Metal prices hit record highs, costs of consumer goods to rise
Wheat prices hit 14-year high as food shortage fears rise
FOX Business correspondent Lydia Hu has the latest from Eastchester, New York, on ‘Cavuto: Coast to Coast.’
Metal prices are surging to record highs as the commodities remain in short supply exacerbated by the war in Ukraine. The crunch is threatening to increase the costs of goods from cookware to consumer electronics and construction.
Although metals have not been subject to sanctions yet, manufacturing companies in the U.S. are avoiding Russian goods, sending shock waves to a variety of metal commodities.
COMMODITIES HAVE BEST WEEK EVER AS RUSSIA, UKRAINE SPARKS BUYING
Russia is a key global supplier for metals such as aluminum, nickel and palladium, which soared 52.4%, 211.04% and 29.8%, respectively on Wednesday based on futures settlement prices.
While both Russia and Ukraine account for 7.5% of global iron and steel exports, Russia makes up for 5% of nickel and 6% of aluminum production.
These metals are used to make stainless steel, lithium-ion batteries and other manufacturing inputs, which are rippling through the construction and auto industries.
Construction projects are expected to see incremental price hikes and even cancellations or delays.
"Construction input prices such as steel and copper are already sky high, and this is moving the needle even higher," Associated Builders & Contractors Chief National Economist Anirban Basu told FOX Business. "Equipment is already in short supply and already very expensive. It's really hard for them to deliver projects on budget and on time given labor force dynamics, and this renders that situation even more difficult."
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One metal fabricator based in Manhattan told FOX Business that his suppliers will not quote prices for more aluminum, raising concern over whether he can secure the raw materials.
"Being able to get the material is the first hurdle, and the pricing is the second part," President and Founder of Hammersmith Metals, Jeffrey Herkes, told FOX Business. "Every 90 days I seem to be getting a price correction, whether it’s for the stainless steel that’s going up because of the nickel, chrome and other materials."
Metal Fabricating at Hammersmith Metal Fabricators (Scotch View, New Jersey) Hammersmith Metal Fabricators specializes in the design, fabrication and manufacture of customized metalworks for urban landscapes throughout New York City, Brooklyn, Staten Island and New Jersey. Their craftsmen create hardscapes and furniture with a variety of materials like copper, stainless, aluminum and steel. Herkse said that a price-free safe zone "doesn’t exist today," as prices for all metals continue to rise across the board. Metal Fabricating at Hammersmith Metal Fabricators (Scotch View, New Jersey) EXXON MOBIL CEO SAYS OIL COMPANIES WERE IN TOUGH POSITION BEFORE UKRAINE-RUSSIA WAR Milgo Bukfin, a Brooklyn-based custom metal fabrication company, is having to pass along the costs to clients due to the increase in 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 not had any delays or cancellations yet, but that does not rule out concern for future disruptions should uncertainty and price increases in the metals markets persist. It’s not just the construction industry grappling with the tailwinds of the commodity market’s volatility and price pops. Automakers already hurting from higher energy costs and the ongoing chip shortage are facing new obstacles that could mean higher prices for drivers. WHEAT PRICES HIT 14-YEAR HIGH, FOOD SHORTAGE FEARS RISE Nickel is one of the main components in the lithium-ion battery cells used in the majority of electric vehicles in the U.S. market. The price of nickel spiked triple digits this week before being halted on the London Metal Exchange, one of the most extreme moves ever seen in the metal markets. On Tuesday morning, three-month contract prices more than doubled to over $100,000 per ton. Even though there are other steel and iron producing players in the global economy, such as the U.S., Japan and Germany, there are no practical alternatives to Russia for nickel, underscoring its drastic price compared to other commodities, according to Atlantic Council. GET FOX BUSINESS ON THE GO BY CLICKING HERE Morgan Stanley estimates the spike in nickel prices could add an additional $1,000 to the price of electric vehicles. Russia also supplies 35% of the world’s palladium, one of the main components in catalytic converters for both gasoline and diesel models, both of which account for the majority of car sales. CLICK HERE TO READ MORE ON FOX BUSINESS Source: Read Full Article
