Commodities Roundup: Oil price movements; Brexit aftermath; aluminum import monitoring

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For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts from particular commodity markets, which this week includes analysis of oil price movements, a review of the Brexit trade deal and much more.

MetalMiner, a sister site of ours, scours the landscape for what matters. This week:

Oil price movements

Meanwhile, the oil price had a down 2020, despite a small recovery in December.

“However, the oil price is nowhere near where most OPEC+ members would like it to be,” MetalMiner’s Stuart Burns explained. “It’s also not where shale producers need it to be to sustain capital raising for a return to growth.

“However, the oil price could arguably have been a lot less. The price owes its current position to stoic management by OPEC+’s leading producers, Saudi Arabia and Russia.

“Consumption still hasn’t recovered to a pre-pandemic level. Furthermore, it doesn’t have any prospect of reaching the levels projected for 2021 global consumption this time last year.”

Turkey ups steel export profile

MetalMiner’s Christopher Rivituso checked in on the Turkish steel sector, which has made several additions to capacity.

“Besides North America and Europe, Turkish steel has also seen demand from emerging economic areas, such as the Middle East, Asia and Africa, the same source said,” Rivituso wrote.

“Turkey is also among the world’s few steelmaking majors to see gains in crude steel production over 2020. This came despite the economic slowdowns the COVID-19 pandemic caused.

“Total crude production by Turkish mills in November rose 11.6% year over year to 3.22 million mt. The total marked an increase from almost 2.9 million mt, the World Steel Association (worldsteel) reported Dec. 22.”

MetalMiner releases January 2021 Monthly Metal Outlook

In other news relevant to metals buyers, MetalMiner released its first Monthly Metal Outlook (MMO) report of the year.

The report includes analysis of 10 key metals, including support and resistance levels and buying strategies. Visit MetalMiner for additional details and information on how to subscribe.

Brexit aftermath

After years of tension and posturing, the EU and UK have finally reached a trade deal that will shape the parties’ post-Brexit relationship.

However, as Burns noted, the deal reached at the 11th hour last year is not entirely comprehensive.

“The deal covers goods, exports to the EU of which make up just 8% of UK GDP,” he noted. “However, the deal leaves out services. According to The Guardian, services account for around 80% of the UK’s economic activity and about 50% of its exports by value to the EU.

“There will be a lengthy process of ongoing negotiation around how much access the City of London is allowed to EU business. Similarly, there will be discussions regarding what constitutes the required ‘equivalence’ for which the EU is looking.

“This means the previous passporting agreement allowing automatic access to the EU is replaced by so-called equivalence. That is, each side unilaterally permits companies from the other to conduct certain financial activities in its territory.”

General Motors revs ahead in Q4

In its most recent quarterly sales report, General Motors touted a US sales increase of 5% year over year.

GM said Q4 2020 retail sales marked its best Q4 since 2007.

J.D. Power and LMC Automotive, meanwhile, forecast December sales in the US to rise 1.0% on a year-over-year basis (when adjusting for differences in selling days).

In other automotive news, earlier we touched on the oil price — also, this week the Energy Information Administration reported average retail gas prices last year fell to their lowest level since 2016.

US to launch system to monitor aluminum imports

The US already has a formalized system for the monitoring of steel imports.

Soon, it will also have one for aluminum.

“The system, similar to the Steel Import Monitoring and Analysis (SIMA) system, will collect and publish data on aluminum imports into the US,” MetalMiner’s Maria Rosa Gobitz wrote.

“The system will allow users to track trade flows more easily to help spot trends earlier and to provide better guidance to the domestic industry and government. Likewise, better data collection and its analysis should allow domestic producers to compete on a level playing field.

“The system is expected to be available on Jan. 25, 2021.”

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