Ulbrich Economic Update - Number 57 (February 2025)
Download the 17 page Economic Update for the full details of recent economic trends impacting the steel and commodities markets, as well as the associated industries across the globe. Continue for the Executive Summary.
Global Trade
PRESIDENT DONALD TRUMP ANNOUNCES PLANS TO IMPLEMENT NEW 25% TARIFFS on all steel and aluminum imports effective March 12, 2025, reflecting the most current information available at the time of publication.
Steel Industry Updates
U.S. STEEL EXPORTS FELL TO AN 11-MONTH LOW IN NOVEMBER, while imports rebounded in December and surged in January to near three-year highs. Domestic steel shipments increased in December but remained down for 3.6% in 2024.
Metals & Commodities
INDONESIA IS CONSIDERING CUTTING NICKEL MINING QUOTAS TO BOOST PRICES AMID A GLOBAL GLUT, following a 40% price decline over two years. The country, controls 57% of global refined nickel production. Meanwhile, China announced new export restrictions on critical materials, requiring government approval for exports.
The Americas
U.S. MANUFACTURING ACTIVITY REBOUNDED IN JANUARY, as the ISM Manufacturing PMI rose to 50.9%, signaling growth for the first time in over two years. Key sectors like primary metals saw gains, though fabricated metal products continued to contract. Consumer confidence declined, with the index falling 5.4 points to 104.1. Manufacturing output increased 0.6% in December, bolstered by a recovery in aerospace production, although factory orders declined 0.9%, reflecting continued weakness in civilian aircraft bookings. Durable goods orders fell 2.2% in December, but core orders excluding transportation rose slightly by 0.3%.
The Leading Economic Indicators Index slipped 0.1% in December after an upwardly revised increase of 0.4% in November. Inflationary pressures persisted, with the Consumer Price Index climbing 0.4% in December, pushing annual inflation to 2.9%. Producer prices rose 0.2% in December, indicating moderation, yet annual PPI inflation accelerated to 3.3%. Retail sales increased 0.4% in December, supported by gains in motor vehicles, furniture, and clothing, while online sales growth slowed. Nonfarm payrolls expanded by 143,000 in January, marking slower job growth compared to prior months, though wage growth remained robust at 0.5% month-over-month. The unemployment rate ticked down to 4.0%, its lowest level since May 2024. Construction spending exceeded expectations, rising 0.5% in December.
Overseas
THE EU IS EXPLORING A PAN-EUROPEAN SUBSIDY FOR ELECTRIC VEHICLES TO COUNTER CHINESE COMPETITION and is considering reducing its 10% car import tariff closer to the 2.5% charged by the U.S. In Asia, Taiwan dispatched officials to Washington to address potential U.S. semiconductor tariffs, while China imposed retaliatory tariffs on U.S. coal, LNG, crude oil, and farm equipment.
Automotive Trends
VOLVO CARS WARNED OF A CHALLENGING 2025 AMID INTENSE COMPETITION, EV price wars, and new tariffs on Chinese-made vehicles. Meanwhile, Nissan withdrew from merger talks with Honda after rejecting a proposal to become a subsidiary and is now exploring partnerships with technology firms, including Taiwan’s Foxconn.
Energy Sector News
THE MIDDLE EAST HAS BECOME THE FASTEST-GROWING RENEWABLES MARKET OUTSIDE CHINA, driven by ambitious solar projects in the UAE and Saudi Arabia. The UAE announced a $6 billion solar farm with 19GWh of battery storage, while Saudi Aramco plans to begin lithium production in 2027 to support battery supply chains. TotalEnergies has started constructing a $250 million gas processing facility in Iraq as part of a $10 billion energy infrastructure investment.
Aerospace Developments
THE FAA IS REDUCING FLIGHT ARRIVALS AT REAGAN NATIONAL AIRPORT following a deadly collision between a helicopter and an American Airlines regional jet. Meanwhile, Boeing projected that South Asian airlines will quadruple their fleets by 2043 to meet rising travel demand. Boeing also warned of layoffs in its space launch system program, with approximately 400 positions expected to be cut following NASA’s Artemis mission delays and rising costs.
Medical Insights
ISOMORPHIC LABS PLANS TO BEGIN CLINICAL TRIALS FOR ITS FIRST AI-DESIGNED DRUG BY LATE 2025, targeting diseases in oncology, cardiovascular health, and neurodegeneration. The Google-owned biotech startup aims to cut traditional drug development timelines significantly. Meanwhile, USDA studies confirmed that U.S. chicken and pork plant workers face high risks of musculoskeletal disorders, with 81% of poultry workers and 46% of pork workers identified as being at elevated risk.
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