Household name of daily necessities supplier Procter & Gamble (P&G) and beverage company Coca-Cola recently forecast price increases, meaning that the global consumer purse is bound to shrink, “all things rise” inflationary storm immediately become a financial market hot topic, promoting a number of raw material prices increased, coupled with high freight costs, can be described as adding insult to injury.
Consumer goods scraped up the price storm, how can a hundred things tens of expensive “the first consumer” car. The market is betting that the economic recovery will stimulate demand for the precious metal palladium from automakers, exacerbating the supply shortage, spot palladium had risen 4.8% on Wednesday to a high of $2,895.96 per ounce, breaking through the last historical top set in February 2020 and writing a new record. Spot palladium softened on Thursday but is still up nearly 17 percent so far this year.
Palladium is widely used in catalytic converters that reduce vehicle emissions, and production shortfalls have persisted for several years, with auto heavyweights Europe and China stirring up demand for the metal from automakers as strict pollution standards are implemented. Supply doubts are also being fueled by production disruptions at MMC Norilsk Nickel’s mine in Russia, the world’s largest palladium producer.
Tai Wong, head of metals derivatives at BMO Capital Markets, said a number of factors are driving up the price of palladium. In addition to the shortage of supply in the palladium market this year, the need to rebuild inventories in the second half of the year and next year by automakers who need to cut production due to a shortage of chips, are favorable to palladium demand and price prospects.
Another precious metal, gold, has been weaker recently, with spot gold falling 0.31% to a low of $1,787.2 per ounce on Thursday, but TheTechnicalTraders.com market strategist Chris Vermeulen pointed out from technical analysis that gold prices are bottoming out, with the 200-day and 50-day moving averages showing a breakout at $1. 850, The breakout level is at $1,850, and once it penetrates, it will soon rise to $1,960. However, he reiterated that it is impossible to determine whether gold prices have turned upward before the above breakout level is penetrated, and the trend of the past few months shows that gold prices are still in a bear market.
Speaking of a number of resources, oil prices can be said to be the only haggard. Due to concerns about the global epidemic repeatedly hit demand, coupled with the unexpected increase in U.S. crude oil inventories last week, oil prices fell for three days in a row, New York futures oil after Wednesday fell 1.75%, Thursday fell 1.18% to a low of $ 60.62 per barrel; Brent futures oil Thursday also fell 1.11% to a low of $ 64.59. However, a state-run oil company in Libya will cut production by up to 100,000 barrels a day this week due to a lack of funds, potentially affecting the supply of the Organization of the Petroleum Exporting Countries (OPEC) member.
Demand increases and capacity limits steel and aluminum prices are difficult to see the top
In the commodity market, gold, silver, palladium and platinum have always been classified as “precious metals”, while others are collectively called “base metals”, but the current prices are by no means cheap! With the restart of global economic activity, traditional industries are increasing demand, driving China’s recent increase in crude steel production capacity, but Brazil’s Vale and Australia’s Rio Tinto and other miners production is not as expected, stimulating international iron ore prices rose to nearly $ 188 per ton, a 10-year high.
Daniel Hynes, commodity strategist at Australia and New Zealand Bank, said that given the relatively tight supply in the current market, any failure of miners’ output to meet forecasts will have a relatively positive impact on prices. Indeed, Rio Tinto has warned that its full-year production forecast of 340 million tons will be challenged by logistical risks to its mine and port operations in northern Western Australia, which were also affected by a tropical storm in April.
More importantly, the rise in raw material prices coincided with pledges by the Chinese authorities and the local steel industry to cut production, sending mainland steel futures higher on the back of strong demand. Shanghai rebar futures rose to the highest since trading began in 2009, while hot-rolled steel coils are near their highest level since 2014.
Meanwhile, aluminum futures in London rose 2.4% on Wednesday to close at $2,364.5 a tonne, the highest since May 2018, amid speculation that China will limit aluminum supply to reduce carbon emissions.
China is likely to make a statement on its efforts to reduce emissions at a global climate summit organized by U.S. President Joe Biden as the issue of climate change raises global concerns. China’s commitment to reduce emissions has already constrained a decade-long expansion of the aluminum industry, with significant implications for global markets. The potential reduction in aluminum supply comes at a time when auto sales are increasing and key indicators of Chinese consumption and industrial activity are picking up, meaning that demand for the commodity will be stimulated as the economy continues to recover.
Copper foil fears 3-year shortage of electronics prices easy to rise, hard to fall
With the advent of the smart era, 5G, the Internet of Things (IoT) and the electric vehicle industry have taken off rapidly, causing a surge in demand for the emerging resource “copper foil”, which is in serious short supply, with delivery periods being extended and prices rising. Before the new copper foil capacity is in place, there is a chance that oversupply will become the norm in the next 2 to 3 years, meaning that the prices of a host of electronic products will be difficult to reduce.
Copper foil is the most important raw material in the manufacturing of copper-clad substrates (CCL), printed circuit boards (PCB) and lithium batteries, the stability of copper foil will affect the electronic signal and power transmission efficiency. From the process point of view, copper foil can be divided into “electrolytic copper foil” and “calendered copper foil”, while electrolytic copper foil can be divided into lithium copper foil for lithium batteries and standard copper foil for PCB industry according to the application.
In the copper foil quotation, part of the price reflects the international copper price, while the processing fee is related to supply and demand. The international copper price has gone from a low of about US$4,600 per ton in March last year to a breakthrough of US$9,300 in February this year, and is currently hovering in the range of US$8,700 to US$9,150, an increase of more than 85%. As for processing fees, generally quoted in bulk specifications, from last year’s low to March this year, the increase was about 30 to 40%, while electronic copper foil than lithium copper foil rose more, mainly because the “house economy” demand continued, coupled with the recovery of the car market led to higher copper foil usage.
Benefit from the world’s countries continue to launch policies to support the development of electric vehicles, and tighten the carbon dioxide emissions standards, according to research institutions IHS estimates, this year’s electric vehicle battery market size will be a significant increase of 80% compared to last year, will naturally also drive the demand for lithium copper foil. How many quarts of copper foil prices have risen? Some industry insiders describe the supply chain of copper foil in China, which has always been the most sensitive to market supply and demand, as “three prices a day”, which is not exaggerated.
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