September Market Minute 2023

Will Auto Strike Drive Steel Prices Higher?

On September 15, the United Auto Workers (UAW) union went on strike against Ford, GM, and Stellantis. The last time auto workers went on strike in 2019 lasted roughly 40 days.

Even if you are not in the automotive market, this news could impact your business as it relates to steel. Some points to consider:  

Current lead times:

• Hot-rolled: 3-5 weeks

• Cold-rolled: 4-6 weeks

• Coated: 4-6 weeks

In High Demand

As we roll toward the final few months of 2023, here’s a look at where metal demand is anticipated to be highest for some industrial metals:

Steel

Hot areas in the steel market include infrastructure-based sectors such as offshore wind transmission towers and heavy machinery.

• Infrastructure projects, including bridge and highway work, mainly drive steel plate demand.

• Sectors like data centers, server racks, and HVAC perform well on the flat roll side.

Aluminum

Increased investments in semiconductor manufacturing facilities in the U.S. are expected to drive demand for heat-treated aluminum plate products like 6061 T6 plate.

Stainless
316 stainless steel remains in high demand domestically, as the grade is harder to source via import. Raw nickel, used in EV batteries, remains in high demand from the electric vehicle market.

Checking the Pulse on Employment

The U.S. unemployment rate remains historically low at 3.5%, indicating a robust labor market. Typically, recessions occur when the unemployment rate increases by about 150 basis points, a condition not currently being met.

Job openings data measured by the Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics show a marked decrease in job openings, and jobless claims have also increased slightly. These developments may be attributed to the Federal Reserve's efforts to cool off the labor market, aiming to manage inflation.

Office Construction Rises in Texas

According to a report from the Dallas Fed, roughly 115.8 million square feet of office property was under construction nationally as of June.

Texas has three of the top 20 markets in the U.S. based on the amount of office space under construction: Austin ranked fifth, Dallas ranked eighth, and Houston ranked 14th.

Read the complete report here.