Price trend of raw materials, steel, copper, and paper ｜ Aquasky
A few weeks ago, we had international commodities soaring as a topic to explain the market trends of the four major raw materials of pressure tanks steel, plastic, rubber, and pulp. The impact of the novel coronavirus pandemic on these materials. In this article, we can learn more about the recent price trends of steel, copper, and paper.
Compared with industries such as consumer electronics and shipping, the steel industry is a "slow-to-warm-up" industry in the post-pandemic era. Although China Steel Corporation, the leader of Taiwan's steel industry has started to increase its product prices since the third quarter of 2020. However, so far it has been adjusted for 11 consecutive months. Even though the price kept increasing, the demand has not been reduced. From the fourth quarter of 2020 to the first quarter of 2021, it is obviously replenishments of the previous stock shortage. After March, there were more orders in advance because of expected market conditions to continue to rise.
The recovery of the steel industry is not only driven by infrastructure, but also the global green energy trend. For example, the expansion of solar energy, electric vehicles, and semiconductor plants all require higher-quality steel as raw materials. The electrical steel used in electric vehicle motors are high-quality, high-profit margin products, and are also one of the important reasons for promoting industrial transformation and upgrading. However, the trend of green energy also brings new variables to the steel industry. Due to the requirements of countries all over the world for carbon reduction in recent years, the carbon tax that Europe is about to levy will increase about 30 to 60 US dollars per ton in the future.
From the perspective of steel price fluctuation, at the beginning of this year, Taiwan's hot-rolled steel export closing price was 760 US dollars per ton, Europe was about 800 US dollars, and the United States exceeded 1,000 US dollars per ton. In the second quarter, the price is getting higher and higher. At present, European hot-rolled steel products have reached US$1,200 per ton and the United States $1,700 per ton. China Steel Corporation launched the domestic price for July and the third quarter on June 15. The price was flat as the previous month. In the third quarter, ten specific products such as rod wire and steel plate increased by NT$2,000 to NT$2,900 per ton, with an average increase of 4.1%. The increase for 12 consecutive months has become a certainty.
On the whole, it is likely that the steel prices are going to rise in the third quarter. Demands for steel products seem to remain the same until the end of the third quarter. However, some experts have warned that there will be a sharp drop in steel prices after a period of time due to history. For steel buyers, the steel production capacity that was affected during the pandemic has gradually recovered. This also means that the shortage of supply will become better.
Copper is one of the indispensable metals in industry. It is also known as the "mother of industry". Compared with other metals, it has conductivity and competitive prices. Many electronic components also use copper foil or copper wire. Chile is the country with the richest copper mines. It is estimated with a quarter of the world's output.
There are several reasons for the soaring copper price, such as the economic recovery of major importing countries, the decline of the US dollar, insufficient inventory, and the market's concerns about the supply situation in Chile. With the recovery of China's economy, demands for copper are getting stronger and stronger. It is estimated that copper consumption this year will reach 12 million tons, accounting for half of the world's total consumption. In response to the global carbon reduction trend, the price of copper which is a key metal for green energy transformation has risen. The main cause of the latest market turmoil is the threat of strikes in Chile, which may lead to supply disruptions.
The price of copper futures on the London Metal Exchange (LME) hit a record high of US$10,460 per ton in early May, with a cumulative increase of 32.6% from January to May this year. Bloomberg Information strategists believed that copper prices will rise to a record high of US$10,190 per ton recently, while Citibank expected that copper prices will rise to US$12,000 per ton in the next three to six months. Goldman Sachs had even announced that copper was the "new oil", predicting that the average price of copper will be US$9,675 per ton this year and US$11,875 next year.
The supply shortage has caused copper prices to soar. According to Bank of America (BOA) data, if the supply and demand deficit has been continuing to expand, it will usher in a "running out of copper." Bloomberg Information reported that global copper materials are expected to face severe supply shortages in the next ten years. Bank of America Commodity Analyst Michael Widmer pointed out that due to the basic environment and insufficient inventory, the price of copper exceeded US$10,000 for the first time in 10 years, and it may soar to US$13,000 per ton in the next 10 years.
In the post-pandemic era, countries around the world have begun to resume work and reopened their economies, coupled with the current stay-at-home economy still prevailing, which has led to a significant increase in corrugated fiberboard consumption. However, the international abolition of import shortages and shipping problems that were severely affected by the pandemic has not yet been alleviated. In addition, Taiwan has also recently been attacked by the novel coronavirus. As a result, 60% of the domestic recycled waste paper has been reduced by 2 to 3% within 10 years. This has pushed up the price of waste paper, which is undoubtedly double-kill for the paper industry.
April is the busy season for Taiwanese orchardists to ship products, and a large number of cartons are bound to be needed. Due to the shortage of water in Taiwan a while ago, the demand for bottled water and mineral water cartons broke out in advance, which accelerated the serious shortage of cartons.
Due to the continuous price increase of international waste paper which is an important raw material for industrial paper, Taiwan's top three paper manufacturers, Cheng Loong, Yong Feng Yu, and Longchen have increased their prices by 10% to 15% in January this year. The price of waste paper per ton in the United States has risen from US$250 at the beginning of the year to US$270-280, which in turn drove up the price of domestic waste paper by about 10%. It is currently confirmed that various manufacturers will continue to make a second wave of increases in June. The current demand in the labor market continues to increase, and if the current situation is not alleviated, the cost may continue to increase in the future.
As for the toilet paper for people's daily necessities, the price had increased by 50% compared with the end of last year. CHUNG HWA PULP CORP. pointed out that the price of short fiber pulp in the fourth quarter of last year was about US$500 per ton while long fiber was about US$700 per ton. Experts predicted that the price of short fiber pulp will break through US$800 per ton, and the long fiber pulp will rise to US$1,000. It is likely that the price will remain high this year. The raw materials of toilet paper are mostly made from short fiber pulp. Kimberly-Clark, located in the United States, announced in early April that it would increase the prices of toilet paper, diapers, and other products in late June. As for whether Taiwanese household paper will be followed up, it still winds in the market and has not yet been finalized.
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