• Weekly Market Report

Commodity Market Developments

Ferrous: Last week, the American Iron and Steel Institute reported that for “the week ending on May 23, 2020, domestic raw steel production was 1,191,000 net tons while the capability utilization rate was 53.2 percent.
  • Production was 1,880,000 net tons in the week ending May 23, 2019 while the capability utilization then was 80.8 percent. The current week production represents a 36.6 percent decrease from the same period in the previous year.”
  • AISI also reported last week that “…through the first four months of 2020, total and finished {U.S.} steel imports are 9,185,000 and 5,819,000 net tons (NT), down 20.3% and 28.2%, respectively, vs. the same period in 2019.” Here’s the import breakdown by steel mill product:

  • Looking ahead to June scrap trading, our friends at Argus Media report that “Lingering supply tightness, higher finished steel prices and sustained gains in the export market are widely expected to counter weaker demand levels and lift at least some prices higher in the June US domestic ferrous scrap trade… Market participants surveyed by Argus this week expect the June trade to be a milder version of May with primes increasing $10-30/gt and obsolete grades sideways-to-up $10/gt as supply-demand imbalances slowly work toward reaching a post-Covid-19 outbreak equilibrium.”
  • Last but not least, Macquarie reports that “Iron ore prices surged {on Friday} on news of potential mine shutdowns in Brazil due to the spread of COVID-19. Local Brazilian media reported that a labor prosecutor in the State of Minas Gerais filed a public action demanding the closure of Vale’s Itabira mining complex after more than 10% of the workforce tested positive for COVID-19.” China’s year-to-date iron ore imports were up 5% as compared to Jan-Apr 2019.
  • Nonferrous
    COMEX copper futures traded from as low as $2.3585 per pound early last week to as high as $2.4585 on Friday.

  • Macquarie reported last Friday that “LME copper stocks saw another big day of cancellations yesterday (reported this morning showed) with latest data showing Busan cancelled warrants now up to 63.65kt from 32.7kt two days ago and just 8.5kt on 20th May. Total LME stocks continue to creep lower after the big inflow on 14th May, with just under 3kt leaving to fall to 261.8kt in the registry. Pretty much all the movement is happening in Asia, with Kaohsiung also showing 21.2kt of cancelled warrant up from just 100t on 20th May. Meanwhile, the weekly SHFE stocks print showed copper inventories falling another 30.8kt to just under 145kt.”
  • Copper bulls are looking for a replay of the China-induced rebound in red metal prices following the last recession. But Andy Home at Reuters reports that “Although Beijing’s latest stimulus package ticks a lot of copper boxes, there will be no liquidity flood and construction boom such as seen a decade ago. Then there is the problem of what China is going to do with all the copper-containing products, such as air-conditioners and white goods, it normally exports… Weak exports are the point of maximum weakness for China’s copper sector, although it could take several months before a build in product inventories works its way back up the value chain to the refined metal segment.”
  • Fastmarkets AMM was recently listing Brass Ingot Maker copper scrap prices at 234-236 for Bare Bright, 227-229 for No. 1 copper, 212-214 for No. 2 copper, and light copper at 207-209 cents/lb.
  • Thanks very much to everyone who participated at our virtual ISRI Aluminum Spotlight last week, especially moderator Stephen Moss from Stanton A. Moss, Inc. and speakers Jason Schenker from Prestige Economics and John Woehlke from JW Metal Consulting. The recording of that event is now available. 

Paper and Plastics

  • You won’t want to miss this week’s ISRI Virtual Event: Spotlight on Paper hosted by PSI and ISRI on Wednesday, June 3, 2020 2:00 p.m. ET. This year’s Paper Spotlight will provide valuable insights for paper processors, MRF operators, and mills on how shifts in consumer habits will change our relationship with paper and packaging. Attendees will gain a strong understanding of both the short and longer term outlooks for the sector from Jose Gonzalez and Sanna Sosa of AFRY Management Consulting, a leading advisor to the world's energy, forest, and bio-based industries. This will include a deep dive into the effects we have already seen on selected pulp and paper sectors during the COVID-19 pandemic and its impact on selected industry sectors.
  • And market your calendars for next week’s ISRI Virtual Event: Spotlight on Plastics to be held on June 11, 2020 from 1:00-2:30 PM Eastern. The global plastics and petrochemical markets continue to be negatively impacted by the productivity and economic downturn caused by COVID-19, especially in the oil & gas sector, but also the continued public attention on plastic consumption and concerns raised in various international forums about EOL plastic trade. Please join us for a two-panel virtual event: experts providing an outlook on the primary plastic and plastic scrap markets followed by U.S. Government officials briefing on compliance requirements for the Basel Convention’s new plastic scrap trade regime that will be implemented in 2021.
  • You must register online to participate. There is no charge for ISRI members for these events. Once you register, you will receive an email with login instructions. Make sure to save the information in your calendar.

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