United States

COVID has been replaced in the headlines by the Russian invasion of Ukraine, which has caused an already-volatile commodities market to rise to historic levels, with extreme volatility.

US gas prices have been at their highest levels ever (up more than 20% in two weeks) and are adding to the ongoing struggles with inflation, which last came out at 7.9%. These inflation numbers are the highest since 1982 and will likely climb further in the coming months. The Federal Reserve announced a 0.25% increase in its lending rate to try to balance inflation and growth.

The metals markets have seen historic highs and variability. Typically tame commodities, like aluminium, saw 20% swings in value within a few days. The Midwest aluminium premium continues to break its record highs, currently sitting around US$ 875 per tonne and up more than 15% since the previous Mirror; the premium continues to rise on the back of increased freight charges owing to higher fuel costs and lack of capacity.

On the scrap side, mills did not seem to chase the recent price increases as they awaited a reversal towards previous levels. Demand is still good for rolling mills and billet cast houses, with profile spreads stable and some mill grades widening with the improved terminal markets. UBC spreads have seen a tightening as supply seems to be crimped.

On the secondary aluminium ingot end of business, the situation remains a bore. Ingot prices are up slightly, tracking higher input and transportation costs. Owing to continued and deteriorating supply issues around computer chips for cars, secondary ingot makers are less active in the spot scrap markets.

Domestic brass prices are increasing with the terminal markets as scrap supplies are tight. Ingot makers are busy and this is keeping prices elevated. Domestic copper spreads continue to tighten even as terminal markets are at record highs. Demand remains healthy for most copper scrap types, including for exports to Europe and Asia.

Exporters are working through the new qualification regulations into Malaysia which are limiting exports of secondary aluminium. Taiwan and India are picking up the loads that may have gone to Malaysia in the recent past. There has been little change in export logistics, with smaller ports bearing the brunt of the slowdowns.