• Stable lead times for most common gauges.

• The macro-economic environment has weakened significantly as growth fears rise, amid global inflationary headwinds.​
• Europe will likely enter a recession before the US and will take longer to recover, but material availability is lower shown by low inventories.​
• Off-exchange stocks are high, but the low liquidity, volumes and inventories indicates higher volatility and sharp moves.​
• ​Higher interest rates will slow growth, but the labor market is still strong and signs of weakness for employment will accentuate recession fears.​​
• End user demand is poor, and this should continue through Q4 2022.​

​

Iron Ore Monthly Price - US Dollars per Dry Metric Ton 

• No change in lead times for most common Aluminum and Copper types.​​
• As oversupply grows and low premiums prevail in China, more material will flow into Europe, which is currently experiencing high premiums and low inventory levels.

• Near term tightness in the copper market is expected to remain in the near term as supply-side cost and inflation increases persist.
• Demand is weakening across the globe.
• The bullish factors of power rationing and limited primary supply tightens the market.
• Monetary easing in China could indicate stimulus on infrastructure, grid and renewable energy.
• Uncertainty: the low inventories in Europe compound this issue, and the sanctions on Russia and lower exports of gas for Europe, which would create further volatility and lead to price spikes.

• Copper price was $7815.39/Ton in late August, down since March.​
• The aluminum price was $2373.50/Ton in late August, down since March.​

Copper, Grade A Cathode Monthly Price - US Dollars per Metric Ton

 July 2021 - June 2022: -426.360 (-4.51%)

Aluminum Monthly Price - US Dollars per Metric Ton

July 2021 - June 2022: 65.800 (2.63%)

WTI price is $92.5 per barrel as of August 31, 2022.​

• Polycarbonate​
• PC prices are forecasted to decline through the year end on lower demand. ​
• In North America, demand is slowing throughout the region in most of the end use industries. Exports to China (mainland) are down 14% YTD as China has brought online new capacity.​
• In Europe, the overall market demand is weak, partly due to the summer break and Eurozone difficulties (rising consumer price inflation, higher costs, lower consumer confidence and the disruption of energy supplies). Imports from Asia are continuing, taking advantage of the very high price points. Attractive shipping freight costs are facilitating imports from Asia too, delivered prices from Asia are lower than cost of production in Europe.​
• In Asia, producers must reduce inventory and are competing to sell more, thus PC pricing will remain soft. ​

• In North America, Covestro USA declared force majeure on PC and BPA production at Baytown, TX and extended lead times to 12 weeks in a letter dated May 17, 2022. Trinseo USA followed with a letter on May 18 announcing force majeure. Alternative supply of polycarbonate (from Asia) continues to be very limited as the shipping freights are high and the delivery times are long and uncertain.
• In Europe, the general situation in terms of oil prices and energy continue to keep pressure on costs for the producers.
• In Asia, the average PC prices are projected to edge down for Q3 2022. On the supply side, expect production to be in high level with newly launched producers Hainan Huasheng and Shenma.

• The availability for both nylon 6 and 66 had increased in August, amidst softer demand. Demand in luxury goods, automotive and housing markets remain lackluster, although automotive demand continues to drive the overall demand for nylon 66. Semiconductor shortages and supply chain impediments continue to hamper light vehicle production and is expected to continue into 2023.​
• Specialized pigments and flame-retardant grades continue to be expensive although there has been notable improvement with respect to glass fiber availability.

• Prices of copolymers and homopolymers are stable globally.​

• There are 2 additional supply lines due to the ramp-up in production from Heartland Polymers new plant in Canada and the Q4 2022 start-up of the ExxonMobil plant in Baton Rouge.​
• In North America, PP are expected to face more downward pressure in the fourth quarter as new volumes from both Heartland Polymers 525,000 metric ton plant and Exxon Mobil’s new 450,000 metric ton plant enter the market. ​
• Ebbing sentiment, falling demand and abundant supply defines the Polypropylene market in Europe.​
• In Asia, demand is also weak in the domestic market, prices continue to head south.​

• In North America, prices are expected to decline through year end. Slower demand, ample supply, lower production costs and lower ocean freight costs all point in the direction of lower ABS prices. But before lower prices can descend, buyers need to clear their inventories and resume buying. ​
• In EU, the overall market demand is weak, partly due to the summer break and the Eurozone difficulties. Supply is adequate from the European producers, imports of material from Asia are increasing, due to the ongoing very attractive price arbitrage window. Lower (than before) shipping freight costs are facilitating imports from Asia too. Delivered prices from Asia are lower than the cost of production in Europe. ​
• Supply from Asia is rising as China’s economy slows with Covid lockdowns. Prices in Asia continue to decline. The production of most major home appliances and consumer electronics remained weaker than the previous year.  ​

Resins Price Forecast - North America 

Resins Price Forecast - Western Europe

Resins Price Forecast - Asia Pacific 

Polycarbonate

Source: IHS Markit

ABS

Source: IHS Markit

• No demand problems are foreseen on packaging products during the following months. Lead times have started to normalize.​
• It is expected that producers will slow their machines, send more linerboard to export markets, and extend maintenance downtime.​
• Some containerboard producers were selling sheets on the open market because their own box plants didn’t need the containerboard for lack of demand. However, they expect to see an increase in demand during September 2022, which should stabilize the market.​

• Slower demand over the past quarter (lower volume of boxes) along with high inflation is slowing the supply chain for boxes and spiking the level of inventory at box plants. ​
• Downward pressure is predicted to accumulate in 2023-24 as sluggish demand growth will not cover mounting capacity additions.​
• Forecasts show pricing will begin to slip by the end of 2022. Downward pricing pressure will persist into 2024 given that demand is not expected to grow quickly enough to fully absorb the new capacity over the next two years.

• US Containerboard - Domestic kraft and recycled linerboard prices remained unchanged.​
• SBS (Sulfate Paper) - Price increment is expected in September for this type of materials, mostly used on pretty boxes, This would be an impact on all products we purchase for customers in the consumer space.​
• The baseline pricing outlook for US containerboard does not show any further gains in this price cycle, with stable prices in the third quarter and erosion beginning to set in by the end of Q4 2022.​

Other Packaging Material Trends 

Other Packaging Materials Trends- US- Lumber 

The supply of solder seems stable right now. The principal mining companies are producing at regular levels recovering from the lockdowns suffered in January of 2022. They are able  fulfill the needs of the market, especially the Chinese demand. China tin consumption is around 49% of the global consumption, 9% more than their local production of this metal. However, due to the lockdown in key Chinese cities, the global demand is constrained providing relief to the global supply chain.​

• In the second quarter of 2022, China’s GDP expanded by just 0.4%, its slowest growth rate in two years, shrinking by 2.6% compared to the first quarter. Lockdowns and weakening consumer confidence will continue to restrict economic growth in the third quarter, this slowdown is affecting solder demand allowing a superficial point of stabilization.  In July, Chinese manufacturing activity contracted. Declining production of ferrous metals, coking coal and oil are primarily responsible for the recent contraction.​
• China’s lockdowns have also impacted the real estate sector, as economic growth has slowed, property sales have decreased, reducing income for developers in need of funds to finish housing and infrastructure projects. These developments continue to shake consumer confidence and demand and production for both industrial and consumer goods.​
• Covid cases in China have continued to climb, with new lockdown measures implemented in July impacting over 40% of all Chinese companies. Major manufacturing hubs such as Shanghai, Wuhan and Shenzhen are at risk of more severe restrictions and lockdowns.​ ]

• The risk of hikes in demand for metals used in soldering is high and that explains why  the solder companies are looking more and more to waste management and solder dross recovery. China who has focused on recovery of solder to minimize the number of high pollution issues. ​

• Solder companies have good long term capacity availability however, we must remain cautious as we consider the potential impact caused by any global conflict specially between China and US. 

• The solder companies are focusing their strategies to supply solder paste, fluxes, and wire solder. This is due to the higher margins and opportunities in these types, this differs to solder bar for which costs are mostly metals and the results of a simple ingot process. 
  
  
  
  

• The risk of hikes in demand for metals used in soldering is high and that explains why  the solder companies are looking more and more to waste management and solder dross recovery. China who has focused on recovery of solder to minimize the number of high pollution issues. ​
• ​Solder companies have good long-term capacity availability however, we must remain cautious as we consider the potential impact caused by any global conflict specially between China and US. ​
• The solder companies are focusing their strategies to supply solder paste, fluxes, and wire solder. This is due to the higher margins and opportunities in these types, this differs to solder bar for which costs are mostly metals and the results of a simple ingot process. 

• Due to the low margins on the metals which are the biggest cost drivers of solder bar, suppliers are focusing their strategies in growing their business in Solder paste and wire. This is due to better margins in fluxes and labor. ​
• Metal production is recovering from the low point in 2021. However, metals investors to hold a cautious position due to the invasion of Ukraine and Chinese lockdowns. ​
  • Tin and Silver has stabilized; however, they are very sensitive to any geopolitical and market conditions. ​
• Russia is a major producer of non-ferrous metals, ranked in the top 10 producing nations for both nickel and copper. The prices of these commodities, as well as other key non-ferrous metals, have been experiencing high levels of volatility as fears of supply being cut off due to the conflict.​
• Automotive and electrical vehicles continue as key contributors to the growth in the demand of the solder industry. The zero emission targets set for 2050 continues and this industry is accelerated every year thanks to the stimulus from a lot of large countries (USA, Europe, China). ​
  • Solder companies such as Alpha and AIM have focused complete departments to attend to this high demand and emerging industry. ​​
  • The most requested solder is the LF SAC 305 and the SAC 307 due to its capability to work in high temperature environments. ​​
  • The demand from EVs companies is aggressive and requires high quality and automated processes. This is challenging manufacturers and resulting in additional investments in innovation and R&D. 

• Solder Scrap Market:​
  • Solder recovery techniques has seen several improvements and new technology has allowed the suppliers to recover large portions of solder scrap. ​
  • The demand constraints in the mines has motivated the suppliers to invest in recovery centers and bid aggressively to buy solder scrap from their customers and others. ​
  • The recovery also allows them to control margins and reduce the dependency on the mines and the impact of price fluctuations. 

• As mentioned above, metals seems to be in a bubble of stabilization. The most used metal, Tin has lowered in value to $23 - $27 per kilogram. However, it remains very sensitive to the market and geopolitical factors. The new Chinese lockdown is affecting demand. Once China recovers from this, the demand will hike and ultimately impact price and supply. ​
• The supply variations in the metals market directly affects the solder industry due to the high usage of metal. The top alloys use more than 90% of tin in their composition, and even though it is not the cost primary driver due to the high value of silver, it has a big impact in both price and supply. ​
• Although cost is reasonable now, we need to keep a close eye on this metal. 

• "Tin has been a poster child for the boom we've had in consumer electronics over the last two and a half years...For tin to fall further, people will need to short (sell) tin," said Macquarie analyst Marcus Garvey.​
• Silver is a precious metal of low usage but high cost in the lead-free alloys. This is thanks to their anti-corrosion, leak tight, conductivity and higher melting point.  ​
• Silver is a metal used in times of uncertainty, however currently the value is over the $18 per ounce, this level has not been seen in 2 years and experts thinks this is due to the actions taken by the US Federal Reserve to control inflation. 
  
  
  
  
  
  
   
• Top alloy costs are in a relatively good position right now, far away from the hike reached in March, however, several factors affecting the global markets could impact positively or negatively the price. ​
• Buyers should take a “wait and see” position as the metal investors are. Hedges on metals should be conservative and just enough to cover 1-2 months of supply. ​

Any significant buy would be highly speculative and could result in losses. ​

 
 

• The price of nickel surged, nearly doubling in the week of March 8, 2022,  to nearly $100,000 per metric ton. This surge resulted in the London Metal Exchange suspending trading, which effectively brought the nickel market to a halt.​
• Other key non-ferrous metals have been surging in price as well, however, these surges have not been as dramatic as the rise of the price of nickel. Copper and tin both surged to record highs, with tin increasing by around 25% since the beginning of the year, while copper has risen in price by nearly 10% in this period.​
• Even as these metals begin to come down slightly from their record highs, commodities experts predict the prices of these metals to remain high in the short to medium term, as supply worries persist.
  
      

• Supply will continue to be at risk for the next three quarters. Review inventory and safety stock calculations to protect your supply.
• Follow the raw materials indices closely. Focus on the key raw materials for the solder you consume (predominately tin, silver and copper). Take a “wait and see” position, and if you prefer to speculate on futures, proceed with caution and be conservative.
• Invest in testing alternative alloys. SAC 305 is the most widely used alloy in the industry but consider SN100C if your buying position is weak to avoid shortages due to high demand.
• Identify your supplier’s manufacturing locations and develop sourcing strategies to improve supply lines. Consignment, VMI, and buffer inventory are good models to explore.
• Strengthen your relationships with key suppliers but find alternative sources. It’s a good time to forget about the name on the solder and focus more on the content and performance itself.
• Investigate solder recovery technologies. Using MS2, you can recover almost 60% of solder scrap material. This could bring improved commercial benefits and provide another option for supply.