Welcome to the Q3 2024 Mechanicals Commodity Intelligence Report.

This report provides a comprehensive analysis of 8 essential mechanical commodities.  Jabil's commodity experts leverage their industry knowledge and global supplier network to deliver this in-depth yet concise market overview.

As a backdrop to all commodities markets, the global economy is experiencing a slowdown, with growth forecasts revised down to around 3% for 2024 and 2025. This slowdown varies regionally, with some areas like Europe and South America facing higher recession risks due to inflation and political instability. Conversely, sub-Saharan Africa and parts of Asia, particularly India, are expected to see more robust growth. Several factors contribute to this overall trend: tightening financial conditions, ongoing geopolitical tensions, and lingering impacts of the COVID-19 pandemic, especially in China. Nevertheless, positive signs are emerging.  Inflation may be peaking in some countries, suggesting central banks are nearing the end of their interest rate hikes.  Additionally, "nearshoring" and "China+1" strategies are gaining traction as companies seek to diversify their supply chains. These dynamics undoubtedly influence the mechanical commodity markets with varying degrees of impact.

• Metals: Overall demand is improving, driven by infrastructure, renewables, and critical sectors for aluminum (beverage, automotive, aviation). Copper prices are surging due to tight supply. Steel demand varies by industry. Russian sanctions impact trade flows and prices.

• Resins: Crude oil prices have risen, impacting the entire petrochemical chain. Resin demand is mixed but generally stable. Supply is adequate, with some potential disruptions.

• Packaging: Plastic packaging is competitive, with resin costs impacting pricing. Consumer demand and sustainability trends influence pulp, paper, and linerboard packaging.

• Die Cut: Challenges include M&A activity, MDI shortages, and rising raw material costs. Opportunities exist in automotive touch screens and protective film markets.

• Lenses: Mobile devices dominate, with automotive growing rapidly. Supply is stable, and raw material costs for glass are stable. Resin costs for plastic lenses are higher.

• Batteries: There is strong demand for EVs but weak in consumer markets. Ample supply allows for potential price reductions. Key future drivers are sustainability and technology competition.

• Cables: Growth in EVs, renewables, and semiconductors is offset by contraction in construction and telecom. Despite soft demand, cable prices have increased due to surging copper costs.

• Power Supplies: Demand for EV and IoT modules is rising. Industry standards influence charger design and can create temporary demand surges. Conventional power supplies are weaker, with some production shifting from China. Supply and pricing are stable, but copper cost increases are expected to impact prices eventually.

• Displays: The market is transitioning towards AMOLED technology, larger sizes, higher resolution, and more touch screens across applications.

The Jabil Commodity Management team continually monitors these markets and supports our partner network to help ensure supply continuity and optimize cost.  Please get in touch with any of us with questions or issues for which you may need additional support.

Yours sincerely,

    Keith Lapinski 
    VP, Supply Chain

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