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Each quarter, ProcurementIQ prepares an update that identifies the most significant recent macroeconomic trends affecting procurement professionals. ProcurementIQ's updates are intended to help these professionals better understand the broader purchasing environment and make strategic buying decisions. This quarter’s update focuses on commodity prices and trade.



After six months of consecutive declines, domestic aluminum prices increased marginally at an average rate of 0.4% per month from January to March, anchored by a recent uptick in demand. Meanwhile, domestic steel prices continued to display weakness because of a supply glut, falling at an average rate of 0.9% per month over the same period. Unlike aluminum prices, domestic steel prices exhibited significant volatility over the past three months amid fluctuations in supply, imparting considerable risk to industrial supply chains.

Notably, March marked the one-year anniversary of the imposition of tariffs on foreign steel and aluminum, which has contributed to an upward trend in prices. In fact, domestic steel and aluminum prices exhibited year-over-year growth of 10.3% and 2.2%, respectively. Lastly, domestic copper prices increased at an average monthly rate of 1.5% from January to March on the back of strong demand.

As tariffs on steel and aluminum remain in place and global trade concerns persist, ProcurementIQ anticipates that domestic metal prices will increase on average during the next three years, driving up prices for goods like metal shells & casings.

To mitigate their exposure to rising metal prices, procurement professionals can shift to substitutes or lock in long-term supply agreements.


Metal Pricing Trends Jan-Mar 2019


The oil glut of 2018 has officially ended. According to the US Energy Information Administration’s Short-Term Energy Outlook report for April, global production of liquid fuels fell short of consumption levels by an estimated 0.5 million barrels per day in the first quarter of 2019, the first shortage since Q4 2017. Recently, OPEC experienced declines in output as production slowed in countries like Saudi Arabia and Venezuela, thereby placing upward pressure on oil prices during the past three months.

However, this trend is anticipated to be short-lived. In fact, global production of liquid fuels is forecast to outstrip consumption over the next several quarters, yielding lower oil prices. As such, ProcurementIQ projects that world oil prices will decline at a modest average annual rate of 1.1% in the next three years.

Procurement professionals may benefit from lower prices in plastics and transportation markets.


Global Liquid Fuels Consumption

Key Takeaways:

  • Domestic aluminum prices trended upward from January to March, a reversal from last quarter
  • Domestic steel prices continued to decline, albeit with significant volatility
  • Tariffs on foreign aluminum and steel have caused domestic prices to exhibit YoY growth
  • Oil consumption outpaced production for the first time since Q4 2017; despite recent pressure, oil prices are projected to fall during the next three years amid oversupply



The trade war between the United States and China reached its ninth month at the beginning of April, underscoring continued friction between the two largest global economies. The United States has continued to impose tariffs on $300.0 billion worth of Chinese goods, which has mostly affected machinery and electronic components. Although tariffs on $200.0 billion worth of Chinese goods were scheduled to increase from 10.0% to 25.0% on March 2, 2019, the Trump administration indefinitely delayed its implementation as the two nations have continued to engage in negotiations. The Trump administration has not indicated when a potential deal between the two nations may occur.

Key Takeaways:

  • Despite a March 2 deadline, the Trump administration indefinitely delayed its implementation of further tariffs on $200.0 billion worth of Chinese goods


By: Braden Baseley, Senior Analyst, ProcurementIQ

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