Market Update - December 2024

US ISM (Institute for Supply Management) Manufacturing PMI came in at 48.4 in November, its highest reading since June. There appears to be cautious business optimism for 2025 after the election.

University of Michigan’s consumer sentiment rose for the 4th straight month in November to 71.8, its highest reading since April.

Annual US inflation rate rose 0.1% in November to 2.7%, its second month rising higher. The annual core CPI inflation again held steady at 3.3%.

Several Economists are now forecasting a slight uptick in the inflation rate during 2025 (in the low 3.0% range).

The US economy recorded 224,000 jobs in November 2024. October’s number was revised upward to 36,000.

The unemployment rate ticked upward 4.2% for November. Trends show a slight tilt upward in the unemployment rate and a tilt downward in payroll employment over 2024.

Kiplinger projects the unemployment rate to hover in the low 4% range during 2025.

Gas prices are ending the year near a three-year low – Industry Analysts expect gas prices to slowly rise during 2025, especially if the economy starts to gain momentum during the back half of the year.

• (Excerpts from Indeed’s Hiring Lab 2025 Outlook)
• The balance of current economic indicators suggests continued labor market resilience in 2025.
• An economic soft landing is coming into view but there are headwinds emerging, including a near-term slowdown in hiring and looming long term labor shortages.
• An aging population and an expected decline in immigration suggest that the supply of workers could weigh heavily on the job market in the coming years.
• Posted wage growth has leveled off at a healthy pace, suggesting continued robust competition for workers next year — especially in low-wage and in-person roles.
• Employers will need to figure out how to do more with less: The US will have to find ways to overcome the long-term impacts of a dwindling labor supply as the population ages.
• Employers will need to continue to embrace flexibility: A growing focus on reducing degree and experience requirements, boosting skills-based hiring practices, and embracing part time employees may provide ways to successfully address these upcoming labor supply challenges.

Most industry experts predict a rebound in global steel demand in 2025, with the US market also seeing a positive shift.

Improved economic conditions, infrastructure projects, and a gradual recovery in key industries like Construction and Agriculture are expected to boost demand for steel.

Most analysts expect an upward trend in steel prices over 2025.

Ongoing global economic uncertainties, especially potential tariffs, could impact the overall market.

AISI (American Iron and Steel Institute) applauds the recent announcement of Congress passing the water resources bill. This bill affects investment in maintenance and construction of ports, locks, dams, and inland waterways across the US, all deemed critical to the metals industry and its ability to efficiently transport metals. (SMU)

Most major industries are attempting to understand how Donald Trump’s new tariff pledges may impact them. He has sent signals that he wants to re-write the North American free trade pact and follow through with plans to hit China with additional tariffs.

Recent comments on Truth Social indicate he wants to levy 25% tariffs on Mexico & Canada imports, along with an additional 10% tariff on Chinese imports.

Tariffs would drive up the price of steel & aluminum because these are all major suppliers of those metals.

Tariffs would especially hit the US Automotive Industry supply base hard – U.S Automakers have spent decades establishing a factory footprint in these countries.

In a last-minute scramble last week, Congress passed, and President Biden signed a funding bill avoiding a government shutdown. The bill extends government funding through March 14th. This issue will certainly add to a likely turbulent first quarter of Trump’s second term in office.

Recent new vehicle sales estimates are between 16.2M-16.3M for 2025 – a little over a 1% increase from final 2024 sales.

Hot Rolled Coil for December reporting an average of $675, down from November $690/ton, $15/ton (SMU).

The lead time range on Hot Rolled Coil remains at 4-7 weeks on average.???

#1 Bush Scrap remains level at $380/ton, now seven consecutive months unchanged.

US market is reported to be “quiet” as the industry is waiting on a new rules, a new administration and new rule regarding import competition.

Nippon Steel’s plan to acquire US Steel was sent to Biden this week after the government panel in charge of review failed to reach consensus. The Japanese company continues to state confidence in approval given a fair evaluation. National security risks continue to be a source of concern. (WSJ)

Steel production capacity utilization, according to AISI (American Iron and Steel Institute), closed week ending December 14 at 1.655 million net tons and 74.3% utilization. Year to date overall production lags 2023 by 2.3% at total production of 83,836,000 net tons.

Familiar metals industry CRU average for flat roll-based products, numbers reported, effectively no meaningful changes will occur for Q1 2025 carbon products aligned to this index.

Nickel closed trading, December 23 at $15,385/ton ($6.98/pound), with a December average month to date at $7.05/pound). This month’s average is down slightly from November $7.14/pound average.

Potential stainless import tariffs on the horizon may lead to a short-term increase in import shipments.

Stainless pipe surcharges will decrease in January to $1.07 for 304 and $1.78/pound for 316 grades.

LME pricing for November at $1.17/pound, up year over year 17.29%.

November Midwest Average was at $1.386/pound. This was just slightly higher than the October 2024 high value, and $.20/pound higher than one year ago. (Kaiser)

Overall, 2024 shipments of aluminum extruded products are down 4.9% based on statistics reported by the Aluminum Association surveys. YOY comparison through October, 3730.7 (2024) vs. 3922.1 (2023) million pounds.

Christmas was not always on December 25 - The exact date of Jesus’ birth is unknown, and many historians believe he was born in the spring. The Bible does not mention his birthday, and the Nativity story includes conflicting clues. The first recorded Christmas on December 25th was in 336 in Rome Italy.

Christmas was once illegal - From 1647 to 1681, the Puritans made Christmas illegal and disliked activities associated with the holiday.

Christmas trees became popular thanks to Queen Victoria and Prince Albert - In 1848, the Illustrated London News published a sketch of the couple and their children in front of their Christmas tree, which made the tradition fashionable.

Eggnog originated in medieval Britain - Eggnog was a luxury for the upper class because they were the only ones who could afford the eggs, sherry, and milk needed to make it.

Artificial Christmas trees originated in Germany - In the 19th century, Germans made artificial trees using goose feathers dyed green and attached to wire branches.

Santa Claus is based on St. Nikolas of Myra - St. Nikolas of Myra is the patron saint of orphans.

Disclaimer:

The information contained in this newsletter is a summary of current events provided by Marmon/Keystone LLC as a service/promotion to our customers. It contains information only and is not legal or investment advice. No reliance should be made on the information in the newsletter. Although we try to provide quality information, we do not guarantee the results obtained from the use of this information and we do not represent or warrant that such information is or will be always up-to-date, complete, or accurate. Any representation or warranty that might be otherwise implied is expressly disclaimed. You agree that we are not liable to you or others, in any way or for any damages of any kind, arising from this information or your use of or reliance on this information.