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Lead prices lost more than 10 percent on Friday

Discussion in 'Uncategorized Threads' started by Joe Potosky, Oct 24, 2008.

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  1. Joe Potosky

    Joe Potosky Well-Known Member

    Jan 29, 1998
    Lead prices lost more than 10 percent on Friday

    LONDON, Oct 24 (Reuters) - Lead prices lost more than 10 percent on Friday to $1,145 a tonne -- its lowest since August 2006 -- as the market priced in the threat of a global recession and the dollar strengthened.

    Lead for three-month delivery on the London Metal Exchange was trading at $1,160 a tonne at 1000 GMT, compared with $1,275 at the close on Thursday.


    US spot market at 9:45 AM

    $ 0.5337/lb
  2. shot410ga

    shot410ga Well-Known Member

    Jan 29, 1998
    I wish the price would start to trickle down to the retail level.
  3. Obs

    Obs TS Member

    Jan 29, 1998
    Looking forward to $16 shot again. Right!!

  4. halfmile

    halfmile Well-Known Member

    Jan 29, 1998
    Green Bay Wisconsin
    Aluminum cans went from almost $.90/lb to $.27 or so in the last 2 weeks.

    But the romex at Home Depot is still 65 bucks. Ouch.

  5. Big Heap

    Big Heap TS Member

    Jan 29, 1998
    From today's WSJ:

    Steve Sarnoff is caught in a classic recessionary squeeze.

    Earlier this year, the owner of scrap metal dealer General Metals Corp. paid top dollar for unruly stacks of aluminum cans and copper wires, believing he could sell them for more to metal smelters and manufacturers.

    Now demand and price are in a freefall. Does the Miami businessman sell his now high-priced inventory at basement prices, or wait for the market to recover?

    Barbara P. Fernandez/WPN for The Wall Street Journal
    Steve Sarnoff, owner of Miami scrap dealer General Metals Corp., with a stack of aluminum cans. Prices have tumbled 33% in just the last few weeks.
    There are thousands of businessmen around the world in the same bind. Driven by once insatiable demand from China and other developing countries, service center owners and metal dealers built vast stockpiles of scrap steel, aluminum, copper and nickel, expecting prices to continue rising.

    But in the last six weeks, scrap steel prices have fallen nearly 60% to about $400 a ton. Prices for aluminum scrap has dropped 33%, copper 25% and nickel about 15%. Peter Marcus, metals analyst for World Steel Dynamics, says, "We aren't near the bottom yet."

    Most scrap dealers in the U.S. are small to medium-sized businesses like General Metals, which employs 30 people at two locations. But some are units of big steelmakers' Nucor Corp. and Steel Dynamics Inc., which purchased independent scrap operations to guarantee a supply feedstock.

    Typically, these dealers scour small manufacturers, businesses and construction sites for recyclable metal. Sometimes they will pay top dollar, not wanting to be caught short when a customer calls. The scrap is separated by type and grade, and shipped to steelmakers or parts manufacturers, who melt and use it to make other metals and products.

    For much of the past two years, demand and prices for various scrap metals -- steel, aluminum, copper and nickel -- were so high that metal thieves prowled the country stealing metal beer kegs, sculptures and manhole covers and reselling them to scrap dealers.

    But the rosy picture dimmed as automakers began cutting production of gas-guzzling SUVs. The bursting of the housing bubble meant less scrap was needed for girders, aluminum for siding and copper for wires. Plummeting consumer confidence chilled sales of refrigerators and other metal appliances.

    Then, overseas markets withered. China, a big user of scrap until recently, now limits imports of scrap steel and other metals, analysts say. India, Russia and Eastern Europe, too, are buying less scrap.

    Last week, steel scrap buyers in Japan announced two price cuts in a 48 hour period, for a total of 15%. In Europe, scrap purchases have all but stopped in the last two weeks as steel mills, some operating at about 50% capacity, quit buying.

    Scrap dealers in Houston, Denver and Cincinnati have closed their doors. Thomas Danjczek, president of the Steel Manufacturers Association, said newer operations, which started in the last few years to cash in on the commodities boom, weren't prepared for such a quick downturn.

    Just a few months ago, David Davis says his Global Scrap & Dismantling in Houston, was beefing up inventory to hedge against expected price increases. Now that scrap steel is sitting in his warehouses.

    "People are not buying," he says. Steel mills, his biggest and heretofore best customers, are cutting production.

    Some scrap dealers note that while the price of scrap steel has dropped to $400 a ton, it's still double the 2003 selling price. "The last two years have been the best I have ever seen," says General Metals' Mr. Sarnoff, who expanded his workforce and took a dream cruise to Alaska with his wife.

    Overseas customers, which once consumed about 60% of his 20 million short tons of scrap, "have stopped (buying) completely. I can hardly get a quote out of them," he says.

    His domestic customers -- small companies that melt metal for or make parts for the automotive industry -- are pitting dealers against one another to get lower prices. As a result, Mr. Sarnoff has hundreds of tons of copper, nickel and aluminum scrap piling up in his warehouses.

    Last month, he bought about 200,000 pounds of insulated copper wire for between $3.00 and $3.25 a pound. He figures that same copper now is worth about $2.00 a pound, at best.

    From a cluttered office near the Miami airport, Mr. Sarnoff pounds the numbers into an old Samsung adding machine sitting on his desk. But he can't bring himself to read the final tally.

    "You do the math," he says. The metal has lost between $200,000 and $250,000 in value. Additional losses on aluminum and nickel raise the potential losses to several hundred thousand dollars.

    Two strong years helped him build a cushion, which allows him the luxury of splitting the tab. He will hold onto the majority of high priced metal, hoping that prices will rise again, and sell batches of scrap that he was able to get at lower prices.
  6. Uncle Sam

    Uncle Sam Member

    Jan 6, 2006
    Can you say " 35.00/flat ammo "??????.....Please ????......Uncle Sam, Pa.
  7. pdq

    pdq Member

    Aug 24, 2006
    It's all supply and demand.

    Overwhelming demand, fueled by speculators who stockpile to sell at higher prices (aka greed) kills supply further, drives prices up.

    The opposite also happens when demand falls sharply and the stockpilers dump to cut their losses. Freefall.

    Given what's happening financially around the globe, I don't expect the prices to go zooming up any time soon.

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