Commodity Update

Federal Reserve rate cuts could lead to increased metal prices later this year.

The Commodity Update
Get the latest news on what’s affecting the price of copper, aluminum, steel and PVC. Sign up to get an email update once a month.

Fill out my online form.

Commodity Trends

Commodity price changes from October 2023 to October 2024

Commodity Difference
Copper
22%
Aluminum
15%
3/4-inch Steel
-15%
4-inch PVC
-43%

Copper demand revives old mines

Global demand for copper remains strong as the focus on clean energy technologies, electric vehicles and AI has companies working to revive once abandoned copper mines.

Why it matters: The growing demand is creating pressure to increase supply. Demand is predicted to exceed supply by 1.7% in 2035. Revitalizing old mines is quicker and less expensive than building new ones. 

In other news: The Federal Reserve (Fed) cut interest rates again by a quarter point during their November meeting, strengthening copper’s value. When the dollar weakens, metal prices typically rise. Today, copper opened at $4.26.

Aluminum prices surge

Today, aluminum opened at $1.42. Aluminum prices surged over 20% in October, edging toward record highs due to production issues with alumina, a crucial raw material refined from bauxite and smelted into aluminum.

Why it’s happening: Guinea, a global supplier of bauxite, suspended shipments from a major producer due to a dispute with government custom officials, further tightening the market. Meanwhile, alumina and bauxite exports are slowing in Australia due to restricted environmental laws and shortage of natural gas supply, which has led major refineries to cut shipments.

The big picture: China in particular is feeling the impacts of tight supply, as they heavily rely on imports, and as China’s demand for alumina increases, it further amplifies the pressure on prices. Rising alumina costs are also driving up aluminum smelter expenses. Since smelters require two tons of alumina for every ton of refined aluminum, they may need to increase ingot prices to maintain profit margins. If they cannot, some smelters might reduce production or even shut down, which, in turn, can limit supply and push prices higher.

Steel pipe market sees uptick

Steel pipe suppliers pushed a slight increase from September to October, but it hasn’t affected the year-over-year decline.

Why it matters: The market may see further price increases as suppliers enter the maintenance season, which temporarily reduces supply and limits availability.

PVC market is in slow decline

PVC suppliers anticipate a continued decline in the coming months, though at a slower rate than earlier this year. This decline is driven by the waning demand with the end of the construction season.

Why it matters: Suppliers expect the market to bottom out by year-end, followed by stability or slight growth.

News roundup

The Fed cut interest rates by a quarter point for a second time this year at their November meeting. The Open Market Committee’s next meeting is Tuesday–Wednesday, December 17–18.

Border States is introducing a new newsletter, The Compass, designed to help you navigate the challenges of the global supply chain. Coming January 2025!

The Commodity Update
Get the latest news on what’s affecting the price of copper, aluminum, steel and PVC. Sign up to get an email update once a month.

Disclaimer: Our information is compiled from several sources that, to the best of our knowledge and belief, are accurate and correct. Border States accepts no liability or responsibility for the information published herein. These materials are provided for informational use only and do not, nor are they intended to, constitute legal advice.

The links contained on this webpage are provided for your convenience only. While we try to include only links to or frames of those sites which are in good taste and safe, we are not responsible for the content of third-party sites and cannot guarantee that sites will not change without our knowledge, and inclusion of such links and frames on this webpage does not imply Border States’ endorsement of the linked or framed sites or their content. If you decide to access any of the third-party websites linked to in this email, you do so entirely at your own risk and subject to the terms and conditions of use for such websites.