Recycled metals market heats up amid dollar strength and supply concerns

As July begins with a shortened week due to the July 4 holiday, significant economic data releases, including manufacturing and labor reports, are scheduled.

The June jobs report will be closely watched, as a robust labor market has thus far prevented the Federal Reserve from cutting interest rates.

U.S. construction spending fell by 0.1% in May due to higher mortgage rates, which have dampened single-family home building.

The U.S. dollar strengthened due to rising yields, impacting currencies like China’s yuan and Japan’s yen.

Benchmark 10-year Treasury yields increased, influenced by expectations of a Trump presidency potentially leading to higher tariffs and government borrowing.

As the dollar rises, U.S. recycled metal exports may become less competitive internationally, potentially reducing demand. Conversely, cheaper imports could influence pricing and supply within the U.S. recycled metals market.

LME prices have remained stable, with aluminum, tin, and nickel gaining modestly, while zinc prices rose significantly due to supply concerns.

Economic data and weak manufacturing indicators from China could lead to increased volatility in metal prices, emphasizing the need for vigilance in the scrap metals market.

Political developments in major economies could also impact trade policies, influencing the availability and pricing of scrap metals.

The U.S. Aluminum Association reported modest improvement in May’s extruded product shipments, and projects in Australia and Norway highlight the growing emphasis on sustainable sourcing and recycled materials in infrastructure.