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United States

The United Auto Workers (UAW) union has settled its contracts with all of the Big 3 auto makers after strikes lasting nearly two months. The five-year deals will boost wages by around 33% over the term of the new contracts, including provisions for cost-of-living increases. The agreement also allows for job protection as the industry transitions to higher production of electric vehicles (EVs).

Auto sales continued to improve during the strikes, although inventories are beginning to grow, with EV sales lagging badly. The EV markets are having a hard time catching on in the USA, even with many brands offering US$ 7500 tax credits from the federal government. I have seen dealers offering as much as 20% below list pricing for battery electric vehicles, even before the tax credit. Manufacturers such as Ford and General Motors are rethinking their strategies around EVs as sales and profitability suffer, delaying some of their growth plans. 

Most economic signs in the USA remain relatively positive but caution still surrounds the future. GDP growth was very strong in the third quarter at 5.2%, which was well above the previous quarters. The most recent unemployment rate figure was 3.9%, slightly higher than in previous months but still historically low; the job markets remain relatively strong. Inflation has been tempered but remains above the 2% rate targeted by the Federal Reserve. The results of post-holiday Black Friday shopping were positive: people continued to gravitate towards on-line shopping while in-store traffic showed an improvement over last year.  

The metals business seems to have settled into holiday and end-of-year inventory slowdowns. Many rolling mills are out of the markets until 2024 as they reduce inventories for the end of the year. Billet producers, although slow, are active in the spot scrap marketplace at present; their demand for scrap seems to be a reaction to slower extrusion production, which leads to less revert metal coming back to the cast house. Die cast business is stable and returning to normal levels following the end of the UAW strikes. Pricing in the marketplace remains relatively stable, with the all-in primary aluminium price still in a very tight range. The regional aluminium premium continues to drift slowly downwards, but the drop is insignificant. Having fallen during the UAW strikes, high-volume die cast alloys seemed to find a floor and are now stable to a little higher. 

Domestic copper consumers are trying to widen spreads, as demand is a little off, but are getting pushback amid brisk export interest. Brass ingot makers are somewhat busier and this is reflected in pricing.