• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Wind droughts
  • 2 days "Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav
  • 1 day "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 1 day "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 1 day Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 8 days "Forget Oil, The Real Crisis Is Diesel Inventories: The US Has Just 25 Days Left" by Zero Hedge - 5 Stars *****
  • 1 day The Federal Reserve and Money...Aspects which are not widely known
  • 5 days Is Europe heading for winter of discontent with extensive gas shortages?
  • 1 day "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 1 day "Dodgy Demand Data? The Oil Price Collapse Conspiracy" by Alex Kimani
  • 8 days "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 9 days Goldman Betting on Cryptocurrencies
  • 12 days Сryptocurrency predictions
Ag Metal Miner

Ag Metal Miner

MetalMiner is the largest metals-related media site in the US according to third party ranking sites. With a preemptive global perspective on the issues, trends,…

More Info

Premium Content

Strong Dollar Threatens Demand For Industrial Metals

  • There are a growing number of factors pointing to a looming recession.
  • Federal Reserve interest rate hikes have sent the dollar into the stratosphere, and it’s causing major problems for the global marketplace.
  • "Base metals seem to be losing some supply-side support and are looking quite vulnerable to deteriorating demand conditions,” according to T.D. Securities Commodity Strategist Ryan McKany

Via AG Metal Miner

Experts agree that a global recession is now a foregone conclusion. Though they continue to argue about the potential extent of the damage and which countries may evade repercussions, few see any way to avoid a downturn. As usual, one of the first markets to react to the growing concern is industrial metals.

Back on September 6, the Financial Times was sounding the alarm on industrial metals. At the time, the S&P GSCI had just witnessed a crushing descent from March highs. In fact, the index had largely risen since the beginning of the pandemic, when prices averaged in the mid $260s per share. However, this past trading session, prices are again approaching the $400 per share support level.

The main reason many industry insiders remain convinced of an impending recession is the shocking number of factors at play. More than two years into the COVID pandemic, China still suffers frequent lockdowns and shipping delays. Seven months into Russia’s Ukraine invasion, and Putin is still rattling his saber. More importantly, he’s severely restricted energy supplies to Europe VIA the Nord Stream 1 pipeline.

The energy crisis seems the main culprit paving the way for a recession, especially in the U.K., according to Clive Burstow, Barings’ head of natural resources, “This is all about recession and recession fear.” He added that energy woes are the main point of concern among himself and his colleagues.

Industrial Metals Demand Colliding with a Strong Dollar

The U.S. dollar is stronger than it’s been in decades, primarily due to ongoing interest rate hikes from the Fed. But while a powerful dollar sounds like great news, it’s actually big trouble for a global marketplace. After all, those companies attempting to buy goods with a weaker currency will end up paying more, further eroding demand.

Indeed, Reuters reported early Monday that LME Copper Prices reached a two-month low, falling to $7.375 per ton. This represents the lowest level since late July and a 32% drop from March’s record highs. Aluminum also dropped, reaching $2,151 a ton – an 18-month low. Tin, meanwhile, rose a modest 1.5%.

According to T.D. Securities Commodity Strategist Ryan McKany, the outlook appears weak for metals. “Base metals seem to be losing some supply-side support and are looking quite vulnerable to deteriorating demand conditions,” he said.  

By The MetalMiner Team

More Top Reads From Oilprice.com

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News