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>>Rising Metal Import Costs Undermine Optimistic Outlook – BNY Highlights Significant Market Pressures

Rising Metal Import Costs Undermine Optimistic Outlook – BNY Highlights Significant Market Pressures

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about 3 hours ago

Market Contradictions and Rising Import Costs

BNY Mellon reveals rising import prices for industrial metals challenge bullish expectations despite strong demand from energy transition and manufacturing. Key factors include geopolitical disruptions, production constraints in major exporters, and currency fluctuations. These pressures increase manufacturing costs and strain corporate margins, diverging from long-term demand forecasts.

Copper and Aluminum Face Divergent Realities

Copper import prices in Europe and South Korea rose 18% YoY, conflicting with structural deficit projections by 2026. Aluminum prices remain elevated due to high smelting energy costs, while steel faces inflation from raw material and trade policies. Import costs now reflect immediate logistical challenges, not just future demand, complicating investment strategies.

Trade Dynamics and Investment Implications

Post-pandemic supply chains prioritize resilience over cost, increasing regional sourcing premiums and inventory holding costs. Environmental policies like the EU’s CBAM add further expenses. Investors must now monitor freight rates, regional premiums, and currency trends alongside futures prices to navigate basis risk and align portfolios with real-world supply chain pressures.