August 23, 2021 – Dollar, nickel and aluminum rose again today, Monday. After much speculation in the past week and the values on the commodity exchanges were so depressed, they are already picking up again at the start of the new week. The automotive industry seems to finally be coming out of its chips shortage by the fourth quarter of 2021, which should result in increased demand for steel and aluminum. And the logistics industry is actively lobbying against the upcoming European carbon border tax CBAM.
Dollar, nickel, aluminum: Monday with a strong start
As we had already anticipated in the last weeks, the short decline in commodity prices and the euro-dollar exchange rate was more a storm in a teacup than a real trend reversal. Little has changed in the general market situation.
After the swan song on the exchange rate pair euro-dollar, the euro has already gained again against the dollar on today’s Monday and is currently at EUR 1.00 to US-$ 1.1710.
Nickel futures in plus
The nickel futures on the LME and SHFE have also risen this morning. Currently, they are on the LME by about 2.12% in the plus and on the SHFE by 1.44%.
Aluminum futures continue to rise
On the LME, aluminum futures are currently up about 1%. On the SHFE, aluminum closed up 1.88%.
A little labor market, a little Corona pandemic, a lot of speculation
The other base metals also show largely positive. Overall, the past week seems to have been used for a lot of speculation on the commodity exchanges. The Fed info was a good hook for this. If last week the US labor market was still to blame for the decline in values, this week it is already used as a booster. A little bit are currently also the new Corona figures endeavored, but the economic demand remains high and positive.
Taiwan sees end of chip shortage coming
As we reported in early August, the semi-conductor shortage in the automotive industry should ease in the near future.
The Taiwanese government and the chip manufacturers there currently foresee an end to the semi-conductor chip shortage in the fourth quarter. According to current plans, the balance should have been struck there.
This should mean that carmakers can once again produce at full speed in order to clear the backlog of vehicle orders. This will have significant effects on consumption and demand for steel and aluminum.
Logistics sector: Resistance to EU carbon border tax
Resistance to the European Commission’s “Fit for 55” plans to reduce green house gases and net zero emissions by 2050 is growing in the logistics industry, specifically shipping and aviation, IHS Markit reports.
Logisticians don’t want to have to pay for ETS allowances
The main reason for lobbying activity against “Fit for 55” from the European Community Shipowners’ Associations (ESCA) and Airlines for Europe (A4E) is that shipping companies and airlines will have to buy allowances from the EU Emissions Trading System (EU ETS) for the first time from 2023, according to an analysis by think tank InfluenceMap. Previously, airlines and shipping companies were either generously exempt or were allocated ETS allowances for free, as were EU steel producers, for example.
EU heavy industry remains significant blockade to more ambitious climate targets
Influence Map’s analysis shows that heavy industry representatives such as Cefic (chemicals), CEMBUREAU (cement), Eurofer (steel), and FuelsEurope (refineries), continue to be a significant roadblock to more ambitious regulations targeting industry’s direct greenhouse gas emissions (e.g., through reforms to the EU Emissions Trading Scheme Emissions Trading Scheme) or energy consumption (e.g., Energy Efficiency Directive, Renewable Energy Directive, Energy Taxation Directive).
For example, Eurofer lobbies to ensure that EU steel producers are not only subsidized by market-protecting carbon taxes on foreign steel, but also continue to receive their ETS allowances for free in order to be able to bid competitively at all.
EC didn’t think CBAM through
“The problem of mankind is that things are not thought through to the end,” Thorsten Gerber, CEO of Gerber Group, quoted his favorite banker Alfred Herrhausen.
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