Armada Intelligence » Metals

Global Steel Prices Continue to Dip $

karen — Wed, 08 May 2013 14:44:49 +0000

This isn’t a perfect science, but one can take a look at the global composite carbon steel price index and see what’s happening to the broadest measure of industrial metals demand.

Update on Industrial Metals $

karen — Fri, 05 Apr 2013 19:49:02 +0000

The S&P GSCI commodities indexes show us the relative strength or weakness of the industrial metals trade around the world. Looking at the performance of industrial metals since the beginning of the year, we can quickly see that the entire complex is struggling under the global economic uncertainty around the world. Every metric in this chart is negative for the year with Lead, zinc, and aluminum posting double-digit losses. Even the strength of copper has been weak YTD, down 7.25% on the year.

We still have to see what happens with the global trade of commodities with the currency wars currently ongoing. Some companies

The Modern Robot and Energy – a Link $

karen — Fri, 15 Mar 2013 16:50:41 +0000

We could have put this story really in any of our categories. The robot world is finally catching up to something we were told in an interview years ago. A current reader of ours that will go nameless had been an executive for a company that had been on the bleeding edge of top secret technologies. But he told us in a meeting one time about an interesting fact that scientists had discovered about robot design. Essentially, the design of robots had to follow many of the laws of nature – if you couldn’t find a living, breathing animal or mammal in nature shaped like your robot – it probably wouldn’t be stable. Makes sense, right?

Therefore, its interesting that there is a new robot that was designed with disasters like the

A Bit more Proof of what Analysts Think of Copper

karen — Fri, 19 Oct 2012 16:34:42 +0000

Copper prices were up today by about 1.2% despite all of the shenanigans happening on Wall Street today. Want to know the reason for it? The improved housing data. Why would improvements in housing have an impact on copper prices? Again, as we keep harping on, copper is one of the best metals to look at as it pertains to raw material inputs into electronics, plumbing, and other materials used in multiple industries. Silver is also one of those metals in that category. So, a growth in proposed housing construction would have a bullish impact on the demand for copper. Not only does it factor into the actual construction of new housing itself – but a growing housing sector would theoretically increase demand for a wide range of new electronics products and it would signal a general strengthening of the broader US economy.

A little More Proof of Steel Stockpiling in China $

karen — Fri, 05 Oct 2012 17:38:39 +0000

We picked up a report this morning from China that discussed the surge in steel prices (finished steel) and it included several interesting pieces to it. Primarily, we saw that the national daily output of steel products for China was up about 2.89% in September. Prices are rising but final demand for steel products are still down. So, iron ore imports are up, steel production is up, but consumption is flat or down. That sounds like stockpiling. We also have access to a chart that the China Daily put out today showing the price per metric ton (in yuan) from the past month. We can see the surge in price but again, don’t get a resulting rise in Chinese economic activity. We did see a slightly improved Chinese manufacturing PMI report for September – which would have increased steel demand slightly. What to do with this? If this follows traditional “stockpiling” periods that we have seen in the last five years, we typically get a misreading of current increases in demand as a boom in economic activity – only to see it plummet at the beginning of a real economic build cycle – because of the stockpiling. So we can’t make a lot of ties between this surge in steel and potential economic boost in activity, it just might not be there at this time.

Hmm, what to make of this? $

karen — Wed, 03 Oct 2012 18:03:13 +0000

Chinese imports of Australian iron ore spiked in August, up 25.4% over July’s volumes. But, coking coal and scrap metal fell at the same time. Just as background, there are three components to making steel: iron ore, coking coal, and scrap metal. Regarding the different pieces of news: the scrap metal piece they can likely get locally to some degree, so we would write that off as an ‘interesting aside’. The coking coal piece could also be written off as a supply that they had left over from weaker demand this spring. Certain types of coal

Sneaky Copper… $

karen — Fri, 31 Aug 2012 20:26:36 +0000

Copper is typically held up as one of those critical barometers of the global economy. The metal is used in virtually everything – everything with an electronic component that is. It is also used in so much of the plumbing, wiring, and infrastructure in construction that we see spikes in copper prices when the economy is growing. In fact, the metal is so popular among many economists that many ignore many other metrics because of the noise in them and follow the price of copper to understand where the economy is going.

If we just look at the performance of copper over 2012, we can

How Weird is Going Back to the Gold Standard? $

karen — Fri, 24 Aug 2012 19:55:26 +0000

The gold bugs are back after some 30 years in the wilderness and the Fed has only itself to blame. The last five years have featured the loosest monetary policy pursued by the central bank in decades. There are many reasons for the Fed’s decision to flood the economy with cash and from a wide variety of perspectives – mostly it has been motivated by the fact that the economy has been floundering since the bank-led collapse of 2008/2009. In the absence of coherent fiscal policy the Fed has felt compelled to step in and take the reins. Normally dropping interest rates to near zero would have been plenty of incentive but that has obviously not been the case – so the Fed has trotted out every approach they have at their disposal. The reserve ratio is nil, banks are nearing no interest on the money they are holding at the Fed and there have been two large bond interventions with QE I and QE II. The Fed now holds the majority of

Durable Goods – Devil is in the Details

karen — Fri, 24 Aug 2012 19:25:13 +0000

The latest durable goods order report is actually pretty good – the best gain seen this year. This would be cause for some celebration were it not for the specifics that accompanied the data. This is one of those months where the transportation sector created the majority of the growth – and next month could well be the month that all that falls off. The durable goods data is always skewed by what happens in the airplane sector and the data this month reflected a good sales period for the likes of Boeing. Car sales also contributed to these good numbers – but watch out for next month.

It was just announced that Qantas is canceling its order for 36 of Boeing’s Dreamliner as they have been losing loads of money lately (as we mentioned yesterday). The problem now is that Boeing is now in danger of falling below the profitability threshold for the aircraft. This is very likely to show up in next month’s data and then we will all be wondering what the heck happened with that positive durable goods data. The real point to make note of is that new orders for business machines are down and it now looks like there is a slowing in the level of capital expenditures by corporations. This may be fallout from the worries over the fiscal cliff but it may also just mean that the economy is too slow to sustain much expansion.

Using Industrial Metals as a Global Economic Barometer $

karen — Thu, 17 May 2012 19:23:38 +0000

There was an interesting interview with Dennis Gartman, the editor and publisher of the Gartman Letter and a frequent contributor on financial media sites. Gartman is a fiscal conservative professor and financial market analyst focused on the commodities sector – and he had an interesting take on industrial metals recently. Gartman said that you can take the base group of industrial metals and how they are trading in the futures markets and gain a strong macro-understanding of global business conditions. That’s not a revelation to most of us that have been tracking certain industrial metals for some time – but here is a prominent analyst with a solid track record telling us some of the