Border States Commodity Update - December 2024
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Commodity Trends
Commodity price?changes from November 2023 to November 2024:
Copper production resurges in Chile
Chile’s mining production is rebounding after falling to over 20-year lows. October marked Chile’s highest monthly output of the year, with producers working to revive old mines and address declining ore grades to meet global demand.
Why it matters: The challenge of addressing deteriorating mines and declining ore quality is a global issue. The concentration of critical minerals, like copper, within the ore itself is decreasing, forcing mines to extract deeper into the earth’s crust to meet current and future demand. This results in higher extraction costs, increased safety and labor concerns, and encountering government environmental regulations and pushback from local communities, intensifying the challenge of meeting demand in an increasingly copper-dependent world.
Copper opened at $4.23 on Monday, December 9.
Aluminum prices may shift under proposed tariffs
Aluminum opened at $1.40 on Monday, December 9.
Market analysts predict that aluminum and steel would be the most impacted metals if President-elect Donald Trump follows through on his plan to impose a 25% tariff on Canada and Mexico.
Why it matters: The U.S. imports 70% of its aluminum supply, with 60% coming from Canada. If tariffs come to fruition, it would significantly increase the costs of aluminum in the U.S.
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Potential tariffs garner support with steelmakers
Some U.S. steel suppliers support Trump’s potential tariffs on imports from Mexico and China and tighter enforcement of rules on Canadian steel imports. They are also advocating for the President-elect to reimpose tariffs on the United Kingdom, European Union and Japan.
Why it matters: Supporters argue that stronger tariff protections would bolster domestic output, improve employee benefits (e.g., 401(k) contributions and health insurance) and enhance competitiveness against international suppliers.
Yes, but: Steel imports account for 24% of the U.S. supply, with Canada and Mexico as the largest importers. Experts claim a 25% tariff could increase steel prices by $100 to $150 per short ton.
More steel news: Trump pledges to block Nippon Steel’s purchase of U.S. Steel, stating to use tax incentives and tariffs to boost the domestic steel company.
PVC market stays steady
The PVC market holds steady as suppliers expect the market to bottom out by year-end, followed by stability or slight growth.
News roundup
The Federal Reserve cut interest rates by a 25-point basis during their November meeting. The Open Market Committee’s next meeting is Tuesday–Wednesday, December 17–18.
Border States is introducing a newsletter, the Supply Chain Update, in January 2025 to help you navigate the challenges of the global supply chain.
Border States wishes you a happy holiday season.