Since China’s government started cracking down on its overheating property market in mid-April, global prices for aluminum are down 18%; for copper, 13%; for lead, 19%; and for nickel, 27%, though prices for all of those metals have stabilized somewhat in recent weeks. Steel prices in China are down about 15% over the period. Analysts say there could be further declines, as growth in China’s huge construction sector continues to ease.
Is this a supply chain risk or opportunity?
Nickel prices are down only marginally (less than 1%) on news of likely end to Vale strike in Sudbury, Canada
The provisional accord is for a five-year deal, Brazil’s Vale said late yesterday in a statement. The United Steelworkers union said in a separate statement it will vote on the settlement on July 7 and 8 in Sudbury, Ontario, and July 8 in Port Colborne, also in Ontario.
Motor industry giant Ford has set out the steps it is taking to reduce the carbon footprint of its supply chain in its “2009/10 Blueprint for Sustainability: The Future at Work”.
In May Ford set out plans to survey its 35 top global suppliers on their energy use and estimated greenhouse gas emissions. The 35 suppliers represent close to 30 per cent of Ford’s $65 billion in annual procurement spending.
“Suppliers play an important role as we look to reduce our overall carbon footprint and drive more efficiency in an energy constrained world,” said Tony Brown, Ford group vice president, Global Purchasing. “This initiative builds on our leadership in collaborating with suppliers and gives them a way to participate in solving an issue that faces our entire industry.”
China’s got a big – and growing – labor problem.
Recent workplace disputes in China have highlighted a growing and unexpectedly influential labor movement in the Asian country, leading some to believe Chinese society is making a fundamental long-term transition away from being the world's vast pool of cheap labor .
Companies who have relied on China for cheap labor have also begun to notice, and a small but growing percentage are now looking at moving operations elsewhere to cheaper labor markets such as Vietnam or India.
PG&E, California’s largest utility, announced that it would be auditing greenhouse gas emissions in its supply chain.
The market for carbon management software and services for the manufacturing sector is expected to grow by 33 percent annually from 2009 to 2017, according to “Carbon Management Software and Services,” a new study by Pike Research.
According to an executive summary of the report, Western Europe will remain the largest market for carbon management software until 2011, at which point it will be overtaken by North America. The market is expected to reach $124 million in size this year, and grow to $742 million in size by 2017. Global manufacturing accounts for about 40 percent of global greenhouse gas emissions, according to the report.
The report cited mounting pressure on manufacturers to report their emissions and improve on environmental efficiencies by large end customers such as Wal-Mart, Whole Foods, and Costco. Just recently, PG&E, California’s largest utility, announced that it would be auditing greenhouse gas emissions in its supply chain.
Steel Prices falling in North America
After climbing steadily for months, US flat product transaction values have started to decline as the market slows for seasonal reasons. Although domestic steelmaker’s production and capacity utilisation have continued to grow in recent weeks, sluggish demand has already caused Severstal N.A. and ArcelorMittal to announce outages in order to correct oversupply. Further output reductions could occur in order to protect prices as the year progresses. Even though there is virtually no foreign competition, transaction figures are likely to soften further in the short-term.
Most Nickel-bearing alloys of Stainless Steel e.g. 304 and 316 have a formula-pricing tie to Nickel. In North America, actual price changes are delayed by one month, as explained below.
On July 1st, the average price of spot Nickel in June was calculated to be $19,389 per metric ton ($8.795 per pound). The May average price was $22,008 per ton ($9.983 per pound). June was, therefore, 11.9% lower than May.
As a result, formula prices for most Stainless Steels will be lower beginning August 1st. The actual amount depends on the amount of Nickel in the alloy (e.g. 316 has more Nickel than 304).