Ulbrich Economic Update - Number 12 (May 2021)

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May 2021 Economic Update Executive Summary

New Cars in Production Line

The Americas

U.S. FIRST QUARTER GDP grew at a 6.4% annual rate, bringing the world’s largest economy within 1% of its peak, reached just before COVID struck. Industrial production rose 1.4% in March, and the capacity utilization rate gained a point to 74.4%. Manufacturing production was up 2.7%. The U.S. trade deficit jumped 5.6% to an all-time high of $74.4 billion in March amid roaring domestic demand. There were large gains in imports of motor vehicles. American goods exported vaulted 8.9%, boosted by shipments of motor vehicles, industrial supplies, consumer and capital goods and food. Factory orders grew at a slower pace in April, likely constrained by shortages of inputs amid pent-up demand. U.S. retail sales climbed 9.8% in March after falling 3.5% in the prior month. The broad-based rebound was led by motor vehicles, with receipts at auto dealerships surging 15.1%. U.S. employers added a modest 266,000 jobs in April and unemployment rose to 6.1% as more people entered the workforce. Consumer confidence reached a 14-month high in April as increased vaccination against COVID-19 and additional fiscal stimulus allowed for more service-oriented businesses to reopen.


THE GLOBAL SHORTAGE OF SEMICONDUCTORS CUT AUTO PRODUCTION IN EUROPE AND CHINA. The eurozone economy contracted by 0.6% in the 1st Qtr, reflecting restrained stimulus spending and a botched effort to secure vaccines that has left many major economies contending with restrictions on daily life. China’s economy grew a record 18.3% in the 1st Qtr from last year's pandemic low point, but economists estimate that underlying YOY GDP growth was about 5.4 percent.

Strand of DNA

Steel Industry Trends

STAINLESS STEEL SCULPTURE DROPPED IN MARIANA TRENCH WILL STORE DNA FOR 10,000 YEARS. A Danish artist worked with a team of engineers to create a unique, free-standing steel sculpture that acts as a time capsule and withstands the pressure of deep-sea conditions. The nano-engineered stainless steel outer surface does not interact with or contaminate the natural environment, while guaranteeing the integrity of the structure that protects its DNA cargo. The corrosion-resistant stainless steel structure will contain a sealed chest of hair and blood samples, and it will maintain its shining finish for millennia.

U.S. STEEL CANCELLED A $1 BILLION CAPITAL INVESTMENT PROJECT slated for its Mon Valley Works. USS said the decision was based on the company’s expanded focus on sustainability. Allegheny Technologies reported a $7.9 million loss in the 1st Qtr but anticipates improved demand for its jet engine products. The USW struck ATI’s Specialty Rolled Products locations March 30, a day before the end of the quarter. The strike is continuing after the union rejected ATI’s latest four-year contract proposal.

Highlighted Anatomy of Human Lungs

Medical Insights

‘SWEAT STICKER’ DIAGNOSES CYSTIC FIBROSIS WITHIN MINUTES. A Northwestern University-led research team has developed a novel skin-mounted sticker that absorbs sweat and then changes color to provide an accurate, easy-to-read diagnosis of cystic fibrosis within minutes. The soft, flexible, skin-like “sweat sticker” offers a stark contrast to current diagnostic technologies, which require a rigid, bulky, wrist-strapped device to collect sweat. Pfizer expects its COVID-19 vaccine to generate about $26 billion in sales this year, reflecting the shot’s growing role in the global vaccination campaign.

Automotive Industry Advancements

GM IS TESTING NEW TECHNOLOGY FOR ALUMINUM-BASED EV BATTERIES, including increasing the use of aluminum and aluminum alloys. GM continues to explore various technology solutions for its upcoming Ultium batteries. The batteries are expected to have a cell cost of at least $50/kW below current prevailing market prices with an operational life of at least one million miles and last up to 600 miles between charges. U.S. auto sales for April were expected to be the highest ever recorded for the month.

Thermal Propulsion Launcher Propelling Rocket

Latest Aerospace Developments

CONTRACT AWARDED TO DEVELOP NUCLEAR REACTOR TO POWER MISSIONS TO THE MOON. The Defense Advanced Research Projects Agency awarded a $22 million contract to General Atomics to design a small nuclear reactor for space propulsion. The project will attempt to demonstrate a nuclear thermal propulsion system in orbit. A nuclear reactor will heat propellant to extreme temperatures before expelling the hot propellant through a nozzle to produce thrust.

Metals & Commodities News

AA CALLS FOR CHANGES TO SECTION 232 TARIFFS, OTHER TRADE POLICY. The Aluminum Association (AA), representing U.S. companies that make 70% of the aluminum and aluminum-fabricated products shipped in North America, urged the administration to implement immediate and urgent reforms to Section 232 exclusion process. The AA claims that the current process has inadvertently made the U.S. a magnet for imports and actively incentivizes companies to turn first to imported aluminum products. Aluminum is a key component in making vehicles more efficient, medical devices lighter and packaging more recyclable.

Hydrogen Powered Train

Energy Sector Updates

FRENCH RAIL COMPANY ORDERS 12 HYDROGEN-POWERED TRAINS. French national railway SNCF has ordered 12 hydrogen-powered trains to begin tests in four regions in 2023 as it eyes a zero-emissions future with the nascent technology. They are designed to combine onboard hydrogen with outside oxygen via a fuel cell mounted in the roof that powers the motors. A fuel cell produces electricity from fuel (on the anode side) and an oxidant (on the cathode side), which react in the presence of an electrolyte.

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