Metals Industry Update Q3 2024

The third quarter of 2024 was characterized by bearish market conditions, with high borrowing costs weighing on business activity. In addition, sluggish consumption of steel in China despite steady production led to an increase in export volumes of cheaper Chinese metal, thereby impacting the steel industry globally.

The U.S. Manufacturing PMI, after signaling improvement in business conditions at the end of Q2, moved deeper into contraction in Q3 caused by reduced investment spending amid uncertainty surrounding the upcoming Presidential election.

However, the prospects for the metals industry remain bright. With the Fed introducing an interest rate cut in September and indicating further rate cuts in the coming months, consumer spending and construction activity are expected to increase.

Federal legislation, including the Infrastructure Bill, IRA, and CHIPS Act, continue driving demand-side optimism with government funds allocated to infrastructure revitalization, energy transition, domestic semiconductor manufacturing, grid modernization, and other areas.

Additionally, government measures aimed at regulating U.S. imports are expected to boost industry growth. The imposition of a 25% tariff on Mexican steel that is melted and poured outside of North America would reduce the transshipment of foreign metal imported via Mexico and combat unfair trade.

Also, the U.S. Government expanded trade protection for aluminum producers by levying a 10% tax on aluminum imports originating from China, Russia, Belarus or Iran.

The World Steel Association’s recent outlook also anticipates a recovery in developed economies’ steel demand in 2025, forecasting growth of 1.9%, following a decline of 2.0% in 2024.