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November 9, 2021 – The US infrastructure deal will increase demand by an average of 5 million tons of steel for every US$100 billion spent on it, according to US steel groups – which could amount to a calculated 27.5 million tons. Positive trends on stock exchanges and base metals. Nickel demand remains high – especially for nickel pig iron and pure nickel.

Stainless Espresso: US infrastructure bill will increase demand for steel
Stainless Espresso: US infrastructure bill will increase demand for steel

US infrastructure bill will increase demand for steel

Back in August 2021 we reported that the passage of the US Infrastructure Bill is expected to significantly increase demand for steel and stainless steel in the United States. American blast furnaces are already running at their capacity limits.

US steel groups welcome new law

Based on estimates by AISI and The Steel Manufacturers Association, approximately 5 million metric tons of steel will be needed for every 100 billion in infrastructure spending. Assuming $550 billion in the Bipartisan Infrastructure Deal, that would be an additional 27.5 million metric tons of steel needed in purely mathematical terms.

US steel industry already running at full speed

To the delight of the US steel unions, the additional steel demand is expected to come primarily from domestic melted and poured production. Which is not unusual for the United States.

But if millions more tons of domestic steel production are diverted to infrastructure here over the next few years, where will the shortfall for the steel processing industry come from? The Biden Administration has announced that it will step up action against the Chinese new Silk Road in the coming year. The question is therefore also to whom could the Melted and Poured rules be applied in the future?

Positive trends on the stock exchanges and in base metals

After the dollar started to move a bit, base metals also adjusted. Copper (+0.16%), Nickel (+1.32%), Aluminum, Zinc (+1.44%) and Lead (+0.65%) have closed positive on the SHFE. The LME is still looking for its trend a little this morning. The Hang Seng Index in Hong Kong has closed positively. The German DAX also remains above 16,000 points. Nasdaq and Dow Jones have closed positive on Monday.

Demand for nickel remains high

Nickel has returned to just under 145,000 yuan (+1.32%) at the close of trading on SHFE. It is supported by strong demand for nickel pig iron from nickel sulfate and briquette producers and strong demand for pure nickel from Chinese stainless steel producers. And in Asia, producers are already raising stainless steel prices again.

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