Nov 26, 2024
As manufacturers and traders gather for Thanksgiving, there's something extra to be grateful for this year: several crucial industrial materials are trading at levels not seen in years. For forward-thinking procurement teams, this presents a rare opportunity to lock in favorable rates for 2025 and beyond.
The Holiday Special: Materials at Multi-Year Lows
The Ferrous Complex: A Complete Reset
The entire steel production chain is presenting compelling opportunities:
Scrap steel has retreated to its post-pandemic lows with HMS 80:20 trading at around $350/ton, offering upstream players like mills significant cost advantages
Hot-rolled coil (HRC) and steel rebar prices have pulled back significantly, with both finished products trading in their lowest range of the past 2-3 years
Potential Section 232 tariff adjustments are looming in 2025, so current entry points could provide firms with a critical advantage in their steel purchase costs over the next year
Stainless Steel: A Return to 2020
Stainless steel prices have retreated to levels not witnessed since 2020
This reset offers a strategic entry point for industries ranging from automotive to appliance manufacturing
With global capacity additions still months away, current prices present a compelling hedging opportunity
Battery Metals: The Electric Vehicle Slowdown's Silver Lining
The moderation in EV demand growth has created unexpected opportunities:
Lithium prices have experienced one of their most significant corrections in recent memory, trading below $9/lb (from highs above $80/lb just 2 years ago)
Cobalt trades well below its historical average, offering potential cost advantages for battery and electronics manufacturers
These pullbacks provide a rare chance to lock in critical materials for the electric future at attractive levels
Nickel: A Notable Retreat
Nickel has found a new trading range just shy of $16,000/ton, 30% lower than the highs of the year this spring
Current prices offer stainless steel and battery manufacturers an opportunity to secure forward requirements
The calmer market conditions present an ideal window for implementing strategic hedges
Cotton: An Agricultural Bright Spot
Cotton prices have maintained their downward trend through 2024
Current levels offer textile manufacturers and importers significant advantages in forward planning
The agricultural commodity stands out as particularly attractive relative to its historical trading range
Why This Holiday Season is Different
Several factors make this an exceptional moment for strategic hedging:
Broad-Based Opportunities: The simultaneous pullback across multiple materials creates portfolio-wide hedging potential
Policy Inflection Points: With trade policy reviews and environmental regulations on the horizon, current windows may be temporary
Technical Positioning: Market positioning suggests these levels could be sustainable entry points for longer-dated hedges
A Season for Action
While markets often offer selective opportunities, it's rare to see such a broad range of critical materials trading at multi-year lows simultaneously. Like a well-prepared Thanksgiving dinner, timing is everything – and current market conditions offer a feast of opportunities for strategic buyers to hedge and lock in historically attractive rates across categories, create competitive advantages to win new customer contracts, and build predictable cost structures for the coming years.
Making It Happen
At Pillar, we understand that identifying opportunities is only the first step. Our automated platform makes executing these hedging strategies straightforward and accessible for small and mid-sized manufacturers and import-exporters. We handle the complexities of market monitoring, position management, and risk assessment, allowing you to focus on your core business.
Ready to explore how these historically attractive levels apply to your business? Connect with Pillar for real-time pricing and to discuss implementing a strategic hedging program across your key materials.
Contact us at hello@pillarhq.com or visit www.pillarhq.com to learn more.
Commodity Interest Trading involves risk and, therefore, is not appropriate for all persons; failure to manage commercial risk by engaging in some form of hedging also involves risk. Past performance is not necessarily indicative of future results. Stratos Labs, Inc. is a registered Commodity Trading Advisor (CTA) and a member of the National Futures Association.