MetalMiner Newsletter
MetalMiner
The leading SaaS and data platform for metals procurement savings and price compliance
Three Articles?
About MetalMiner
Suppliers Only Want You to Look Above the Surface, but the Real Savings Lie Below
Your suppliers tell you certain things to keep your eyes above the surface. This is because the real savings opportunities lie below.
MetalMiner Insights identifies the prices that most closely mirror what an OEM actually buys, revealing the real savings below the surface. Combine that price with a short and long term forecast and notifications and the system will trigger you to take action so that you can get cost savings in any market - bull, bear or sideways.
Analyst Commentary
The Japanese Yen is Creating Export Instability
The Japanese yen has continued to weaken, reaching an all-time low in December of 2023. This trend has continued throughout 2024. Analysts predict that the yen will continue to depreciate against the dollar in the coming years, despite an appreciation in the early days of this month. The divergence in monetary policies between the Federal Reserve and the BoJ, coupled with weaker economic growth in Japan compared to the US, will continue to drive the yen's depreciation.
But more important, the recent currency volatility makes it difficult for Japanese traders to set prices for metal exports.
Japan's main metal exports to the United States include a variety of industrial and precious metals, and steel and aluminum, which are essential for the U.S. automotive and construction industries. Additionally, Japan exports significant quantities of copper and other non-ferrous metals.?
Currency fluctuations can create significant challenges for traders, particularly when there is a widening gap between domestic and international prices. For Japanese traders, the volatility of the yen against the USD has made it difficult to conclude transactions, as the fluctuating exchange rates introduce uncertainty and risk into their pricing strategies.
When the yen depreciates, the cost of importing goods increases, leading to higher input costs for Japanese businesses. Conversely, when the yen appreciates, Japanese exports become more expensive for foreign buyers, potentially reducing demand. This dual impact creates a challenging environment for traders who must navigate the complexities of currency risk management.
The MetalMiner take: We could see a significant pause in Japanese metal exports to the U.S. for anything quoted on “spot” buys. Contracted volume may see less of an impact.
领英推荐
Indonesia Increasingly Critical to U.S. as Nickel Mines Shutter
Cheaper Indonesian nickel supply continues to leave a wake of shuttered mines in the country's quest for global dominance.
Even before the latest plunge in nickel prices, a number of mines, including First Quantum's Ravensthorpe?and?BHP’s?Nickel West?halted operations this year due to weak market conditions. Now, as nickel prices remain in freefall dipping to their lowest level since March 2021, Glencore’s?New Caledonia?became the latest casualty posing a deficit risk to greener nickel supply favored by the West.
Largely in contrast to markets like copper and tin that face long-term deficit risks, the nickel market appears vastly oversupplied following capacity increases in Indonesia. Aided by substantial investments from China, Indonesia significantly?expanded?its role in the global nickel market over recent years. From 2020 to 2023, nickel smelters increased from 2 to 43, while?Indonesian?mine?output increased from roughly 30% of global production to 50%.?
The sharp increase in Indonesia’s control over the global market, especially as it comes at the expense of capacity elsewhere and is driven by Chinese investments, leaves a few risks to countries like the U.S. that will increasingly rely on critical minerals like nickel.??
While once an unlikely trade partner, such risks saw the?U.S. approach Indonesia?in mid-July in hopes of forming a partnership. This could result in a future trade deal and possibly increased U.S. investments in Indonesia, which would challenge China’s current dominance in the country and circumvent potential shortages as mines in countries like Australia shutter. As is always true, market consolidation will give Indonesia more control over supply, and therefore price. Fortunately for buyers, Indonesia previously stated intentions to keep global nickel prices?below the $18k/st mark. As much of Indonesia’s strategy relies on continued demand for nickel-containing batteries, maintaining demand conditions within the increasingly?challenged?EV market will require lower prices for materials like nickel, offsetting the risk of price gouging as Indonesia emerges as the 800-pound gorilla.
Source: MetalMiner Insights
- Nichole Bastin
Piece of Recommended Content
Global Market Meltdown! Are Commodities in a Freefall?
On Monday, the prices of various commodities dropped significantly due to a global financial market selloff. This was sparked by U.S. economic data that hinted at a possible recession, making investors wary. However, is it just more speculative panic as we recently saw with base metals?!
Some Shameless Self Promotion
Need a Leg-Up in Your 2025 Contract Negotiations?
Ready to outsmart the competition and master the art of metal pricing? Dive into MetalMiner's wisdom and transform your annual contract negotiations with our insider insights. In our guide, "Metal Price Contracting Indexes: The Secret Procurement Profit Tool," you'll uncover the keys to boosting your purchasing strategies and securing excellent pricing.