Metals Newsletter Q4 2023

Navigating a macroenvironment in 2023 that featured volatile metal prices, monetary tightening, and weaker consumption, metal companies remain cautiously optimistic regarding long- term demand prospects. Growing infrastructure investment, strengthening commercial construction, as well as the continued post-pandemic recovery in the automotive industry has sustained momentum through the year.

The initial months of Q4’23 saw subdued vehicle production due to the United Auto Workers (UAW) strike. However, with deferred demand returning given the settlement, metal prices trended upward.

While the U.S. Manufacturing Purchasing Managers’ Index (PMI) remains in contraction, the Federal Infrastructure Bill and Inflation Reduction Act (IRA) are projected to spur a variety of metal-intensive public utility rehabilitation, electrification, and clean energy projects, all fueling manufacturing activity and eventually rebounding the PMI.

Further, reshoring efforts, supported by the CHIPS Act, are set to provide a boost to industrial and commercial construction, providing a strong tailwind for metal prices.

With mounting global focus on sustainability and the Federal Buy Clean Initiative gaining strength, secondary raw material continues to gain favor in manufacturing processes, driving demand for scrap metal.

Looking ahead to 2024, expectations of moderating inflationary pressures and a decline in interest rates are anticipated to increase public and private consumption, business spending, and capital investment. According to recent estimates by the World Steel Association, steel demand in the U.S. is expected to grow by 1.6% in 2024, with a projected global increase of 1.9%.