Copper Jumping, Higher Prices for First Half of 2022 – 1/12/22

HOLD OR SELL NON-FERROUS
HOLD OR SELL FERROUS

Whoop, There It Is!

With the copper markets giving us a great surprise this morning with a $0.10 per pound jump, we are hoping you are ready to cash in. The needs have been on a tear, with copper prices trading over $4.00 per pound for over one year. What does that mean for the rest of the year? Well, that is out to be seen as we watch these markets and have to assume that at one point something has to give. In the meantime, we are hoping to see this push extend further but we are looking at a few influential things that will affect things.

Like market swings? No one does unless they only swing up! These markets are a large cause for concern from traders and manufacturers. As these continue their upward trends you will start to see market-moving events that may not tickle your fancy. What do you ask? According to so many analysts, gas, oil, materials, groceries, goods, products, cars, and home prices will continue to increase for all of the first half of 2022. This will lead to sustained metal prices but will have big market impacts as well. 

Non-Ferrous Prices & Market Status

  • Copper – SELL

  • Aluminum – SELL

  • Brass – SELL

  • Copper Wire –  SELL

  • Stainless Steel – HOLD 

Copper jumping generally leads to our SELL indicators going up on wire, copper, and brass items. This is nothing new or different as we have seen these crazy $0.10 – $0.20 price swings regularly over the last year and a half. These markets look to remain hot as products are not moving in or out of mills or overseas shipping containers fast enough. This is leading to a lot of people liquidating their warehouses- but at the same time is leading to more shipping and processing problems than we have seen in years. 
 
These higher prices are great for the cash-in point at the yard but what we have seen is a lot of people moving into high margins (aka higher per pound profits) to offset the fuel, labor, and other ancillary business costs that continue to go up. 

Non-Ferrous Price Chart of the Week

 

Ferrous Prices & Market Status

  • #1 Steel – HOLD

  • Shreddable Steel – SELL

  • Light Iron – SELL

  • Cast Iron – HOLD 

  • Complete Car –  SELL

Steel scrap prices have continued to weaken (no surprise here as oil continues to strengthen) over the beginning of 2022. With the markets going into a bit of a downward spiral, we implore you to remember a short year ago where we saw $50 – 100 per ton price swings both down and up. These markets continue to be unstable even if the demand for raw commodities and recycled material increases.

For the rest of the first quarter of 2022, we will not be surprised to see a shine from the non-ferrous side of the pond but a decrease on the ferrous island. 

Ferrous Price Chart of the Week

Other Metal Markets

Quietly the nickel and stainless markets have started to have signs of life. We have seen these markets get pushed up with many scrap yards increasing their prices by about $0.07 per pound in the last six weeks on the stainless 304 side of things (we highlight this because it is the most common grade of stainless scrapped each day). 

Catalytic Converter Prices & Market Status

  • Catalytic Converters – SELL

With prices recovering to the levels we saw back in early November, we are happy to see this increase. We did talk about the markets increasing during the first quarter of 2022 as auto manufacturers strengthen their supply chains (which is happening quickly). These supply-chain issues being resolved will lead to much quicker integrations with technology and sending cars out into the markets. 

Now that the supply chains are beginning to be resolved, the demand for precious metals and the increase in density in the catalytic converter market will prove to have an increased price push for the first quarter. These price pushes will and should extend as the winter finishes, and outside supply issues disappear. 

Thank You.

The markets are strong, and the demand for metals is worldwide. As the pandemic world slowly disappears and the endemic kicks in, we expect to see more demand for metals worldwide as the economies around the globe try to shake off a strange couple of years. 

– Tom

 


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