Like any other market, the metal market undergoes significant changes depending on the processes taking place in the global economy. The crisis processes caused by the COVID 19 pandemic not only affected demand, causing significant damage to producers and consumers, but also destroyed many well-established and traditional cargo flow charts. Everything is changing, the market is unbalanced. Nevertheless, both metallurgists and traders understand and are ready for an increase in demand for the metal. Since 2020, there have been processes in the world that allow us to expect positive changes. The overall shortage of steel products continues to be a reality. It will also stimulate demand for metal in the coming years. The industry cannot be without metal and our task is to keep our finger on the pulse, keeping calm and ready to work and a clear understanding of the market conditions of our products.

Even now, we can note a sharp rise in the price of appliances and household goods. The reason for this is the trend in demand for metal and, accordingly, the increase in prices for it.

The demand growth, which is backed by a whole set of factors that stimulate the process:

First, we can state that the cycle of price decline has ended and the cycle of growth has begun.

Secondly, the rise in commodity prices is clearly stimulated by the collapse in oil prices caused by the pandemic and the various types of sanctions that are used in the trade wars that have broken out.

Third, growth is driving demand for raw materials in developing countries.

Fourth, the increase in demand is affected by numerous work stoppages by large mining and processing enterprises due to strikes and natural disasters.

The trade wars themselves, especially between China and the United States and the United States and Russia, have an extremely painful effect on the economy and lead to the destabilization of well-established processes, changes in tax policy and lead to the emergence of a shortage, an increase in demand and prices.

The widely introduced Agenda 2030 plan and the transition to green energy also stimulate demand, since in order to save the planet and stop the processes of climate change on it, which, according to the UN, is caused by human activity, all countries of the world must forcibly introduce measures aimed at reducing carbon emissions and switching to renewable energy sources. The roadmap with the first goals has already been defined by the UN until 2030.

These global changes require the industry to modernize the entire production process. Huge areas will be given over to wind turbines, solar panels and backup energy sources. Charging stations for electric vehicles will be placed everywhere in connection with the transition to alternative fuel. This requires huge investments and huge expenditures of raw materials, including, first of all, metals... in the form of power lines and hundreds of thousands of kilometers of wires. To bring all this to life, unthinkable volumes of copper, steel, aluminum and rare earth metals are needed, and this cannot but stimulate the growth of prices for them.

The seventh factor that has clearly stimulated demand and prices is the economy's response to COVID-19.

Due to quarantines and lockdowns a significant number of metallurgical enterprises stopped their work and stopped production, stopped collecting scrap metal. All this has led to the fact that the market has formed a terrible shortage of metal, in particular – copper and steel.

The weakening dollar has sunk in price against many currencies. The euro, the yuan, the Swiss franc and the Australian dollar rose to record highs.

Since commodities are traded for dollars on the world stage, everything has risen in price: both ferrous and non-ferrous metals, as well as oil and gas.

The ninth important factor that influenced this process is the delayed demand for raw materials after the first wave of quarantines.

These are the realities of today, which we see when working with analytics and tracking ongoing processes in real time.

Be with us, be informed. Our team is your reliable partner.

Yours SUMMIT CAPITAL