Ulbrich Economic Update - Number 64 (September 2025)

Download the 14 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 AUGUST for the sixth consecutive month. Consumer confidence edged down to 97.4 in August from 98.7, as both the Present Situation Index (131.2) and Expectations Index (74.8) declined. Manufacturing output stalled in July, unchanged after a 0.3% gain in June, while overall industrial production fell 0.1%. Durable goods orders dropped 2.8% in July after a 9.4% plunge in June, though core capital goods orders excluding aircraft increased 1.1% and shipments rose 0.7%. The Conference Board’s Leading Economic Index slipped 0.1% in July to 98.7, down 2.7% over the past six months. The Consumer Price Index rose 0.2% in July and 2.7% year-over-year, while the Producer Price Index surged 0.9% in July and 3.3% year-over-year.

Retail sales climbed 0.5% in July, and core sales also rose 0.5%, while consumer spending advanced 0.5%. New home sales fell 0.6% in July to a 652,000-unit pace, and construction spending declined 0.1%. Nonfarm payrolls grew by only 22,000 in August, with June revised to a loss of 13,000 jobs, while unemployment rose to 4.3% and job openings dropped to 7.18 million. The U.S. trade deficit widened 32.5% to $78.3B in July as imports surged 5.9% and exports edged up 0.3%. Factory orders fell 1.3% in July, following a 4.8% drop in June. Business activity strengthened in August, with the S&P Global Composite PMI rising to 55.4.

Automotive Trends

TARIFFS AND SAFETY ISSUES RESHAPE THE LANDSCAPE, as Ford invests $2B to overhaul its Louisville plant for a low-cost EV pickup, part of a $5B push creating nearly 4,000 jobs. Stellantis recalled nearly 92,000 Jeep Grand Cherokees over software defects, while Tesla faced scrutiny after proposing a record $1T compensation package for CEO Elon Musk. Canada waived its 2026 EV mandate and offered $3.6B in aid, while Trump signaled new restrictions on Chinese vehicle imports.

Steel Industry Updates

U.S. COURT RULING CLOUDS TARIFFS AS CONSOLIDATION ACCELERATES, with Nippon Steel, U.S. Steel, Cleveland-Cliffs, and the USW dropping litigation tied to Nippon’s $15B acquisition. Varsteel expanded in Canada with the purchase of Reliable Tube and Spartan Metal, while Friedman Industries bought Century Metals to grow in the Southeast and Latin America. Merrill Steel announced a $32M Arkansas facility, and Mill Steel is relocating its Houston operations.

Overseas

U.S. TARIFF PRESSURE RESHAPES GLOBAL TRADE FLOWS, with Canada dropping retaliatory tariffs on U.S. goods and suspending its EV mandate, while Brazil clashed with Washington over 50% duties tied to Bolsonaro’s trial. Europe faced aluminum shortages as U.S. tariffs diverted scrap flows, while Brussels weighed new quotas and steel protections. China retaliated with anti-dumping duties up to 62% on EU pork, and the EU pledged to buy $750B in U.S. energy. India saw tariffs double to 50% on its exports over Russian oil purchases, Taiwan’s orchid exports slumped under U.S. levies, and Japan struck a $550B U.S. trade deal to ease auto tariffs.

Metals & Commodities

TRADE AND SUPPLY CHAINS REALIGN AMID TARIFFS, as China boosted rare earth exports to a 15-year high and the U.S. imposed a 93.5% tariff on Chinese graphite. The White House reviewed EPA rules on refinery biofuel waivers, while Egypt secured a $220M solar deal in the Suez Canal zone. India expanded renewable tenders to 5 GW, and Coal India pushed to diversify beyond coal. Global shipping firms scrambled to refinance Chinese-linked leases ahead of steep U.S. port fees, while commodity-linked energy storage projects advanced in Italy and Europe.

Medical Insights

POLICY SHIFTS PRESSURE HEALTHCARE AND AVIATION, as U.S. food groups push for tariff exemptions on imports like shrimp and produce, warning of higher costs and shortages. Canada unveiled a C$5B aid package to help automakers and farmers offset U.S. tariffs, with biofuels singled out for priority support.

Aerospace Developments

SPACE COMMAND RELOCATES WHILE PRIVATE SPACE ADVANCES, with Trump ordering U.S. Space Command headquarters to move from Colorado to Alabama, a costly shift criticized by defense officials. SpaceX’s Starship completed its 10th test flight, deploying mock Starlink satellites and trialing new heat shield tiles for Artemis missions. NASA awarded Firefly Aerospace a $176.7M contract for a 2029 Moon landing, and Australia’s Macquarie AirFinance ordered 30 Boeing 737-8 aircraft. Meanwhile, Japan welcomed the UK’s HMS Prince of Wales carrier in a historic port call.

Energy Sector News

TRUMP TARGETS RENEWABLES WHILE SOLAR BUILDS RECORD PIPELINE, canceling $679M in federal funding for offshore wind and moving to revoke approval for Avangrid’s New England Wind project. The Commerce Department launched a national security probe into imported wind turbines, while biodiesel imports fell to decade lows after tax credit reforms. Still, developers are on track to add 33 GW of solar capacity this year, nearly half of all new U.S. power additions, with Texas leading. Canada pledged $268M in biofuels incentives for canola producers, while the U.S. launched a solar imports probe into India, Laos, and Indonesia.

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