Ulbrich Economic Update - Number 19 (December 2021)

View the December 2021 Economic Update Issue

Get the Full December Issue:

Click here to download the 16 page Economic Update for the full details of recent economic trends impacting the steel and commodities markets, as well as the associated industries across the globe. Continue reading below for the Executive Summary.

December 2021 Economic Update Executive Summary

Global Economy

The Americas

THE U.S. ECONOMY ADDED 210,000 JOBS IN NOVEMBER, but job openings surged by 11 million in October, suggesting a recent moderation in employment growth was due to a shortage of workers rather than ebbing demand. The U.S. trade gap plunged 17.6% in October as exports soared to a record high. Trade may contribute to GDP this quarter for the first time in more than a year. U.S. import prices climbed 1.2% as the costs of petroleum products and food spiked. Production at U.S. factories surged 1.2% to its highest level since March 2019. Output at auto plants rebounded 11.0% after declining for two straight months. Consumer spending rose 1.3% in October, while personal income increased 0.5%. Consumer prices accelerated 0.9% as Americans paid more for gasoline and food, leading to the biggest annual gain (6.4%) in 31 years. Prices for new vehicles jumped 9.8%. Gasoline prices shot up 50% from a year ago. Durable goods orders fell 0.5%, depressed by a 2.6% drop in orders for transportation equipment. Orders for civilian aircraft tumbled 14.5% after plunging 31.2% in September. U.S. services industry activity unexpectedly rose in November, hitting a fresh record high.


JAPAN’S ECONOMY SHRANK AT AN ANNUALIZED RATE OF 3% DURING THE 3RD QTR. Global supply chain disruptions and a resurgence in COVID cases cut spending by consumers and businesses. Eurozone business activity strengthened in November, but record inflationary pressures and surging COVID-19 cases weighed on the outlook. India and South Korea are experiencing shortages of urea, which is produced using coal, since China placed new restrictions on exports. Urea is widely used in India as a fertilizer and in South Korea to produce urea solution, which is used to reduce diesel emissions in vehicles and factories.

big aluminum coils

Steel Industry Updates

TARIFFS ON JAPANESE STEEL AND ALUMINUM MAY BE EASED BY THE WHITE HOUSE. The administration announced a plan to start negotiations with Tokyo on easing the tariffs, with a goal to set up an arrangement to allow some Japanese metals to enter the U.S. tariff-free. Stainless steel pricing remains strong as buyers contend with a tight U.S. market. The base price announced in October has been fully accepted into the market and, combined with higher alloy surcharges, lifted all November prices more than 3%. Service centers have built some stainless inventory, closing October with 386,300 tons, up 11.6% from a year ago.

Metals & Commodities

CHINA APPROVED THE CREATION OF ONE OF THE WORLD’S LARGEST RARE-EARTHS COMPANIES to maintain its dominance in the global supply chain of the strategic metals as tensions deepen with the U.S. The LME aluminum cash price averaged $1.20/lb in November, down from October’s average of $1.34. Traders reduced the MW premium to $0.29/lb. Because of the decline in both the LME aluminum ingot price and the MW premium, mill products will decline by about $0.20/lb in December.

Hydrogen powered trucks

Automotive Trends

GENERAL MOTORS IS SEEING A BETTER FLOW OF SEMICONDUCTORS, as its assembly plants in North America are now back to running regular production. Ford entered into a strategic agreement with U.S.-based semiconductor manufacturer GlobalFoundries to develop chips, a pact that could eventually lead to joint production. Manufacturers of large trucks and commercial vehicles are beginning to embrace hydrogen fuel cell technologies. Toyota, Kenworth and the Port of Los Angeles have begun testing hydrogen trucks to haul goods from ships to warehouses. Volvo Trucks and Daimler Trucks have announced partnerships too.

Energy Sector News

U.S. UTILITIES ARE FACING THE HIGHEST NATURAL GAS PRICES IN YEARS as they build stockpiles for winter. U.S. Henry Hub gas prices reached $5.59/million BTUs, up from $3 a year ago. A record amount of renewable electricity was added to energy systems globally in 2021, but it remains about half of what is needed annually to be on track to reach net zero emissions by 2050.

Skyscraper glass solar power


GLASS WITH INVISIBLE SOLAR PANELS THAT GENERATE ELECTRICITY was developed at South Korea’s Incheon National University. Fully transparent solar cells can be integrated into windows, buildings or even mobile phone screens. Abundant and easily manufactured nickel oxide is playing a pivotal role. Researchers at the Lawrence Berkeley National Laboratory discovered that they could use a technique called cryo-forging to manipulate pure titanium on the scale of a billionth of a meter (a nanometer) at ultra-low temperatures to produce extra-strong "nanotwinned" titanium without sacrificing any of its ductility.

Aerospace Developments

THE PENTAGON SELECTED NORTHROP GRUMMAN, LOCKHEED MARTIN AND RAYTHEON to research and develop a missile system that would be able to defend the U.S. against a hypersonic weapons attack. American Airlines said the Omicron variant is a threat to trans-Atlantic travel, indicating it will have less flights to Europe in January. Those routes are the most lucrative long-haul market, accounting for up to 17% of pre-pandemic passenger revenues for the major U.S. carriers.


Medical Insights

GENERAL ELECTRIC PLANS TO SPLIT INTO THREE PUBLIC COMPANIES, the culmination of a years-long process of shrinking the company. GE Healthcare, which makes MRIs and other hospital equipment, will be spun off in early 2023. The global market for equipment for medical imaging—including ultrasounds, MRIs, X-rays and CT scans—was worth around $22 billion in sales globally in 2020. Johnson & Johnson plans to spin off its consumer health division to focus on pharmaceuticals and medical devices.

Stay Up to Date:

Stay up to date on the latest state of the markets and ecosystems fueled by stainless steel and other key manufacturing materials by subscribing to get the Ulbrich Economic Update delivered to your inbox monthly. Subscribe to our newsletter.

Happy Holidays!

Your Support Means Everything to Us

We are delighted with how the Ulbrich Economic Update has evolved since its inception and our ability to share monthly updates with our six stakeholders: Customers, Vendors, Employees, Shareholders, Community and Creditors. If you haven't had a chance to provide your feedback on how we can improve this monthly update, please do so by filling out our short questionnaire here. We will take all responses into consideration towards enhancing the update for the new year. We appreciate your business and look forward to a successful 2022!

All articles

Recommended Articles