Ulbrich Economic Update - Number 49 (June 2024)

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Ulbrich Economic Update June 2024 Issue

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 for the Executive Summary.

Service sector growth

The Americas

THE U.S. SERVICES SECTOR SNAPPED BACK INTO GROWTH MODE IN MAY after a short-lived contraction in the prior month, with a measure of business activity improving by the most in three years, which may buttress the Fed's wariness of a shift to interest rate cuts. Other May data included: U.S. payrolls gained 272,000 jobs and annual wage growth reaccelerated, underscoring the resilience of the labor market and reducing the likelihood the Fed will start rate cuts in September. The jobless rate rose one-tenth of a point to 4.0%. U.S. manufacturing slowed for a second straight month as new goods orders dropped by the most in nearly two years.

April data showed: Factory orders increased 0.7%, the third straight monthly gain. Industrial output was unchanged, although factory production fell 0.3%. Mining output dropped 0.6% but utilities rose 2.8%. Durable goods orders climbed 0.7%, defying expectations for a drop of that size. Core capital goods orders increased 0.3%. Producer prices rose 0.5%, with services accounting for 70% of the increase. Goods prices gained 0.4%, boosted by a 2.0% jump for energy products. Food prices fell 0.7%. The leading economic indicators fell 0.6%, with negative contributions from 5 of the 10 components of the index. Consumer prices rose 0.3% after advancing 0.4% in March and February. Retail sales were unchanged. Economists say consumers are focusing their spending on essentials and cutting back on luxuries amid higher prices. Consumer spending adjusted for inflation fell 0.1%. Real disposable income fell 0.1%. Construction spending fell 0.1% after slipping 0.2% in March but was higher by 10% YOY. New home sales dropped 4.7% and existing home sales fell 1.9%.

Copper price increase

Metals & Commodities

U.S COPPER PRICES were at a record premium over the global benchmark LME as speculative funds piled in and traders were forced to cover short bets on the world’s most important industrial metal. Copper futures traded in New York surged to an all-time high with the most active three-month contract to July rallying 11% to a peak of more than $5/lb. The global surplus in nickel production will shrink dramatically in 2024, according to a recent forecast revision by the International Nickel Study Group.


BEIJING MOVED TO REVIVE CHINA’S DEBT-STRICKEN PROPERTY SECTOR, encouraging local governments to buy real estate and relaxing mortgage rules as it seeks to boost a recovery amid a protracted slowdown. The European Commission said annual inflation in the eurozone will drop to 2.5% this year, before reaching the European Central Bank’s 2% target in the 2nd half of 2025. The Commission still expects the single currency bloc to grow 0.8% this year and predicted slightly stronger growth of 1% in 2025.

Mercedes Benz

Automotive Trends

WORKERS AT A MERCEDES-BENZ PLANT IN ALABAMA handed a stinging loss to the UAW, rejecting the union in a vote it had expected to win and allow the UAW to push deeper into the U.S. South. It marked the first big loss for UAW organizers after a series of victories. New U.S. tariffs on Chinese imports target strategic sectors, including a major hike in levies on electric vehicles. The tariff update maintains existing duties and increases EV tariffs this year from 25% to 100%, bringing total EV duties to 102.5%.

Medical Insights

DEXCOM RECEIVED FDA CLEARANCE FOR STELO, making it the first company to get authorization in the U.S. to sell a CGM without an Rx. Dexcom will target the 25mn people in the U.S. who have Type 2 diabetes and are not taking insulin. Firms making CGMs and insulin pumps reported double-digit revenue growth in the 1st Qtr. Neuralink got an OK from the FDA to implant its brain chip in a second person, signing off on the company’s proposed fixes after wires inside the brain of its first patient pulled out of position.

wind and solar

Energy Sector News

TOTAL GENERATING CAPACITY IN THE U.S. is expected to be boosted by 80% through 2035, driven largely by almost one terawatt of new solar and wind. Utilities are racing to strip carbon from the grid and add new capacity to meet booming demand. The Swiss national body that manages nuclear waste spent months exploring the method proposed by start-up Transmutex and concluded that the technology could cut the volume of highly radioactive waste by 80%. A French fusion reactor sustained a plasma of 50mn degrees Celsius for a record six minutes. Scientists encased the tokamak’s interior in tungsten, which has an extraordinarily high melting point.

Aerospace Developments

JET-FUSELAGE SUPPLIER SPIRIT AEROSYSTEMS is laying off 400 to 450 workers at its Wichita factory as the company grapples with a production slowdown at Boeing. Efforts by Boeing to acquire Spirit are held up because Spirit has so far failed to reach a deal with Airbus over control of Spirit factories that produce parts for Airbus jets. The European Space Agency moved to create a European version of SpaceX, naming two companies chosen to develop commercial cargo services to the International Space Station.

stainless steel sheet coil factory

Steel Industry Updates

INCREASED PRIMARY NICKEL PRICES HAVE LED TO RISING STAINLESS STEEL MARKET VALUES. Nickel surcharges are based on the LME cash price. Overall demand for stainless steel is steady and the nickel rally has coaxed some buyers off the sidelines. Green hydrogen producer Lhyfe has signed a MoU with the major stainless steel company Ugitech to install a green hydrogen production facility at Ugitech's plant in the French Alps to power the steel plant's furnaces and heating equipment.

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