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Market Update

The Material Report #009

The rally is splitting up

For most of this year, every metal in this report moved the same way, higher. The last two weeks broke that pattern. The metals are sorting into winners and losers, and which side each one lands on changes what you should do about it.

Start with tungsten, the clearest turn. The panic that drove your insert prices all spring is unwinding at the source. APT, the tungsten precursor behind your carbide tooling, is down by more than half from its peak in China. Europe hasn't followed, still up around 240% on the year, which is why your Kennametal and Sandvik invoices haven't come down. But the raw material that started the run is deflating, and that tends to reach the downstream price eventually.

Copper is the one to watch hardest if you're buying. It set a record of $6.69 per pound on May 13, then fell back toward $6.30 by late May as ceasefire talk picked up. The record run was built on traders rushing metal into the U.S. ahead of a possible copper tariff. U.S. warehouses now hold about 500,000 tonnes of copper, roughly half the world's exchange stock, and that was a one-time stockpile, not steady demand. Goldman Sachs said plainly that the price has run well ahead of real supply and demand. None of that means copper drops tomorrow, but a record price built on everyone stocking up at once usually doesn't hold.

Aluminum is mixed. LME aluminum hit $3,680 per tonne on May 26, the highest since March 2022, and the near-term market is tight because Gulf supply got knocked out by the war. That same tightness is the war premium, and it comes back off if the fighting winds down.

Steel sheet hasn't gotten the memo. Nucor took hot-rolled coil to $1,095 per ton on May 26, its 25th straight weekly increase, and nothing in the data points to a reversal. If you run a lot of sheet, you're still in a rising market while copper and tungsten buyers are watching theirs roll over.

Here's why the split matters for your shop, not just the trading desks. If you're about to lock a twelve-month fixed-price deal on copper or brass at these levels, you're locking near a record with a ceasefire pending and warehouses overflowing. The downside is bigger than the upside there. If your contracts allow it, keep copper and aluminum buys shorter this quarter, and treat steel sheet differently, since that one's still going up.

The wildcard under all of it is the war. On May 23 the administration said an Iran deal was "largely negotiated," a framework to reopen the Strait of Hormuz and pull back the blockade. It's a framework, not a signed deal, and Iran is disputing the terms. If it holds, the premium under aluminum, copper, and diesel deflates within weeks. If it falls apart, all three stay high.

Freight: the cost you're not watching

While everyone tracked hot-rolled coil and copper, the freight market flipped. The trucking recession that handed you cheap, easy capacity for two years is over. Spot truckload rates are running 20~33% above last year, more loads are chasing each available truck than at any point in four years, and flatbed rates, the ones that matter for steel and heavy stock, hit their highest since August 2022.

The driver is diesel, up about 55% on the year on the Hormuz disruption. Carriers are parking trucks and turning down unprofitable loads, and the gap between spot and contract rates that used to protect shippers has nearly closed.

For your shop, this shows up as higher delivered cost on material that already costs more at the mill. The number to watch isn't just the price per pound, it's the freight line on the invoice. If you've been buying on spot or letting carrier relationships lapse, this is the quarter to lock committed capacity instead.

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Pricing notes

Steel sheet: $1,095 per ton as of May 26, lead times steady at 3~5 weeks.

Steel plate is the odd one out. Nucor held plate flat while SSAB raised $40 per ton. Both opened July order books with a June 5 deadline, so if you need plate for July, get the PO in before then.

Stainless surcharges rose for June. Nickel climbed back through late May, and since the alloy surcharge moves with the nickel price, the 304 and 316 surcharges came up with it. You'll see it on your June stainless invoices.

Copper, aluminum, and tungsten are covered up top. Brass and bronze (C260, C360) held flat late in the month rather than following copper off its high.

Tariffs: the 10% baseline you pay at the border expires July 24, but don't read that as relief. Replacement tariffs are being lined up to take effect before then, and the 50% steel, aluminum, and copper duties now apply to the full value of imported parts, not just the metal in them. If you import tooling or stock, check what each shipment actually costs to bring in over the next eight weeks rather than assuming last month's rate.

What I'm watching

A few dates over the next several weeks. June 1 brings the ISM input-cost reading, the clearest signal of whether shops are still paying up for material or starting to push back. June 5 is the plate order deadline. June 30 is the copper tariff decision, which sets whether copper stays expensive here or the U.S. premium fades. And the ceasefire is the one to watch hardest, since it swings aluminum, copper, and diesel all at once.

One caution on the factory headlines. The S&P Global index hit a four-year high in May, but most of that was shops stockpiling ahead of price increases, not new orders. Order growth actually slowed to a two-year low underneath it. If you're weighing a hire or a new machine off those numbers, look at your own backlog first.

If your copper or carbide quotes keep climbing while these indexes say they're turning, hit reply and let me know. What you're seeing on your invoices tells me more than the screens do.

Sources

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Twice-monthly benchmarks, trend analysis, and market context written for shops and small buyers.

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Eric Na writes The Material Report, a bi-weekly newsletter on metal pricing trends for machinists and shop owners.