ISRI’s Commodity Roundtables Forum is taking take place Sept. 22-24, at the Hyatt Regency Hotel in Chicago. The annual event attracts processors, brokers, traders, and other recycling professionals from around the world.
Moderated by Pickard, this session focused on the larger economic picture and how recyclers can try to prepare for what’s coming. Panelist Jason Schenker, president of Prestige Economics LLC, says the good includes:
- Low interest rates.
- Strong manufacturing and e-commerce.
- Economies in the major industrial nations rebounding from COVID-19.
On the flip side, Schenker says, are factors including:
- Lingering COVID-19 variants.
- Worldwide labor shortages and supply-chain disruptions.
“The stronger the economy, the less you’re concerned about conserving your cash, because usually the metals are moving,” he notes. “But in a weak economy, you might be sitting on a lot more material a lot longer, and you might have more to float.” Fred Penha, head of institutional sales and trading at StoneX Financial Inc., notes the recent volatility of copper and aluminum prices. “Commodities and base metals in general have actually broken off from other asset classes in terms of their volatility,” he says. “You’re facing price risks that are unique to your business.”
The panel also discussed the Biden administration’s continuing use of tariffs to rejuvenate domestic manufacturing, as well as recent saber-rattling between China and the U.S. on the global stage. Add to that the globalized nature of today’s commodities trading, and shipping issues—and the U.S. government’s difficulty in regulating foreign-flagged vessels—along with domestic political concerns, and price volatility and hedged contracts stay in the short term.
The ISRI 2021 Commodity Roundtables Forum concludes Friday, Sept. 24, with the Aluminum Roundtable.
Photo courtesy of ISRI.