I’ve belabored the plight of the downtrodden oil market enough to communicate the point that the foundry world, especially as it pertains steel castings and ductile iron castings (and to some extent gray iron), is suffering under the weight of low oil prices.
However, the entire commodity picture is a bleak one. In light of the contracting manufacturing market in China, the commodity picture is still bleak. China has the kingpin of commodity consumption in the world, and as their manufacturing sector dips, the ripple effect touches all commodities. Paper, plastic, metals…you name it, they are down. It’s good news for people buying those raw materials, but rarely if ever is a buyer not also a seller who depends upon stability in the underlying markets.
Now, China has embarked on a round of stimulus which should create a burst to commodity imports, so there are plenty of economists who are hopeful that we’ve found a bottom. Until China truly rebounds though, commodities will continue to hover near the bottom of the barrel.