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July 2021 Economic Update Executive Summary
U.S. NONFARM PAYROLLS GAINED 850,000 JOBS IN JUNE, as U.S. companies hired the most workers in ten months. The IMF’s growth projection for the U.S. for 2021 was increased sharply to 7.0% from a 4.6% forecast issued in April, due to unprecedented fiscal and monetary support. Durable goods orders rebounded 2.3% in May after falling 0.8% in April, lifted by a sharp 7.6% rise in orders for transportation equipment. Orders for motor vehicles and parts rose 2.1% after decreasing 8.1% in April. U.S. consumer confidence increased in June to its highest level since the COVID-19 pandemic started more than a year ago, bolstering expectations for strong economic growth in the second quarter. Consumer prices continued to climb strongly in May, surging 5% from a year ago, the highest annual inflation rate in nearly 13 years. The Federal Reserve signaled it expects to raise interest rates by late 2023, sooner than it anticipated in March, as the economy recovers rapidly from the effects of the pandemic and inflation heats up.
EXPANSION IN CHINA’S FACTORY SECTOR SLOWED IN JUNE, as export demand weakened and supply bottlenecks held back production. The Aussie government rejected an application to build the world’s biggest renewable energy project, warning that the A$50bn green hydrogen export project threatened sensitive wetlands and migratory bird species. EU legislation is being prepared that would jolt the rules of international trade by taxing imported goods based on the greenhouse gases emitted to make them.
Metals & Commodities
HIGH-QUALITY COKING COAL DELIVERED TO CHINA ROSE ABOVE $300 A TONNE for the first time since 2017, up 150% since October, due to a supply squeeze that has left steel mills scrambling. China will sell major industrial metals from state stockpiles to squelch price increases that have hit a 13-year high and are stoking fears of global inflation. China’s latest move targets copper, aluminum and zinc with public auctions to domestic buyers.
Stainless Steel Updates
NORTH AMERICAN STAINLESS DECLARED FORCE MAJEURE AT ITS GHENT MILL due to insufficient supplies of the industrial gases it needs to operate. The company declared a suspension of all performance obligations as well as indefinite delay of any and all further deliveries from the Kentucky plant. Stainless steel was already in short supply. Mill delivery lead times are out several months and service centers have been unable to secure enough material to meet demand. ATI and the USW reached tentative agreement on a four-year contract covering 1,300 workers at nine facilities who have been on strike since March 30.
INFLATABLE STEEL FURNITURE PAVES WAY FOR EVEN LIGHTER INFRASTRUCTURE. A design team has perfected a method of creating inflatable steel furniture which could revolutionize the wind-energy, space and construction sectors. The technique as a way of making steel-built products lighter and less expensive without compromising on strength.
MANY SENIOR EXECUTIVES FEEL THREATENED BY AI – “TOO NEW TO BE TRUSTED”. According to a new Pactum survey of 100 senior executives, 97% said they plan to invest significantly in artificial intelligence this year, with 83% of respondents saying they will spend over $500,000 on the technology. Of that group, 10% anticipate spending over $50 million. However, according to a recent Forrester study, more than half of respondents (52%) said AI is too new to be trusted.
RESEARCHERS DEVELOP A WIRELESS IMPLANTABLE SENSOR SMALL ENOUGH TO BE INJECTED. The device was made to be injected into humans and monitor various biological parameters. To keep it small (less than 0.000006 in.3 making it the smallest such system ever made), the team designed it to communicate and be powered wirelessly by ultrasound. The Biden administration will pump $3.2 billion into developing antiviral treatments that have the potential to combat COVID-19 and other virus-borne diseases. The money is to be put towards speeding up clinical trials, as well as the manufacture of medicines.
Automotive Industry Advancements
GM WILL BOOST SPENDING ON EVS TO $35 BILLION THROUGH 2025, an increase of 75% from March 2020 before the COVID-19 pandemic shut down the industry. GM will also pull ahead plans for completing two U.S. battery plants. Volvo Cars will be the first carmaker to secure SSAB steel made from hydrogen-reduced iron from the HYBRIT pilot plant in Luleå, Sweden.
Energy Sector News
A CANADIAN FIRM WILL BUILD A DEMONSTRATION FUSION REACTOR 70% the size of a full-blown commercial one. Existing nuclear power plants rely on fission—the splitting of heavy atoms, usually of uranium, into lighter ones. Fusion plants attempt to do the opposite, generating heat by combining light atoms to make heavier ones. First Solar Inc. will invest $680 million in a new Ohio factory in one of the largest bets on domestic solar manufacturing since China began dominating the industry a decade ago.
Latest Aerospace Developments
CHINESE ROVER ON DUSTY, ROCKY MARTIAN SURFACE TAKES GROUP PHOTO. The Martian surface and a Chinese rover and lander bearing small national flags were seen in photos that the rover took on the red planet. The four pictures also show the upper stage of the Zhurong rover and the view from the rover before it rolled off its platform. United Airlines will purchase 200 Boeing 737 MAX jets and 70 larger Airbus A321neos, a deal worth $33 billion at the most recently published list prices.
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