Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

By Bruce Shapiro


The US is now starting to confront a serious health crisis: Coronavirus (COVID-19). China has been fighting this virus since December 2019 and appears to be bringing it under control. There are fewer reports of new cases and deaths there. They fought the virus by shutting down large portions of the country with draconian measures. Many cities were quarantined and transportation was shut down. 


The US is just starting to fight the virus and has many issues to address, but the health issues come first. We also have a confidence crisis. When people are faced with the unknown, they react with fear, emotions, anxiety, and denial. Schools and workplaces are closing events are cancelled, and many people have changed or cancelled their travel plans. 


The public will get more cautious as more news make the rounds; cautious people rightfully protect themselves. Even though about 30,000 people in the U.S. die from the flu every year, COVID-19 is different because it spreads faster and is so new, we don’t understand a lot about it. Eventually, we will learn more and find ways to treat it. The question is, how long will this take? For now, we can pray for the best and take necessary precautions.


The recent economic data continues to look good. Nondefense capital goods new orders excluding aircraft, which is a proxy for capital spending, were up 1.1pc in January. The February information for employment, consumer confidence, National Federation of Independent Business [NFIB] confidence, ISM manufacturing, and construction were all positive. 


Car sales were lower in the US. In China, the Caixin and PMI dropped over 20pc due to COVID-19. European manufacturing was at a 1-year high and just under 50, which is still in contraction. Oil, which collapsed due to OPEC’s breakdown, has dropped 50pc from the start of the year. This could be viewed as positive for the world economy. The Federal Reserve cut the prime interest rates by 50 basis points and the forecast is for the number to go to zero, which is not a positive sign.


The Shapiro Nonferrous Volume Index measures the metal received from our Top 50 manufacturers. Both our February year-over-year and our February month-over-month indices were down 2pc. Aerospace, trailers, trucks, and HVAC are among the manufacturers trending down. The ones trending up were automotive suppliers and ship and boat builders. 


Metal prices for March have been relatively stable. All the prime aluminum prices are about the same. Aerospace turnings were up 3¢/lb this month due to a drop in volume and some increased orders for exported scrap. Copper was up slightly, and nickel was a little softer. Stainless steel prices were also about the same as last month, and steel prices were up $10/t. The demand for metals this month is good. So far this year metal prices have not been volatile, which is a very good sign considering what has happened in China. 


China’s economy is in recovery now. Their supply chain is coming back, which is very helpful for the world’s economy and for metals.

Our economy has been strong for 11 years and we have financial tools to help. The key issue is our health. We need to have more knowledge about how this disease works and how we respond to it. When we believe the virus is under control and we are not going to die from it, the world will return to normal. Until that happens, life will be volatile.


Don’t panic. Do prepare.


“Don’t make any predictions, especially about the future.”  -Samuel Goldwyn


 Work SAFE. Work smart. Profits will happen.



Bruce Shapiro is President, Shapiro Metals

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