March 21, 2023

Forces Influencing Commodity Pricing & Availability Key to Fleet Industry

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AF Editor Mike Antich offers his insights on the current fleet market in the 137^th State of the Fleet Industry video, produced by Automotive Fleet.

🎙Today's topics include:

In the automotive sector, demand for aluminum has softened due to component challenges in the automotive, medium-duty truck, and heavy-duty truck segments, which has created a slight relief in prices.
There is a strong influx of aluminum orders from Boeing and Airbus, which will lengthen lead times for the balance of the year. Production constraints for stainless steel has lengthened lead times to 50-80 weeks for delivery.
The ongoing war between Russia and Ukraine will continue to exert upward pressure on commodity prices due a decrease in product availability since both countries were strong exporters of aluminum and steel. In addition, ongoing tariffs on Chinese steel will put upward pressure on prices.
The increased expenditure of munitions in Ukraine war has decreased munitions stockpiles in major industrial countries by 10-12 years. Pressure will mount to replenish stockpiles, putting upward pressure on brass and copper used in ammunition and heavier munitions and aluminum and stainless steel used in military equipment and missiles. Anticipation that these pricing pressures will begin at the start of 2024 calendar year.

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⌚ Timestamps ⌚ 0:00 Intro 2:25 Competition for Aluminum Supply Between Aviation & Auto Industries 4:20 Pricing Trends for Aluminum 5:42 Recessionary Pressures on Future Commodity Prices 7:35 Impact of Increased EV Sales on Price of Copper 8:42 Commodity Price Pressures Restocking Equipment/Munitions Sent to Ukraine 9:56“On-Shoring” Migration to North America to Drive Commodity Availability and Increase Costs