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This is the Global Economic, Scrap Metal, Commodities and Recycling Report, by BENLEE Roll off Trailers and Open Top Scrap Haulers, November 5th, 2018.
Last week commodity prices and economic reports were mostly mixed.
U.S. steel production rose to a multiyear high as tariffs continue to hurt imports and U.S. steel mills replace the volume, but at about 20% higher prices.
Oil fell about $5 barrel to $62.72 as Saudi Arabia and Russia increased production. The U.S. has granted exemptions to 8 countries to continue to buy Iranian oil, despite the new sanctions that went into effect today. Low oil prices help many U.S. businesses and the consumer.
U.S. oil production rose to match the recent record of 11.2M Barrels a day, as Russia and OPEC increased production as well, therefore helping keep prices and inflation down which is helping the economy.
Iron ore fell 1.00/Ton to $74.50 on a good balance of supply and demand. Global steel production continues to grow slowly so there is solid demand.
Scrap steel #1 Heavy Melt rose about $20/GT which to about $333, which will show next week on this chart. Importantly this is about double the price of two years ago.
Hot roll coiled steel fell $20/Ton on slight weakness to $1,085/ton. Markets remain good not great.
Copper rose 8 cents to $2.81.8 as markets continue to be nervous but optimistic about cutting a trade deal with China. Trade uncertainty is hurting global growth.
The 5-year copper chart shows prices remain in a tight range but are off the lows of the summer.
Aluminum was almost no change at ce89.1 cents, remaining near a one year low on nervous global markets and China trade concerns.
September’s U.S. Balance of Trade was the worst in 7 months and is near the worst in a decade. Despite all the noise, the trade imbalance with China just set a new all-time record. We imported more capital and consumer goods and exports of food and vehicles fell. Many due not know, Mercedes and BMW make vehicles in here in the U.S. that are exported to China, but are now being hit by China tariffs on U.S. goods, even though they are from German companies making them here.
China’s October Caixin Manufacturing index was little change at 50.1 percent. Over 50 is growth, so this shows China’s manufacturing is growing at a very slow level. Export sales fell for the seventh straight month and employment fell. These numbers will keep downward pressure on commodity prices.
October’s U.S. IHS Manufacturing index was revised down, but remains a very solid 55.7, with the strongest increase in factory growth in 5 months, boosted by new orders from domestic sources, with exports showing the weakest growth in three months.
October’s Unemployment remained steady at 3.7%, the multi-decade low it hit in September, which is really great news.
October non-farm payrolls increased a strong 250,000, which is great news. The U.S. is at or near full employment, so this is actually down from the year 2015 highs when we were growing faster.
October’s labor force participation rate rose to 62.9%, which means that of all people that are over 16 years of age that can work, 62.9% are working, meaning 37.1% are not working. To keep wage inflation down, we need to get more of these people off welfare and early retirement and back to work.
October’s U.S. Consumer confidence hit an 18 year high. Really great news. Much of the news remains very, very good, but we are sorry to be the grim reaper, as we continue to say, this good news is based on the Government borrowing more and more money at a faster rate.
Wall Street’s Dow Jones Industrial rose a nice 583 points 25,271, but still remains well down from the recent highs, as higher interest rates continue to take their toll.
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