March 2021 Insight Guide: Market Indicators

U.S Economic News

The U.S. economy got off to a modest start over the first weeks of this year. According to the Federal Reserve, businesses are optimistic about the next 6-12 months and the demand for housing is robust. However, the labor market is not gaining as much traction as had been hoped.

U.S. employers added 379,000 jobs in February after a disappointing 166,000 jobs in January. As COVID cases decline and the vaccine becomes more widely distributed, states are allowing businesses to ease restrictions. The February job growth was propelled mostly by a surge in leisure and hospitality employment. Economists expect to see job prospects to improve in the coming months as more and more Americans get vaccinated.

Economic Indicators

The Consumer Confidence Index improved again in February, after increasing in January. It now stands at 91.3, up from 88.9 in January.

The February Purchasing Managers Index registered at 60.8%, an increase of 2.1 points from January, indicating expansion in the overall economy for nine consecutive months. The New Orders Index came in at 64.8%, up 3.7 points from the previous month. The Production Index registered at 63.2%, up 2.5 points compared to January.

January’s reading of the Architecture Billings Index rose slightly to 44.9 compared to 42.3 in December. However, the score is still below 50. Any score below 50 indicates a decline in firm billings.

Steel Industry News

Steel is in short supply in the U.S. and prices are continuing to surge. Unfilled orders for steel were at the hightest level in 5 years last quarter. Inventories were at a 3 1/2 year low, according to the Census Bureau. These soaring prices are driving up costs and squeezing profits at steel-consuming manufacturers, causing a new round of calls for an end to former President Donald Trump’s steel tariffs.

The Midwest aluminum premium has risen to a nearly 16-month high. Market participants point to supply issues. Sources expect the supply to run dry in a few months unless imports can return to the U.S. market. With no imports coming in, the premium will continue to increase.

For more information, view the March 2021 Market Insight Guide below or contact your local sales rep.

Metalwest Market Insight - March 2021
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February 2021 Insight Guide: Market Indicators

Economic News

The U.S. economy grew at a 4% annual rate in the final three months of 2020 and shrank by the largest amount in 74 years as the global pandemic held strong.

In late January, the government estimated that the nation’s gross domestic product slowed sharply in the fourth quarter of 2020 after a record 33.4% surge in the July-September quarter. That gain followed a record-breaking 31.4% annual plunge in the April-June quarter, when the economy plunged.

The outlook for 2021 is still clouded as economists warn that a sustained recovery won’t likely take hold until vaccines are distributed and administered nationwide and government aid spreads throughout the economy. This is likely to take months.

U.S. employers barely added any jobs last month, underscoring the pandemic’s ongoing grip on the economy. The increase of just 49,000 jobs in January hardly made a dent in the nearly 10 million jobs that remain lost since the virus intensified nearly a year ago. The unemployment rate fell from 6.7% to 6.3% in January.

Economic Indicators

The January Purchasing Managers Index registered at 58.7%, down 1.8 points from the previous month. This indicates expansion in the overall economy for the eighth consecutive month, as a score above 50 represents expansion.

The Architecture Billings Index declined to 42.6 for the month of December, indicating that more firms saw declining billings verse the previous month. Any score below 50 represents a decline.

Steel Industry News

On February 1, President Joe Biden reinstated the 10% aluminum tariff on imports from the United Arab Emirates. Former President Donald Trump had lifted the tariff on his last day in office. This reinstatement suggests that it is unlikely the Biden administration will remove the aluminum tariffs imposed by the previous administration.

U.S. oil and gas drillers added rigs for the 11th consecutive week. The count of rigs in the U.S. was 392 for the week through February 5. Economists see oil and gas drillers to likely continue adding rigs as the economy recovers from the pandemic in 2021.

For more information, contact your local sales representative or view the February 2021 Market Insight Guide below.

Metalwest Market Insight - February 2021
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January 2021 Insight Guide: Market Indicators

The Economy

Chances of another stimulus package increased as Democrats sweep the week’s senate runoff in Georgia. An additional stimulus would accelerate the nation’s return to pre-pandemic gross domestic product and unemployment levels.

For the first time in eight months, the U.S. economy saw job loss in December as the pandemic surges. The Labor Department reported that payrolls fell by 140,000, below economists expectations. The unemployment rate was unchanged at 6.7%.

Key Indicators

Architecture firm billings declined for the ninth consecutive month in November. The ABI score of 46.3 indicates that the pace of the billings decline accelerated from October.

The December Purchasing Managers Index registered 60.7%, up 3.2 percentage points from the November reading of 57.5%. The New Orders Index registered 67.9%, up 2.8 percentage points from the November reading. The Production Index registered 64.8%, an increase of 4 percentage points compared to the November reading of 60.8%.

The Consumer Confidence Index declined in December, after decreasing in November. The Index now stands at 88.6, down from 92.9 in November.

Industry News

On Dec. 23, 2020, the U.S. Department of Commerce announced the creation of the Aluminum Import Monitoring and Analysis system. The system will collect and publish data on aluminum imports into the U.S. It is expected to be available on Jan. 25, 2021.

Bullish sentiment was expected to persist in January in the U.S. steel market, according to the monthly survey of the market by S&P Global Platts. Most participants expect higher steel and raw material prices in coming weeks, as well as increased production. However, with the steel industry finding itself in a strong upswing going into 2021, several respondents questioned expressed concern about a possible similar swing in the other direction.

For more information, view the January 2021 Market Insight Guide below or contact your local sales representative.

Metalwest Market Insight - January 2021