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Global Economic, Scrap Metal, Commodities and Recycling Report

December 10, 2018

This is the Global Economic, Scrap Metal, Commodities and Recycling Report, by BENLEE Roll off Trailers and Lugger Trucks, December 10th, 2018.

Last week commodity prices were mixed and economic reports were mostly negative as multiple industries reported slowing.

weekly tonnage of raw steel production

U.S. steel production fell again as the housing and automotive sectors continue slowing as higher interest rates hurt sales and the trade war has people nervous.

Crude Oil

Oil rose about $2.50/barrel to $53.40 as OPEC teamed with Russia to cut oil production 1.3M barrels a day lowering supply, which will increase prices. Higher prices are great for oil companies and many industries, but bad for the consumer.

US Field Production of Crude Oil

U.S. oil production remained steady, at 11.7M barrels a day, the record hit a few weeks ago. With increasing prices, this level could continue to increase.

Iron Ore

Iron ore rose $2/ton to $67 as global slowing continues and there are few major positive and some negative factors in the steel markets.

AMM Weekly Heavy Melt Price

Scrap steel #1 HMS remained at $333/GT, while some markets saw prices down about $10/GT. Exports are showing some weakness, so it is not clear what will happen in January.

Hot Roll Coil Steel

Hot roll coiled steel remained at $1085, near the multi-year high, as tariffs support higher prices, but with some markets slowing, prices could decline.

Copper

Copper fell 4 cents to $2.75 as markets reacted to negative tariff news and the global economic slowdown, especially in China. Copper is down about a penny this morning.

5 Year Copper

The 5-year copper chart shows prices remain in a range for about the past 6 months. Almost daily there are good stories, then bad stories, so prices go up and then down.

Aluminum

Aluminum was up about a penny to 88.9 cents, remaining near the one year low on global slowing and nervous markets.

US Total Vehicle Sales

November’s U.S. Vehicle sales slowed to an annualized 17.49M, frankly a high number, as large SUVs and trucks continue to replace cars, which is causing a disruption in the industry.

Class 8 Trucks

November’s U.S. Class 8 truck (large tractor trailers), saw their orders drop 36% from October and were 15% below last year. This was the lowest order rate since September 2017.

US Non Farm Payroll

November’s Jobs report, which is new non-farm payrolls was lower than expected at 155,000, with healthcare, manufacturing and transportation adding the most jobs. The average work week fell a bit to 34.4 hours and the average payroll increased 3.1%.

US Unemployment

The 155,000 new jobs had the unemployment rate stay at a 49 year low of 3.7%, a very good number for the overall U.S. economy.

Labor Participation Rate

A positive and a negative is that only 62.9% of people 16 years of age and older, that can work, are working. This means 30.1% are not working. We need to get many of these people back into the workforce.

US Trade Deficit

November’s U.S. Trade deficit was the worst in 10 years led by the dramatic lower U.S. sales of soybeans to China and the good U.S. economy had us buying imports at a new record. Related, our trade deficit with China hit a record as they blocked our shipments with tariffs and we continue to buy much of their products despite the 10-25% tariffs we are now paying. There was also a rush to get Chinese products to the U.S., before increased tariffs that were due January 1st, but are now off for 90 days. U.S. purchases of oil from OPEC also rose.

US Consumer Confidence

December’s Consumer confidence was steady at 97.5 and has now been above 90 for two years which it has not done since 1997 through the year 2000. High confidence is mostly based on positive job and wage prospects.

Dow Jones

Wall Street’s Dow Jones fell a huge 1,165 points as the monthly job report was slower than expected and as President Trump tweeted “I am a tariff man”, which is hurting ending the damaging trade war.

As always, feel free to call or email me with any questions and we hope all have a Safe and Profitable week.