Metal prices hit record highs, consumer goods costs rise
Metal prices are at record highs as raw materials remain scarce, exacerbated by the war in Ukraine. The crisis threatens to drive up the costs of goods ranging from kitchenware to consumer electronics and construction.
Although the metals have yet to face sanctions, US manufacturing companies are shunning Russian products, sending shockwaves to a variety of metal products.
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Russia is a key global supplier of metals such as aluminum, nickel and palladium, which rose 52.4%, 211.04% and 29.8% respectively on Wednesday based on forward settlement prices .
While Russia and Ukraine account for 7.5% of global iron and steel exports, Russia accounts for 5% of nickel production and 6% of aluminum production.
These metals are used to make stainless steel, lithium-ion batteries and other manufacturing inputs, which impact the construction and automotive industries.
Construction projects are expected to experience further price increases and even cancellations or delays.
“The prices of construction inputs such as steel and copper are already very high, and that’s pushing the needle even higher,” Anirban Basu, chief national economist for Associated Builders & Contractors, told FOX. Business. “Equipment is already scarce and already very expensive. It is really difficult for them to deliver projects within budget and on time given the dynamics of the workforce, which makes the situation even more difficult. difficult.”
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A Manhattan-based metals maker told FOX Business that its suppliers would not quote prices for more aluminum, raising concerns about its ability to secure raw materials.
“Being able to get the hardware is the first hurdle, and the price is the second part,” Jeffrey Herkes, president and founder of Hammersmith Metals, told FOX Business. “Every 90 days I seem to get a price correction whether it’s stainless steel going up due to nickel, chrome and other materials.”
Hammersmith Metal Fabricators specializes in the design, fabrication and fabrication of custom metalwork for the cityscapes of New York, Brooklyn, Staten Island and New Jersey. Their craftsmen create landscaping and furniture with a variety of materials like copper, stainless steel, aluminum and steel.
Herkse said a priceless safe zone “does not exist today” as prices for all metals continue to rise across the board.
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Milgo Bukfin, a Brooklyn-based custom metal fabrication company, has to pass costs on to customers due to rising material costs. The company provides services such as metal bending, laser and waterjet cutting, and full fabrication and finishing for commercial projects including One Vanderbilt, Hudson Yards and LaGuardia Airport.
Scott Kranzler, vice president of Milgo Bufkin, told FOX Business that his company has yet to experience any delays or cancellations, but that doesn’t rule out fears of future disruption if uncertainty and price hikes metal market prices persisted.
The construction industry is not alone in grappling with the headwinds of volatility and soaring commodity market prices. Automakers already hurting from rising energy costs and continued chip shortages are facing new hurdles that could mean higher prices for drivers.
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Nickel is a major component of lithium-ion battery cells used in the majority of electric vehicles on the US market.
The price of nickel soared by triple digits this week before being halted on the London Metal Exchange in one of the most extreme moves ever seen in metals markets. On Tuesday morning, prices for three-month contracts more than doubled to over $100,000 a ton. Even though there are other steel and iron producing players in the global economy, such as the United States, Japan and Germany, there is no practical alternative to Russia for nickel, which underlines its drastic price compared to other raw materials, according to the Atlantic Council.
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Morgan Stanley estimates that surging nickel prices could add another $1,000 to the price of electric vehicles.
Russia also supplies 35% of the world’s palladium, a major component of catalytic converters for petrol and diesel models, both of which account for the majority of car sales.
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