November Market Minute 2024

The Texas manufacturing sector is grappling with a mixed economic landscape marked by challenges and cautious optimism. Many industries report persistent headwinds, including high interest rates and inflationary pressures, according to the latest manufacturing report from the Dallas Fed.

One pressure that has subsided is uncertainty regarding the U.S. presidential election. Many buyers were waiting on the sideline until a winner had been declared. Johnathan Dunnam, SteelNow’s customer experience manager, has seen this in conversations with customers as of late, many of whom can now decide which direction they want to go with project.

A few highlights from the latest Dallas Fed report include:

- Slowing Demand: Sectors like fabricated metals, machinery, and paper manufacturing report declining orders and anticipate continued softness into 2025. 

- Inflationary Pressures: Food manufacturers are contending with rising costs and constrained margins, while geopolitical instability compounds these issues. 

- Opportunities Amid Challenges: Some sectors, like primary metals and textiles, see opportunities for growth through new product investments or short-term demand spikes. 

What does it all mean for metal prices?

Aluminum prices have been on a rollercoaster ride lately, and much of that is due to higher prices to produce this material. 

The cost of alumina—the key ingredient in making aluminum—has skyrocketed by over 200% in the past year. To stay afloat, aluminum producers have had to raise their prices, but not nearly as much as alumina itself. This mismatch means the cost of making aluminum is higher, and prices aren’t coming down anytime soon.