Copper sees a strong start on its journey upward
The copper market has awakened. Prices are climbing incredibly fast, starting April at $4.05 and opening at $4.29 today.
- March copper averages soared almost 20 cents above February averages.
- We saw three copper wire increases from vendors during March, and we’ve seen two already this month.
- London Metal Exchange copper also surged over 3% in March, breaking out of its long-standing range.
What we’re watching: China’s factory activity grew for the first time in six months, but gains were modest. In mid-March, China’s copper smelters agreed to curb output due to the much tighter-than-expected raw materials market.
Aluminum prices are following copper's lead
The aluminum increase from February is holding in the market, supported by a raw material increase from February to March. While overall demand remains soft compared to 2023, it will be interesting to see what happens if copper prices remain near $4 as we enter construction season.
Why it matters: Whenever copper closes around the $4-per-pound mark, we start to see customers switching to aluminum wire for projects. Aluminum opened at $1.29 today, up 10 cents from the start of April.
In other aluminum news, Century Aluminum is considering sites for a new aluminum smelter that would produce lower emissions, including a preferred location in northeastern Kentucky.
Uncertainty persists over Nippon-U.S. Steel deal
Steel pipe vendors adjusted prices down by roughly 3% for the second month in a row. March also brought news on Nippon Steel’s acquisition of U.S. Steel:
- March 14: President Biden released a statement opposing the deal.
- March 18: News broke that the U.S. Justice Department is looking into the deal over antitrust concerns.
- March 19: Nippon Steel said it would move its headquarters to Pittsburgh, Pennsylvania, if the sale goes through.
Resin and PVC prices edge up as spring begins
Resin averages rose slightly again this month, and PVC suppliers rolled out a 3% increase on April 1. PVC vendors are trying to get small, steady increases with the slight uptick of resin heading into construction season.
Big picture: The PVC market overall continues to stay soft as demand has declined and inventories remain strong, but it could be affected by rising oil prices later this year. Lead times on stock PVC are about four weeks.
What we’re reading: Is Imported PVC Conduit Compliant? and How is PVC Made, Anyway?
News roundup
The market is anxiously awaiting to see if the Federal Reserve will start cutting interest rates at its next meeting, which begins Tuesday, April 30. In non-recessionary environments, rate cuts typically lead to higher commodity prices, particularly for copper and crude oil.
Russian attacks on power plants in Ukraine caused significant damage over the past few weeks, which may have downstream effects on natural gas costs. Ukraine’s largest private energy firm said 80% of its generating capacity was lost, and repairs could take up to 18 months.
The tragic collapse of the Baltimore bridge has not directly affected our core commodity products or shipments, but we are staying in touch with vendors about potential effects.