Copper's future hangs at the hinges
Copper opened at $4.07 this morning.
Toward the end of August, copper was hovering around the Comex $4.20 mark when a 5% increase was announced. However, the future of copper depends on whether China’s slowing demand continues to drive down prices or if potential Federal Reserve (Fed) interest rate cuts could provide relief.
Why it matters: Copper could see a boost if the Fed cuts rates in September, as the commodity would benefit from a weaker U.S. dollar. However, the market will closely watch China to see if demand continues to soften.
- Goldman Sachs lowered its price forecast due to China’s “softer-than-expected” demand.
- Experts are making projections for copper prices in the last quarter of 2024 and the first half of 2025.
What we’re watching: Industrias Penoles announced an indefinite suspension of its operations at its Minera Tizapa mine in Mexico.
Aluminum outperforms copper
Aluminum wire prices climbed due to higher costs for additive ingredients, strong demand in China and supply chain fluctuations.
Yes, but: Many experts believe aluminum’s outperformance over copper won’t last, primarily because of improving market signals favoring copper.
- Sustainability and cost concerns loom over the global uptick in aluminum usage because it requires much more energy to produce than copper.
- Today, the price of aluminum opened at $1.26.
Steel's future in a state of limbo
Steel pipe prices rose 10% in early September, with half of suppliers supporting the increase. It is to be determined how much of the increase sticks in the market.
More steel news:
- U.S. Steel’s CEO warns if the sale with Nippon Steel falls through, the company might close its Pittsburgh mill and shift production to its Arkansas mill, which produces steel from melting scrap, a more cost-efficient process than using iron ore at the Pittsburgh facility. The sale is under two separate reviews by federal agency committees. Both presidential candidates, the Biden administration and the steel union oppose the sale, advocating for domestic steel.
- The final determination on the Section 301 tariffs is still delayed as the Office of the U.S. Trade Representative continues to develop a decision on proposed modifications. We will continue to watch for updates.
PVC remains steady with available inventory
Lead times remain steady with good inventories available.
News roundup
The Fed is ready to cut interest rates, but it is unknown when cuts will occur, or by how much. The Open Market Committee meets Tuesday–Wednesday, September 17–18.