This is the Global Economic, Scrap Metal, Commodities and Recycling Report, by BENLEE Roll off Trailers and Open Top Scrap Haulers, August 27th, 2018.
Last week commodity prices and economic reports were mostly mixed.
U.S steel production rose, to a new multi-year high as tariffs remain reducing finished steel imports into the U.S. and the global economy remains in a slow growth mode.
Oil rose about $3/barrel to $68.72 as global demand and supply remains balanced.
U.S. oil production rose to 11.00 Million barrels a day, matching the all-time record high from a few weeks ago. Great U.S. technology is bringing oil up at lower costs.
Iron ore fell 50 cents ending at $67.00/Ton on little news and a good balance of supply and demand.
Scrap steel #1 Heavy Melt remained steady at about $322/GT, with all indications we could be down $10++/GT in August as scrap flows into scrap yards remains fair, despite slightly lower prices. Remember, prices remain more than double 2.5 years ago.
Hot dipped galvanized steel fell $25/ton to $1,145/Ton, remaining near the multiyear high, on a good balance of supply and demand.
The spread between hot rolled coil and prime industrial scrap, as measured by the price difference between their corresponding futures contracts, ended at $490 for the week, levels not seen since the fourth quarter of 2008. A great thing for steel mills and a sign that scrap remains plentiful.
Copper rose 3 cents to $2.69/lb., after having hit a new annual low two weeks ago. Markets remain concerned about parts of the global economy and tariffs. Copper is up about a penny this morning to $2.699.
The 5-year chart shows prices remain near 1-year lows on economic and tariff concerns.
Copper inventories rose, after coming off a multi month low, on all the continued noise.
Aluminum rose about 3 cents to 93.6 cents, off the recent 5 months low on tariff and market concerns.
Aluminum LME inventories fell, approaching new 8-year lows on market concerns, yet OK demand.
Added tariffs kicked in between China and the U.S. China added a new 25% tariff on all recyclables going into China. ISRI says this is on top of earlier tariffs, meaning there is a 50% tariff on all aluminum scrap into China.
July’s U.S. New Single-Family home sales shank 1.7% from June to an annual rate of 627,000, the lowest in 9 months, with sales falling in the Northeast and South. High interest rates and high prices are hurting sales. On this 55-year chart, you can see we are at levels from about 1962, so there remains major upside.
August’s U.S. Manufacturing Purchasing’s Manger Index fell to 54.5 a 9 month low. Still growth, but at a slower rate of increase. Lead times increased, due to truck driver shortages and it was reported as we know, imported tariffs on metals increased costs, but overall input inflation eased.
About 2/3rds of the U.S. economy is driven by the consumer. In an interview on CNBC, the CEO of Target Stores said “I’ve been doing this for a long time. I think this is the healthiest environment I’ve ever seen”. Great economic news helped by 9+ years of growth, a nice recent tax cut, but supported by increased Federal and State Deficits. It’s easy to have a good economy when it is supported by an increasing amount of borrowed money.
Wall Street’s Dow Jones Industrial Average rose 121 points to 25,790 as markets remain in the belief that all will be OK with tariffs and news effecting the President.
A quick mention to an Industry friend Mike Moran, who was one of the God Fathers of our best selling trailer the Super Mini, our roll off truck replacement trailer. We hope your recovery remains going well.