State of the Metals Market, 7/2021

Found floating around the internet recently… sounds right from everything I’ve heard.

Good thing nothing needs metal!

I know prices are up and things have been bad, didn’t realize they were quite THIS bad. And most of that affects EVERYTHING. Especially the drivers and ports. And here I thought the US lumber market had gotten crazy.

Pretty hard to keep industry going when raw material is so unaffordable or unavailable. I’m not going to say this is the ‘new normal’ because it won’t stay this way. Either things improve (at least a bit), or these markets keep declining until they die.

While I also believe the scarcity issues are transitory, I am not convinced that all of the inflation is. A reasonable person might consider the deficit spending of 2020 to be both necessary and unusual; but last year’s pre-crisis deficit was in excess of $1 trillion, and this year’s deficit is more than $2 trillion despite being essentially post-crisis. CBO is projecting an average deficit of 3.9% out to 2030, and CBO projections reliably understate the deficit/debt. The Jan 2010 projection for the 2019 deficit was $649bn; the actual was $984bn.

Don’t rule out the possibility of war. I am of the view that the root cause of war is largely excess demand for limited resources, and war serves as a way to reduce that demand … through the obvious mechanism. Modern man may not necessarily consciously think, “I’m going to go kill those people to get mine,” but scarcity creates angst, and unresolved angst leads to conflict, and conflict breeds war, and war quite brutally solves the excess demand problem. While scarcity may not be the proximate cause, it’s almost always there when you dig deeper.

Well, injecting a significant % of GDP in ‘new money’ directly to people is going to have economic consequences. :shocked:

I’m not sure I agree with this assessment of history at all. Some wars have been resource wars, and getting more resources is often at the heart of war, but doing so because you don’t have enough is … not a sufficiently justified read of the situation, to my view. The majority of true wars seem, to me, to be political wars about things like rights, power, debts, and other notional constructs and real shortages are nary in sight. You can argue that resources were the underlying cause of the politics, but I just don’t see that evident anywhere in the record, and in many cases, especially some of the biggest, it’s just plainly evident that an actual shortage or scarcity isn’t there at all. A country got ambitious and wanted to intentionally get bigger, or take away from some supposed inferior, or got dragged into war because of treaties, etc. I don’t buy that that’s actually a scarcity war under the hood at all.

It may be the other way around sometimes - the Fischer-Trops process was developed by Germany because of the war not as a cause of it.

Land could be seen as one of the most limited resources. Outside a few insane countries (China being one) literally building islands to expand what they claim is their territory, or the occasional airport-into-harbor extensions, we don’t get more of it in useful time scales. Plus, most of it’s claimed by some nation or another. There aren’t huge hidden reserves of land waiting to be discovered.

Certainly, but I don’t see that as a scarcity problem - it’s not like they LOST land they already had. Overgrowth does not a scarcity problem make – it makes an over-growth problem. Scarcity problems are “our crops failed, so we must invade another country to steal theirs which didn’t” or “they cut off our water supply by damming it up, so we’ll attack them and get it back” … at least, that’s how I see it. “We want to grow and take over everything” is a greed problem, and yes, that might be the basis for quite a number of wars - I wouldn’t disagree on that. If so, then it’s just an issue of semantics, although they might be important semantics.

It’s not the island itself, but the EEZ extension that goes along with the artificial islands that’s the difference there. The reclaimed land is barely usable except as an airstrip and housing troops to support that EEZ, and maybe as a refuge for fishermen harvesting EEZ resources.

Based on some conversations about a copper supply shortage, I decided to check wire costs. I ordered a bunch of it last year for solar from Wire & Cable Your way.

10AWG: $0.25/ft
12AWG: $0.19/ft

10AWG: $0.26/ft
12AWG: $0.20/ft

10/30/2020: Same as above

Delay a year.

10AWG: $0.45/ft (70% more)
12AWG: $0.31/ft (55% more)

Anyway. Just get a paper bag, breathe deeply, and repeat “2%, Transitory. 2%, Transitory.”

I’ll toss a little quote from this article in here too:

Before I get in my bubble bath for some deep thinking (I haven’t received a return phone call yet from Margot Robbie but that can’t be far away), here are some interesting statistics on copper showing declining grades (figure 4) and reserves (table 1) .

Looks like a supply crunch to end all supply crunches is on its way.

I gotta go dig out my receipts from last year but steel has been very very strange this summer. HRS angle has only had a tiny increase, but 1.5"x.125" box tube jumped up about $0.40/ft and the guy at the steel yard indicated it’s all the box tube that took such a jump. So it isn’t even 1018 steel per pound that has seen the increase.

Also 0.060" aluminum diamond plate jumped 16% from March to April of this year, but hasn’t increased again since. Go figure.