure.
Sheets/plates
The alloy surcharge is fairly stable with a slight increase in September. However, we expect the overall price to take a small dip right now and then increase a little bit in October and November, because the mills simply cannot push prices further down.
Bars
The alloy surcharge will increase by 1% on 4304 and 2% on 4404 in September, and we expect prices to do the same.
Nickel
The price is still above $15,000/t, where it has been for most of the year. This is a low level in a historical context, but the price is very stable.
Molybdenum
Molybdenum is going up at the moment, which is why the alloy surcharge for 4404 is increasing.
