Metal Price News - April
The conflict in the Middle East is still the main driver of the metal markets.
The oil and aluminium prices fall with every news story on negotiations and a possible ceasefire and then rise again every time the conflict escalates. We expect this pattern to continue for some time. Meanwhile, the premiums from aluminium and copper smelters have increased by up to 12%.
Macroeconomic developments
The war is affecting oil and gas prices the most, which in turn can affect the global economy. Right now, the focus is split between the physical conflict areas and the effect on inflation worldwide.
If the war ends soon, we still expect a subsequent period of higher commodity prices and higher inflation. We would expect this to lessen demand, so that prices would also start to decrease. But if and when that happens is still impossible to say.
Aluminium
Aluminium is steadily rising as the conflict in the Middle East continues. A plant in the United Arab Emirates declared force majeure for some deliveries on Monday, after the plant was hit by an Iranian drone.
As the peace talks this weekend ended without an agreement, the price rose by about $100/t from Friday to Monday. At the same time, smelters are raising their premiums to absorb the higher energy and freight prices.
The general picture is that the price rises whenever the conflict flares up and falls again when there are talks of a ceasefire.
Copper
Copper moves opposite to aluminium and rises every time there is a chance of peace. This is why the price increased by about 100 €/t when the parties resumed talks this Monday/Tuesday. Unlike aluminium, copper production is not directly affected by the war. The biggest threat to copper is a prolonged war and a sluggish global economy, which would reduce the demand for copper.
Nevertheless, smelters are also raising premiums to cover high energy and freight costs. As a result, the price of copper products can increase even if the market price of the raw metal falls.
Stainless steel
On the whole, stainless steel remains unaffected by the conflict. Prices are rising, but that has more to do with CBAM and the upcoming new safeguard quota. There is still no official plan for the safeguard quota when the current scheme expires in June.
Sheets/plates
It has been interesting to follow the stainless steel market this year. The mills are under pressure, and it has become clear that they were not ready to take over production from Asia when CBAM came into force. Some products are harder to come by than they have been in the past.
Bars
The story is no different for bars; we can see that plants were not ready to take over production from Asia. But the question is whether the European plants even want to compete against Asia in this market, or if they prefer a practical arrangement where Asia supplies standard products and Europe specialises in special qualities.
