For a snapshot of how COVID-19 has impacted the commodities market, picture copper. Last March, copper prices dropped to their lowest level since January 2016 amid investors’ global panic over the coronavirus, which was rapidly reaching pandemic status. In May, copper prices experienced an uptick as lockdown measures were eased around the world and there was an easing of trade tensions with China. Prices fell again at the end of June amidst worsening concerns for the global economy. In all, The Wall Street Journal reported, in a ten-week period, copper prices fell in eight of them.
Copper is Midwest Industrial Metal’s most in demand and most handled metal. Because of its many uses in consumer products and in construction (and that’s only the c’s), copper is widely considered to be a barometer for the world’s economy. When the pandemic hit, many companies were forced to slow down production or completely shut down and the level of consumption crashed. In relation to copper specifically, demand has slipped, which has in turn led to a backlog and that has hit copper prices hard.
We are one of the designated essential companies that were deemed important to the welfare of the country and were allowed to continue to operate. But our volumes were considerably less because companies had slowed operations or stopped operating altogether.
With companies gradually coming back and doing more business, our volumes are increasing. Going forward, it is a matter of adjusting to what businesses think they can accomplish with all the restrictions that come with the virus. For example, pick ups have been curtailed or stopped altogether to halt the spread of COVID-19.
Last May, it was reported, Michigan residents held $50 million worth in unredeemed beer, pop and other bottles and cans with 10-cent deposits that had been accumulated over the previous two months after the governor halted redemption at grocery stores and other outlets because of the pandemic. This affected the mills because they weren’t getting the normal supplies they would receive through their recycling program.
We were busy for two months once COVID-19 hit until a slowdown because of the backlog; little was being generated because most everything was at a standstill.
People may forget that commodities are a world-traded market. A lot of our copper goes to China. Therefore, if China is deciding to not do anything with copper and they’re representing as much as 50 60 percent of the world’s consumption of copper, that has an effect, even though we may be busy in the United States.
In these uncertain times, the only thing we can do is call our shots. We buy and sell everyday. We just keep on going.