The metals industry is no stranger to volatility, particularly this year with the rise in prices mainly due to the impact of Coronavirus. The manufacturers that produce materials were not immune to coronavirus and felt the impact. They were down employees, lead times were pushed out as countries shut down, and getting resources became incredibly difficult. The COVID-19 vaccine may have resulted in some sectors rebounding to pre-pandemic levels, but in our industry, supply remains tight causing prices to rise. Simply put, metal producers are facing a lack of resources to both manufacture and deliver the metals.
The increase in metals prices, like fuel prices, may indicate that we are emerging into a time of economic recovery. The greater the demand, the more metals that are being put back into the economy in the form of buildings, tech, infrastructure, etc., resulting in more manufacturing (and sales) in the future. “Prices for copper have risen to their highest level in almost eight years,” The Wall Street Journal reports. “Other raw materials, such as aluminum and zinc, have added roughly 15 percent since the end of September and 40 percent or more since mid-May.”
One other key factor of metal prices rising is increased interest from investors. Throughout the pandemic, investors kept their money in safer markets. Now, with pandemic closer to being in the rear-view mirror, they are looking to invest in industrial metals. Metal is the key to making everything, from electric cars to homes to the device you are using to view this blog. As The Wall Street Journal Reports, “Investors are piling into wagers on industrial metals like copper and nickel, betting that the coronavirus vaccines and stimulus programs will drive a boom in manufacturing activity as part of a global economic resurgence.” Here at Admiral, many industries we serve took a hit in 2020. Now, we are seeing our customers gaining jobs and placing orders equal to the pre-pandemic level, if not higher. We remain optimistic about the prospects for the coming year.
