Ulbrich Economic Update - Number 62 (July 2025)
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.
The Americas
U.S. MANUFACTURING ACTIVITY CONTRACTED in June, with the ISM Manufacturing PMI rising slightly to 49.0% but below the growth threshold for the fourth consecutive month. Consumer confidence fell sharply in June. Manufacturing output rose just 0.1% in May. Durable goods orders surged 16.4%, driven by a spike in commercial aircraft bookings, while core capital goods orders rebounded 1.7% following two months of declines. The Leading Economic Index slipped 0.1% in May. Retail sales fell 0.9%, while consumer spending dipped 0.1%.
Inflation remained moderate but sticky, with the Consumer Price Index up 2.4% and the Producer Price Index rising 2.6% year-over-year. Pending home sales posted a stronger-than-expected 1.8% gain, but construction spending fell for the second consecutive month. Nonfarm payrolls increased by 147,000 in June, though private payroll growth was the slowest in eight months. The unemployment rate dipped to 4.1%, but long-term unemployment and discouraged workers both rose. Factory orders climbed 8.2% in May but the goods trade deficit widened 11.1% to $96.6 billion as exports slumped.
Overseas
GLOBAL TRADE SHIFTS ARE ACCELERATING, with new U.S. tariffs on BRICS-aligned countries and trade deals progressing with India, Vietnam, and the UK. Europe is bracing for China-linked EV and steel disruption while revising trade terms with Ukraine and launching a climate-funding tax on premium travel. In Asia, Chinese EV export growth has slowed, prompting more overseas production. Dubai plans eVTOL service by 2026, and the U.S. lifted chip tool export bans to China. Meanwhile, the OECD projects emerging Asia will drive 60% of global growth in 2025.
Metals & Commodities
TRADE TENSIONS AND SUPPLY CHAIN CONCERNS ARE SHAPING COMMODITY FLOWS, as Malaysia imposed provisional anti-dumping duties on steel imports from China, Korea, and Vietnam. Rare earth access remains a flashpoint, with India launching a seven-year initiative to reduce import dependency and Japan preparing world-first deep-sea rare earth mining. Meanwhile, cocoa supplies are stabilizing, and China’s AI data center emissions have drawn scrutiny. In Ukraine, infrastructure damage surpassed $175B, while Europe explores critical minerals stockpiling amid geopolitical risks.
Aerospace Developments
BOEING SECURES A $2.8B DEFENSE CONTRACT to develop satellites for nuclear command communications, while eVTOL development accelerates with new international alliances and U.S. military contracts. Airbus and Malaysia Airlines signed a high-profile jet deal, and Germany and the UK will ink a new mutual defense treaty on July 17. Supply chain visibility is improving as Airbus prepares for demand recovery, and the UK announced a major clean aviation investment. In Australia, Goodman Group launched a $2.7B data center fund tied to aerospace and digital infrastructure growth.
Medical Insights
REGULATORY CHANGES AND NEW APPROVALS ARE RESHAPING HEALTHCARE, with the U.S. FDA ending REMS requirements for CAR-T therapies and expanding Moderna’s RSV vaccine eligibility to at-risk adults under 60. The CDC reversed previous dismissals to support broader RSV and meningococcal vaccine use. The UK suspended Valneva’s chikungunya vaccine for seniors, and the EU approved Vertex’s Alyftrek cystic fibrosis treatment. Gavi raised $9B for global vaccine access, despite U.S. nonparticipation, while Bharat Biotech and GSK pledged malaria vaccine price cuts by 2028.
Automotive Trends
TARIFFS CONTINUE TO DISRUPT THE NORTH AMERICAN AUTO MARKET, with U.S. new vehicle sales up 2.5% on an adjusted basis in June but down 5.4% unadjusted due to early-year pull-forward. Average retail prices hit $46,233, and tariffs added $4,275 per vehicle. Ford and Hyundai posted strong May sales amid consumer urgency, while new EV tax credits will expire September 30, raising concerns about a post-spike sales slump. GE Appliances announced a $490M reshoring investment, and Audi is eyeing a $4.6B U.S. plant to mitigate trade risks.
Steel Industry Updates
U.S. STEEL IMPORTS REMAIN VOLATILE, with April volumes plunging 17% before rebounding 14% in May. Nippon Steel and U.S. Steel finalized a $14B partnership that includes a “Golden Share” for U.S. government oversight, job protections, and a $11B domestic investment pledge. Cleveland-Cliffs launched a $150M hydrogen-powered stainless line.
Energy Sector News
CLEAN ENERGY INVESTMENTS CONTINUE, with Cleveland-Cliffs’ hydrogen-based stainless line and the UK’s $340M clean aviation tech fund showcasing regional progress. Shell and partners expanded Norway’s Ormen Lange gas field with subsea compression, adding up to 50 bcm in reserves for the EU. Italy debuted a major EV battery repurposing project, and Spain’s Zelestra secured $277M in new funding for global renewable infrastructure. The IEA projects oil supply will outpace demand in 2025 as Chinese consumption plateaus and U.S. shale activity slows.
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