This is the Global Economic, Scrap Metal, Commodities and Recycling Report, by BENLEE Roll off Trailers and Lugger Trucks, October 22, 2018. This is a special remote edition with Ron Ostrowski reporting due to Greg’s travel schedule.
Last week commodity prices and economic reports were mostly mixed.
U.S. steel production rose to a Multi-year high as tariffs support good U.S. demand and the global economy remains in a slow growth mode.
Oil fell about $2/barrel to $69.37 as markets remain concerned about slowing global growth and increased U.S. production.
U.S. weekly oil production fell to 10.9M Barrels a day, remaining near the11.2M record. The world and the U.S. still needs OPEC oil. This means tough sanctions against Saudi Arabia for the killing of the Washington Post Columnist from Virginia, are not possible, without causing a huge increase in oil prices, which Saudi Arabia has threatened.
Iron ore rose $3.30/Ton to $73.50 on news that China had a great increase in steel production in September.
Scrap steel #1 Heavy Melt remained at $313/GT on good demand and as global markets remain in balance for scrap metal.
Hot dipped galvanized steel remained at $1,105/Ton down from the recent high. Lower Automotive and Housing is putting downward pressure on prices.
Copper fell 2 cents to 2.78/lb. with tariffs creating global economic nervousness and as China continues great growth, but at a slower rate. Copper is up 3 cents this morning to $2.81.
The 5-year copper chart shows prices in a tight range in recent weeks, below the recent high.
Aluminum fell 1.4 cents to 90.6 cents near a multi month low, on nervous markets.
Nucor is investing $200M to upgrade their DRI, Direct Reduction Iron, Louisiana facility. This is their scrap metal substitute plant that uses iron ore to produce the scrap metal substitute. This puts downward pressure on scrap metal prices and keeps Nucor as competitive as possible down markets.
India’s JSW Steel, announced it will build a new electric arc furnace plant in Texas, that consumes scrap metal and DRI, supporting higher scrap steel prices. They also announced they may follow Nucor and build a DRI manufacturing plant, offsetting much or all of upward pressure on scrap.
China’s 3rd quarter growth was a strong 6.5%. While about double the growth of the U.S. it was the lowest growth since early 2009 during the financial crisis. Tariff disputes and what some consider alarming borrowings by local governments are a concern.
U.S. Tax cuts are bringing the faster economic growth as promised which is great, but with large spending increases by the government, and lower tax rates, Government debt in the year ending September was the highest in 6 years. It is easy to have a great economy when we and the government spend money that the government is borrowing in larger and larger amounts. The President did just announce he wants a 5% cut from all areas of government.
U.S. September Housing starts fell 5.3% from August to an annualized rate of 1.2M, back to levels from 2015. Hurricane Florence and higher interest rates were key reasons.
August’s U.S. job openings hit a record of 7.4M, with the increase driven by 15,000 new federal government job openings. The economy remains strong.
Wall Street’s Dow Jones Industrial average rose 144 points to 25,444, as markets remain nervous about tariffs, oil prices, interest rates and more.
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