Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Metals

US dollar safe haven loss may spell more metals price volatility

Commodities | Agriculture | Grains | Energy | Electric Power | LNG | Natural Gas | Oil | Crude Oil | Metals | Coronavirus

Market Movers Americas, June 29-July 3: Rig count rises, but pandemic continues to pressure US commodities

Electric Power

Platts M2MS-Power

Energy | Electric Power | Electric Power Risk

Nodal Trader Conference, 13th Annual

Metals

LME copper price heading back towards pre-pandemic levels

US dollar safe haven loss may spell more metals price volatility

London — The US dollar, typically used for pricing metals, is no longer considered a safe haven for investors and this could mean more price volatility in metals, including scrap, moving forward, a commodities analyst told a scrap metals forum June 3.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The dollar's position has been impacted by the blow the US economy has taken from COVID-19 and negative interest rates, said Eugen Weinberg, head of commodities research at Commerzbank AG, during a webinar organized by Brussels-based International Recycling Bureau (BIR), to discuss the pandemic's impact on non-ferrous scrap metals markets. This could mean there will be less predictability in currency values moving forward, he said.

In the current markets situation "all currencies are weak against tangible goods such as real estate," Weinberg said. "We're likely to see a race against currencies and the dollar is likely to be traded lower going forward."

However, this doesn't necessarily mean that this is a lasting chance for the Euro to become more dominant, the analyst indicated. "The point is the dollar weakness," he said.

ActivTrades analyst Ricardo Evangelista noted earlier on June 3 that the dollar had lost more than 3% to the single currency over the last seven sessions as the markets move more firmly into risk-on territory.

"The euro, one of the most penalized currencies during the darker days of the coronavirus crisis, is now amongst the most buoyant ones, with investors feeling reassured by the gradual reopening for business of the European economies, as well as by the economic and political hopes offered by the European recovery fund," Evangelista said.

COVID-19 RESTRICTING SCRAP SUPPLIES

Non-ferrous scrap supplies have thinned out noticeably in many locations worldwide in recent weeks due to lower industrial activity, transport disruptions and lack of price incentive for collection, BIR members reported.

Shortages have been noted particularly in copper and copper alloy scrap, with available supplies mostly being shipped to Asia.

In the US, "scrap supply is shrinking due to the downturn in manufacturing and serious supply chain issues" said Rick Dobkin of Shapiro Metals, US, noting also that Mexican scrap merchant activity has fallen around 75% from pre-pandemic levels, while Canadian activity has fallen 60%. In the US, sales of the automotive sector, a major scrap generator, slumped 50% in April with little sign of an upturn. However, one brighter spot is that the industry is seeing more onshoring – more parts manufacturing coming back to the US, Dobkin said.

Murat Bayram, of European Metal Recycling Ltd, said that activity levels in the scrap metals industry had fallen throughout Europe during the pandemic. Merchants in Sweden had been able to maintain around 80% of their 2019 trade levels, with other northern European countries maintaining 60%-70% of their trade volumes, with southern European nations typically maintaining 50%-60% of trade volumes, he said.

Dhawal Shah, of Metco Marketing (India) Pvt Ltd, said that scrap volumes traded in India have fallen by 80% from usual levels due to the severe lockdown in the country over the last 10 weeks and that overall, the nation's economy is now expected to decline by up to 5% in fiscal 2020-2021.

In the Middle East, scrap trade volumes have fallen by 80%, while in Africa scrap yards are generally working at 50% capacity, according to Shah.

In China, even though there are now fewer new cases of COVID-19 and most regions are lifting lockdowns, scrap consumption rates continue low and trade flows will be disrupted again if there is a new outbreak, Shen Dong of Omnisource Corporation USA told the meeting.