2012 was a rollercoaster for many commodities, including several of the metals and metals-related indexes we track on our sister site MetalMiner. In the latest MMI report from December 2012, we see a continued commodity seesaw: "This past month (December's reading of November data), we have seen every single index value buck the previous month's trend. Only one index declined from the prior month (Renewables MMI®), one remained flat (Global Precious Metals MMI®) and all of the others improved (Raw Steels, Aluminum, Stainless, Copper, Automotive, and Rare Earths MMIs). However, only one index reading currently stands higher than our January 2012 baseline - the Automotive MMI®."
Further, "the two biggest movers of the month include the Aluminum MMI® and the Stainless MMI®, each moving up 4 points, both on the back of upward LME price activities for aluminum and nickel contracts, respectively. The fundamentals for each of these indexes, however, look a little different. Aluminum has taken its price cues from the warehousing games still alive and well that have essentially limited available supply, combined with some curbing of production; whereas stainless has seen some durable-goods demand improvement in the US. China has also turned in some respectable manufacturing numbers this past month, which has effectively provided price support for several of the indexes."
What do December's numbers show? Essentially, as Lisa Reisman (Managing Director of MetalMiner) told Spend Matters, "The year is essentially looking to close out as where it started. Most everything was up from the previous month. I think we took some negative news the month prior that worked its way out of the pricing equation. Perhaps most curious is that all the latest MMI pricing represents a new one-month trend (directionally). In other words, we have no trends going on whatsoever from month-to-month."
More broadly speaking on 2012, Lisa's macro observation is that "if you look at the commodity (metals) market from a snapshot perspective, it would look like nothing moved, but the volatility was immense. But what you don't' see is rollercoaster in between – and the sourcing strategies companies had to deploy to manage through this volatility."
What does this bode for 2013? We'll offer our commentary in a few hours on that topic.
For further reading on strategic sourcing and commodity management, we suggest the following papers from our free research library: