Nick’s Metal Market Scorecard: Hits, Misses, and What’s Ahead

In this episode of Cup o Joe, Nick and Mike take a trip down memory lane, revisiting six bold metal market predictions Nick made at the start of the year. From steel pricing trends to shifts in global demand, they dissect what came true, what missed the mark, and what surprised everyone.

But it doesn’t stop there—Nick offers a glimpse into the road ahead, diving into the buzz around potential tariffs and the impact of looming interest rate cuts on the metals industry. Are these the key to stabilizing the market, or will they stir up more uncertainty? Grab your cup o joe and tune in for insights, analysis, and a healthy dose of market wisdom!

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Certain statements made in this presentation and other written or oral statements made by or on behalf of the Company constitute "forward-looking statements" within the meaning of the federal securities laws, including statements regarding our future performance, as well as management's expectations, beliefs, intentions, plans, estimates, objectives, or projections relating to the future. Such statements can be identified by the use of forward-looking terminology such as “objectives,” “goals,” “preliminary,” “range,” "believes," "expects," "may," "estimates," "will," "should," "plans," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. The Company cautions that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of various factors. Among the factors that significantly impact our business are: the cyclicality of our business; the highly competitive, volatile, and fragmented metals industry in which we operate; fluctuating metal prices; our substantial indebtedness and the covenants in instruments governing such indebtedness; the integration of acquired operations; regulatory and other operational risks associated with our operations located inside and outside of the United States; impacts and implications of adverse health events, including the COVID-19 pandemic; work stoppages; obligations under certain employee retirement benefit plans; the ownership of a majority of our equity securities by a single investor group; currency fluctuations; and consolidation in the metals industry. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth above and those set forth under "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2022, and in our other filings with the Securities and Exchange Commission. Moreover, we caution against placing undue reliance on these statements, which speak only as of the date they were made. The Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events or circumstances, new information or otherwise.

What is Cup o Joe - A Metals Podcast?

Welcome to Cup o’ Joe, your go-to podcast for a fun and informative look at the dynamic world of metals! In each episode, we bring the latest factors influencing the price and availability of metals, led by the Director of Risk Management and Commodities Hedging at Ryerson, Nick Webb, and hosted by Mike Carrozzo.

Mike Carrozzo: Hello, everybody, and welcome to December's cup of Joe. We're a little bit tardy this month. We apologize.

Mike Carrozzo: Another week you had to wait for us. But here we are on my Carrozzo, and joined, as always, by Nick Webb, our director of risk management, commodities, hedging, and happy holidays. To you, Mr. Webb.

[e-mail]: Happy holidays, Mike. We we got what? 13 days till Christmas, and about the same for Hanukkah. It's we're right in the thick of it.

Mike Carrozzo: Yeah, it's going by quick, really quick. It feels like it was just Thanksgiving. Actually.

[e-mail]: Yeah, I I think we actually have literally one less week between Thanksgiving and Christmas this year. So kind of kind of tightens the belt on getting that holiday shopping, and I need to get to work here soon.

Mike Carrozzo: Have you not started.

[e-mail]: Barely.

[e-mail]: Yeah.

[e-mail]: How about yourself?

Mike Carrozzo: Well, I think we're near the end. When I say, yeah, me, my wife. She did everything for the kids and it's all Amazon. There's Amazon stuff showing up every day.

[e-mail]: Oh, yeah.

Mike Carrozzo: And yeah, so I think I think we're ahead of it.

[e-mail]: Owe to be in the packaging business these days.

Mike Carrozzo: Yeah, exactly. Yeah. And I love your tree very festive in the background.

[e-mail]: Oh, yeah, thank you very much. We just got the tree skirt put under it just a couple of days ago.

Mike Carrozzo: How does the dog? Is it real or fake?

[e-mail]: This one's real. We got it at home depot, though here in the city.

Mike Carrozzo: Yeah, and so we have a real one, too. And

Mike Carrozzo: I figured the dog would go after it this year and start drinking the water, but none of that has happened. I know you got a dog, Roman.

[e-mail]: Yeah, yeah, blues. She's been great with it. I think she's actually kind of scared of that corner of the room, because that leads out to the balcony. I think she's scared of the balcony, so she knows to stay away from it.

Mike Carrozzo: It's funny my dog always brings in branches, and I'm throwing them out. And what I bragged in this tree he's like, really dude you get to bring in a tree.

[e-mail]: I don't know if you can see it down there, but literally the only packages we have under. There are about 6 or 7 dog toys for blue.

Mike Carrozzo: Beautiful. Yeah.

[e-mail]: So that's that's the only thing I've really done this for.

Mike Carrozzo: Hey? There you go! That looks good.

[e-mail]: Appreciate that.

Mike Carrozzo: Well, everybody thanks like, I said. We are. We're about a a week a week late this week this month, but we got a good one for you. So Nick and I, earlier this week, we started chatting about the year, and we said, Wow, you know this is going by pretty quickly. So we decided, let's go back to

Mike Carrozzo: probably February. We didn't have one in January, our February

Mike Carrozzo: and go back to maybe what

Mike Carrozzo: what things Nick said was gonna happen and see how those things actually did play out and

Mike Carrozzo: I I 1st should mention that. So now here. We're at the end of the year. We're going to roll over into 2025.

Mike Carrozzo: There'll be no cup of Joe in January. Sorry no live one, but we have you covered as I think we've been promoting the last few. We've

Mike Carrozzo: pardon me. Been working on this series called Made in Mexico. Nick and I have been talking to

Mike Carrozzo: some folks that are part of the supply chain out there. One is a customs broker, another

Mike Carrozzo: a cluster for the home appliance industry. We're working complete something on the fabrication side, and we'll publish those throughout January. So you'll you'll have your cup of Joe Fix, and then, February, we're going to come back really strong for an hour and a half live episode, and it's going to be Nick

Mike Carrozzo: joined by our supply chain directors. Nick, do you want to give any kind of teaser about what? What? You what you might

Mike Carrozzo: yeah, like.

[e-mail]: Yeah, I mean, so while today is going to be a bit of a year in review, while also taking into context, you know, current market conditions and a little bit of a forecasting into the beginning parts of next year. What we're going to do in the beginning of February is we're going to give a much deeper dive into the landscape. We'll then know. You know, the administration will be in power, and by that I mean, the trump administration will know a little bit more about what their plans are

[e-mail]: in terms of policy, and we're going to do a deep dive into what all of these things mean, for you know the manufacturing and metals markets for 2025.

Mike Carrozzo: It'd be fun. Yeah, those are really good. Yeah, we'll have our supply chain directors on, though. That's always a good time. Getting everybody's perspective. So if you're you're kicking off, you want to plan 2025. Take January off and join us in February. Start planning. It's gonna be 2, 30 to 4 central. Of course, we'll send out information prior.

[e-mail]: Excellent.

[e-mail]: Let's go ahead and get into it. So, as we always have to do safe harbor provision. These are the opinions of Nick Webb, Mike Carrazzo, do your own research. This is not investment advice. Some of these, some of these look backs and predictions that mainly I had made back in January, February of 2024. I want to make it very clear I did not cherry pick these. I didn't do this on my own. These were sent to me by Mike. He went back and perused

[e-mail]: hour old podcast and came up with a list of things that he wanted to, he wanted to blast my face and see see how we did on on these predictions. So we're going to dive into those. I've actually got a couple more in addition to that, that Mike Mike, that Mike is not aware of.

Mike Carrozzo: Cool, alright.

[e-mail]: Little surprise for you, but

Mike Carrozzo: Love it.

[e-mail]: Yeah, let's go ahead and get it. So yeah, there's there's

[e-mail]: yeah. 1st prediction, yeah, go ahead.

Mike Carrozzo: Yeah, yeah. So like, like, you said, right? We we went back and and

Mike Carrozzo: like, I said, Take take your take your victory lap, because I think I think a lot of these things you said are well on. We got 5 to highlight here and we will try to grab one for each of the metals, a little bit of a macro as well. The 1st one is aluminum, as you see up here for those of you

Mike Carrozzo: on the video watching on the screen. So in 2024 aluminum prices are likely to experience upward pressure as unprofitable smelters

Mike Carrozzo: curtail production.

Mike Carrozzo: But then the market is expected to remain overall balanced with only slight surpluses. So how did that turn out, Mr. Webb?

[e-mail]: Yeah. So I'm going to provide a little bit of visual context while I talk about this. But one of the things we talked about for a number of months throughout this year, and probably even into 2023 was anytime lme aluminum prices tended to get around that 95 cent to a dollar per pound range.

[e-mail]: It seemed like it would find support. And and, as you know, fundamental research analysts would would write usually in that range. That was where he started to dig into the cost of producing or smelting aluminum ingot. So the idea there is. You end up getting this this floor, because if prices keep going lower and lower and lower, more and more smelters become unprofitable, so

[e-mail]: that acted as a floor, it had been doing so for much of 2022, 2023. And so the prediction was, basically, we think that that support is going to hold and not only hold, if more smelters do curtail production.

[e-mail]: could that actually provide an uplift prices? And I'm just going from January first, st through current pricing, and you can see the price of aluminum has gone from about right around a buck O 5 and maybe even slightly lower than that all the way up to a buck. 18, and maybe the reasons why are slightly different than what I predict, and I would say they probably are, because I I did not expect the price of bauxite and alumina to Skyrocket the way they did.

[e-mail]: So what that means is, you know, there's a raw ingredient called alumina that goes into the production of making aluminum, and there were a number of regions around the world, Australia, Guinea, a few other nations who are having supply chain issues in getting that raw material and the price of alumina jumped over the course of this year by about 100%. So what does that do? That further increases the cost at which you can profitably make aluminum.

[e-mail]: So that's provided a bit of that tailwind. But we have also seen some discussions coming out of China in recent weeks, where they're discussing further curtailing aluminum production just because that raw, that raw material move higher has really created a pinch for the smelters. So yeah, I expect that this support is going to continue in the coming months, but you can see it's very much so throughout the course of this year, while it did have some choppiness to it. The price of aluminum shown over on the left hand side did have a pretty decent tailwind behind it.

[e-mail]: and then, further on the right hand side, we've got midwest premiums, which

[e-mail]: you know they they were pretty flat for most of the year, but just in the last couple of weeks since we've we now know who the President's going to be starting in January. He's obviously a big, a big tariff person, and one of the risks out there is that Canadian aluminum ingot which they export a very large quantity of aluminum into the United States. There's a risk that those those aluminum ingots could get tariffed, and if that is to happen.

[e-mail]: we could see midwest premiums jump by a pretty substantial amount.

[e-mail]: The math behind that is effectively 25% times the price of lma aluminum, which is right around a buck. 18.

[e-mail]: That would add on roughly 25 to 30 cents to the Midwest premium, which, if you're if you're doing the quick math over on the right hand side of this chart, that's more than doubling the the Midwest premium. Now

[e-mail]: you can see that the market hasn't yet knee jerked all the way higher to 50 cents, 45, 50 cents, but it's certainly moved a couple cents higher. So what does that say? You know to me? That kind of says the market's pricing in a relatively low percentage likelihood that that's going to happen. But we're going to learn a whole lot more in the next 30 to 45 days around his seriousness in approaching Canadian steel and aluminum

[e-mail]: tariffs. So

[e-mail]: more more to come on that story. It's unfortunately it's a little bit one of those one of those things where it's just it can be the difference between a headline causing it to jerk 25 to 30 cents higher, or it just doesn't happen. And and premium stay down around these levels. It was interesting. I was on. I was on a call with a big customer of ours just a little bit ago, and he was indicating that their their executive team is actually viewing that risk of tariffs as being much higher. I, I personally am of the opinion that

[e-mail]: it's unlikely that those aluminum imports are going to get tariffed. But but yeah, they they had a slightly different take. So it's really going to be a bit of a coin flipped on midwest premiums.

Mike Carrozzo: You have that spike here in like in the March early April. Was that around the timeframe of the port in Baltimore,

[e-mail]: You know, I believe that was right. Yeah, yeah, it seems like it was just yesterday. But yeah, it has been has been a number of months there was. There was a risk that, because there was such large volumes going in and out of Baltimore that that could have had an impact there. But yeah, that is, I believe that that knee jerk hire right there.

Mike Carrozzo: Yeah. And I was talking to Jeff. Notice our supply chain director and aluminum the other day, and he was mentioning what you said about Canada right? I didn't realize how much of that export comes out of Canada, and that would add.

[e-mail]: Yeah, I want to say, it's like, it's like 80, 85%. It's a very large number. So yeah, that's you know, that's where you kind of have to weigh the decision of, you know. Do you want to be strong on tariffs, or or are you okay with? And are you okay? With the resulting inflation that it would have on canning companies and automotive companies? It's it's gonna

[e-mail]: there. There are definitely some big pros and cons to to that type of approach.

Mike Carrozzo: Yeah. But as you look back on this one, what would you say, Winner, did you? Did you? Did we accurately? Did you actually predict this one.

[e-mail]: I call it a pretty a pretty decent winner now, maybe, maybe for different reasons than I would have thought, or maybe there were additional reasons than what I what I simplified. But yeah, I mean the raw, raw ingredient of illumina, the fact that that price went up by a hundred percent certain certainly provided a tailwind. But yeah, I'm going to take the victory on this one.

[e-mail]: Alright one for one. Okay, 1,000. All right.

[e-mail]: Yeah.

Mike Carrozzo: Nickel talking a lot about that this year. Indonesia's rapid expansion of nickel production.

Mike Carrozzo: Now, you said, projected to account for 75% of the global output by the late 2,020 s. Now, that's going to continue to create oversupply. I already tell you that this is a. This is a yes, suppressing prices until significant production cuts occur.

[e-mail]: Yeah. So we beat this one to a pulp. Throughout the course of this year it was the entire theme of 2024, which was Indonesia continuing to ramp up supplies. And you know you can see over here on the right chart, that is, the supplies of nickel class one nickel going into the London Metal Exchange warehouse system, and you can see it's nearly tripled over the course of this 12 months, so that that side of the prediction very much so, Spot, on.

[e-mail]: What what I was surprised about was when I just put the starting point of the price chart over here on the left hand side as January 1st of 2024,

[e-mail]: even though the price has come down over the course of 5 years on a 12 month basis. It actually hasn't come off all that much when you just look at the starting point and the end point. Now, we've seen a lot of volatility in the middle ground. And so, if you're if you're benchmarking against May, we've come off drastically. If you're comparing against January to now to actually not come off all that much. So I'm going to call this a partial victory because the price really hasn't.

Mike Carrozzo: Collapse from the starting point to the end point. So I'm going to cause partial victory.

[e-mail]: And what's interesting we've talked about in the last couple months this $7 per pound mark on on nickel really seems as though it's been acting as an area where, whether it's for cost, cost, support reasons, or it's a technical reason. $7 per pound has really been an area that's held up decently well, even in the face of ramping supplies of nickel. So I think that's going to be an interesting one that we want to keep an eye on, because if that $7 area keeps holding, and the more consistent it holds.

[e-mail]: we could see a little bit of upside in nickel prices we roll into 2025, particularly if Indonesia takes its foot off the brakes a little bit on production, and there have been some rumors that they're considering that in the last couple of weeks.

Mike Carrozzo: Look at those inventories.

[e-mail]: Crazy, isn't it?

Mike Carrozzo: Yeah, I mean, that's that's insane. I mean, if you look at from January, what are you at? There now is that that's 1.6 4 million, that tons.

[e-mail]: Yes, we. It actually went from about 60,000 tons up to close to. I think we're currently sitting like 1, 64, yeah.

[e-mail]: 4,000 tons.

Mike Carrozzo: So is that going to? I I guess, looking into the year ahead, I mean not to not to project or not. Is there anticipated that those inventories are going to come down? Or is is that further exasperated right by the fact that perhaps, like Evs, might not be as strong with the new administration. I don't know what are your thoughts.

[e-mail]: Yeah, I mean, most analysts, most bank analysts and commodity analysts. They're they're still forecasting that the market's going to have surpluses. But there is an expectation that at some point Indonesia is going to say, Okay, we've we've bankrupted enough other competitors. We've driven the price down low enough that others don't want to play in this market anymore. We've done enough. And and then they start to actually slow some of their production capacity.

[e-mail]: at that point I think you can start to see some price recovery. You would probably start to see lme. Nickel inventories level off at the very least, I think before we before we see inventories coming down. I think the 1st thing we need to see is just a leveling off of those inventories. And so I think we? Probably, if I'm going to make a prediction, I don't want to get too far ahead of myself for February, but if I'm going to make a prediction. I would pretty confidently say that the rate of increases

[e-mail]: in 2025 for inventory levels is going to taper off a little bit. That's that's 1 of my predictions.

Mike Carrozzo: Okay. So we're we're saying, this one's a half.

[e-mail]: Yeah, I'd say partial victory.

Mike Carrozzo: Partial victory at one and a half, 1 1.5.

[e-mail]: Sure. Let's do it. Yeah.

Mike Carrozzo: All right, let's go steel. And again, these aren't softballs. I mean, these are where they're like, you know, this is definitely going to happen right? So we had a sharp rise in us. Steel prices due to constrained production and higher raw material costs. Check prices are predicted to experience significant deflation in 2024 supply catches up with demand.

[e-mail]: So this one, this is a pretty easy one. Almost for the entire course of the year. We saw nothing but month over month. Price declines. Now for the last couple we have started to see some stabilization certainly haven't seen things rip higher just yet, but but you can see it very easily. On the left hand chart. We went from starting the year out with hot roll prices up above a thousand dollars a ton.

[e-mail]: That means that pretty much every other sheet prices above a thousand tube prices, plate prices. They were all very, very elevated beginning of the year. And yeah, between a combination of just things coming back down to Earth, clearer heads prevailing, new supply coming online. All of those factors really helped to contribute to decreased prices over the course of this year. The other thing that helped to decrease prices over the course of the year was just the decrease of raw materials, things like

[e-mail]: scrap, which is shown on the right hand side. It's almost a mirror image of the price of steel, and that that makes sense, because 70 to 75% of the steel in the United States is made.

[e-mail]: buy electric arc furnaces which are using scrap to make that steel worth noting over on the very far right hand side. It hasn't been occurring for very long, but there is a very slight blip higher in the price of scrap, so could this be as we start to roll into 2025? Could this be a trend that continues as we roll into next year, which would then lead to a little bit of inflation in the price of steel. I think I think if I'm a betting man I'd probably say we're going to see slightly higher price

[e-mail]: in q. 1 and Q. 2 versus where we are right now, some of that's going to be due to seasonality. Some of that may be due to impeded scrap flows due to colder weather in the winter months.

[e-mail]: But you know, between all of those factors coming together, it looks like we could actually see a little bit of a move higher and a beginning of a trend higher, due to raw materials perking up a little bit.

Mike Carrozzo: Do you? Do you see? And and you know, not to give out numbers or anything. But are you seeing greater interest in in companies, customers looking to lock in pricing right now.

[e-mail]: Yeah, I mean, given the fact

[e-mail]: been, yeah. Given that we've been in contract season for the last couple of months. We've certainly been quoting and trading quite a bit of steel for 2025. There is a slight premium to do so, just given the shape of the futures curve. We've talked about that in prior months there is an upward slope. So each month you go out in the future there's a bit of inflation. But but that being said, if if price, stability, price, certainty is something that our customers have in mind, and that's something they desire.

[e-mail]: absolutely something we can do. And it is something we do quite a bit, not just in steel, but in aluminum and and stainless as well.

Mike Carrozzo: What's the and copper as well. Okay, what? What are the

Mike Carrozzo: tariffs, obviously are are a concern on the mind of steel buyers as well right these days.

[e-mail]: Yeah, yeah, it's interesting. I mean, even even without renewed tariffs on on other countries. Right now, I would say the import threat from a pricing standpoint, really, isn't there right now? Just given that us prices right now, let's say they're high 6 hundreds.

[e-mail]: If you contemplate the possibility that you know there's discounting involved, which I would say there still is discounting to the indices in the markets.

[e-mail]: You're talking about physical steel prices for hot roll that are in the mid to low 600 s. And yeah, the numbers that we're seeing from foreign suppliers just aren't really all that competitive or attractive relative, so I don't think you know, tariffs or no tariffs. I don't think the import penetration is is a massive risk, particularly in sheet products at the moment.

Mike Carrozzo: Alright. So you predicted prices would go down. That was kind of a that was kind of a given right. So let's give you a half on that one. So now you get 2 out of 3. Is that fair?

[e-mail]: Oh, come on!

Mike Carrozzo: Oh, all right. Okay.

[e-mail]: Think I deserve full credit on that one.

Mike Carrozzo: Alright! Okay, alright, alright! We got it. You have full credit, 2 and a half.

Mike Carrozzo: hey? That's really good. Convergence. All right. This is more about product. Mix right? So in 2024 pricing dynamics of steel sheets, tubes, and plates are expected to converge.

Mike Carrozzo: reversing the divergence seen in recent years and markets

Mike Carrozzo: aligned. So there was. There was a kind of a divergence. If I'm reading this right, the different products, right? So you're saying all those would have kind of came together more. So in 2024.

[e-mail]: Yeah. Yeah. And I hate to call anybody out on this. But if you recall, what was it a year ago, 2 years ago that we talked to to new core their their head of commercial.

Mike Carrozzo: You won't give that up right. You won't give that up that he called you out right.

[e-mail]: The worry was at that point. In time we had plate prices at extremely high levels relative to hot roll prices, and if we take a look at this chart. If you go back to 2,012 to through Covid Covid lockdowns.

[e-mail]: it tended to be the case, and I'm not going to do the math on it, but you can see it pretty easily with your eyes. There tended to be a fairly decent correlation between hot roll prices in pink, the price of tube which is going to be in the blue, and then the price of plate which is going to be shown in green, they they generally move it in lockstep with one another. I think, for the most part that kind of makes sense, because they're made from the same raw ingredients. They go into similar types of end markets.

[e-mail]: But what happened back in 2022, 2023, the price of plate just

[e-mail]: skyrocketed and stayed extremely elevated for for a long time much longer than I thought it would have. And yeah, I asked Mick Beamy from Nucor, I said, when is this going to correct? How can you explain that plate prices are so elevated relative to sheet prices? This makes no sense.

[e-mail]: and his response was, No, it does make sense. These are 2 different markets, 2 different end markets. You know the the world of plate is much smaller, fewer players, and and as such it should go under its own pricing dynamics, and you know

[e-mail]: he he's right. He is correct. He obviously knows the steel world very, very well, but even with that, I still said, I think that this is going to converge at some point. And you did have the addition of, you know, new production capacity coming online for plate, which is going to add additional pressure down on markets. So I fully acknowledge that there are some new factors that took place over the course of this year that that maybe weren't in fully in place when when we spoke to him last time. But

[e-mail]: but yeah, you're right. I'm not gonna let this die.

Mike Carrozzo: But yeah.

[e-mail]: But but very much so. You can see that the the price of plate which is shown in green has very much so converged back down closer to to how roll prices.

[e-mail]: Yeah, I think that was about 2 years ago we spoke with, I think we

[e-mail]: think it might have been March March of 2023. I think it was so.

Mike Carrozzo: Yeah.

[e-mail]: Again it took he he was for the most part right at that time, and it took a long time for it to converge. But.

Mike Carrozzo: I got. I got him this time.

Mike Carrozzo: Yeah, there you go. Yeah. You waited. You waited them out long enough.

[e-mail]: And and this is just a different visual way of showing the same thing. This is looking at hot roll prices relative to plate prices. There's a lot going on here. But ultimately, if you look down in the bottom left quadrant of this that's showing the relationship of

[e-mail]: plate pricing relative to hot roll pricing, and you can see 2016 through 2020 tended to be a fairly consistent spread of somewhere around 100 to $200. What's interesting is for a very short period of time. In 2021 hot roll prices actually went

[e-mail]: upside down and and be became a premium product to play. So the the exact opposite actually happened for a short period of time. And then you can see the craziness that that we were referring to, which is, for about a year and a half, almost 2 years.

[e-mail]: Price of plate relative to hot roll was was inching up, you know, close to a thousand dollars a ton for a period of time. So just, extremely, extremely elevated levels. But, as you can see, that roller coaster ride is coming to an end for now, and it's all the way back down sub. $200 at the moment.

Mike Carrozzo: Another another hit there for you.

[e-mail]: I'm I'm gonna call that one a win. Yeah.

Mike Carrozzo: 3 and a half out of 4. Okay, alright,

Mike Carrozzo: So we took a macro one, and and this, you know, for long time, listeners. This was a storyline for the longest time, right waiting out China's

Mike Carrozzo: to come or not to come. Stimulus package package following Covid. Right? But

Mike Carrozzo: you know, they're a large consumer of metals and will remain the driving force. I'm sorry. Dominant force driving global prices with strong demand in technology and infrastructure sectors balancing out the weakness in the property market. So I think the prediction here. The projection here right is

Mike Carrozzo: weakness in property, but the strong demand from tech and infrastructure coming out of China right.

[e-mail]: Yeah, yeah, it's kind of a kind of a complicated prediction. But yeah, that's how I would summarize it as well that there, that there would kind of be a divergence in end markets, and and this one, maybe I should ding myself a quarter of a point just for the prediction in of itself, because.

Mike Carrozzo: Quarter of a quarter.

[e-mail]: Yeah, quarter, just a quarter, just a quarter point, because if we were wound back to January of 2024, I would say this phenomenon was already taking place and had been taking place. So this is more of a suggestion or prediction that it was just going to continue taking place, and, as you can see in these 3 charts, we've shown these in the past. But this is fixed asset investment into 3 different subcategories within the Chinese economy. Chinese economy

[e-mail]: left hand side showing manufacturing. Obviously 9.3% investment growth year over year. That's a that's quite a strong number. So that's going to be things like automotive build outs that's going to be technological build outs. You got the middle section, which is infrastructure. So that's going to be things like the electrical grid. Maybe some energy infrastructure things like that growing at 4.3%. Not a bad number, not a not a stellar number, but a pretty okay number

[e-mail]: But then over on the right hand side, you've got the black eye of china, which is the fact that their fixed asset investment is down 10.3% year over year. Which is it's it's similar to last year. But it's actually incremental, even worse on a percentage basis. And and so you can see that these themes of strong manufacturing, strong infrastructure and weak real estate. It's not necessarily new. The prediction is more, that we were going to see it continue, and that that was going to have an impact

[e-mail]: on on metals, markets. And and you know what I would

[e-mail]: where I would say we got this pretty right, and again it was more of a continuation of the same theme. But this is looking at aluminum and copper prices in blue and orange relative to steel prices in China. And so the argument here is, if you've got weak property, real estate sectors that's going to weigh on things like steel rebar steel sheet. It's going to weigh on cement prices because you're going to have fewer, fewer high rises and big big buildings being built for people to live in.

[e-mail]: and I would say that that has been the case. You can see for the last several years. There's just been every single year a bit more degradation in the price of Chinese steel, you know, could also make the argument. They just have too much production which is also weighing on prices, but there's no doubt about it. Their their investment into the property sector is, is quite weak. Still, to this day.

[e-mail]: I think that's going to improve in the coming year or years as they as they launch more stimulus. It does look like in the last week or so they've taken a much more serious stance on trying to support consumption. And and the the end users. So I think that's that's eventually going to feed through to a stronger.

[e-mail]: a stronger market, not just for the consumer, but also for for commodities.

[e-mail]: But what's interesting is when you compare steel pricing to copper and aluminum, which, I would argue is more heavily going to go into things like the electric grid and the production of electric vehicles. And you know, green energy, solar wind farms, whatever it may be.

[e-mail]: those markets are much more supported. And I think that's what they're seeing in some categories. And

[e-mail]: and then the we've had property here.

[e-mail]: So I'm going to call this one a win, Mike.

[e-mail]: So but okay, only only 3 fourths of a win.

Mike Carrozzo: Yeah. So so if I, if my math is correct, 4 and a quarter out of 5.

[e-mail]: We'll we'll go 4 and a quarter out of 5. Yeah.

Mike Carrozzo: Wow! That's impressive. I mean all kidding aside. As a hitter you'd be. You'd be

Mike Carrozzo: just good enough for the cubs that want to trade you because you'll you'll be commanding too big of a salary. But you're I mean, and all kidding aside that you know, these weren't series weren't softballs by any means. I mean, I think I think there's some good guidance going into into the year, and you should tip your cap.

[e-mail]: There's some. There's some good news and bad news in this, you know, being a risk manager, you know, when you have a risk management hammer. Everything looks like a nail, and unfortunately, in the year of 2024,

[e-mail]: I would make the argument that my job

[e-mail]: this was a perfect year for a risk manager. You know, you can be bearish, and you can be right. And in many of these things these were downward type predictions. And we saw a lot of downward type moves, and I would say whether you're looking at China, whether you're looking at Europe, China's property sector, namely, Europe. Even parts of the United States, I would say we have seen some weakness in end markets over the course of this year.

[e-mail]: It volumes have been slightly down. Prices have certainly been down throughout throughout most of the year, and so for risk manager, if it fits my mold. What I'm supposed to do, as you know as a risk manager for Ryerson. It fits it very, very well.

[e-mail]: That's not going to happen in every year, I can tell you. A risk manager was not something. Who was a you know I wasn't a a hot commodity back in 2021 when steel prices were going to $2,000. You know, our salespeople were, you know, selling metal for for large amounts of money. But but a very different story. Yeah.

Mike Carrozzo: Yeah, no, it's still still debating the one about you predicted steel prices are gonna come down. I mean, that was kind of a given, but we'll take it all right. Nice job, nicely done.

[e-mail]: That being said, I'm not going to pet myself on back. I'm not going to rest on my laurels. I got some things wrong, and and so we're.

[e-mail]: I'm today, years old that I learned about the humble hedgehog. Apparently this is some like cartoon character that exists on the Internet. I'm going to throw myself under the bus on a couple of things that I got wrong this year.

Mike Carrozzo: Okay, I I've never heard of humble Hedgehog either.

[e-mail]: I'm gonna have to do a little bit more research on it, because I just learned about it earlier this morning.

Mike Carrozzo: Is it like a game or a show, or is it like something you.

[e-mail]: I think it's more like an online cartoon like comic.

Mike Carrozzo: Yeah. Gotcha. Okay, check out.

[e-mail]: Hundreds of different characters. But I'm going to be humble hedgehog today.

Mike Carrozzo: Gotcha. Okay.

[e-mail]: I don't get it all right. What we're looking at here literally. Just 30 days ago I made a prediction, and I, for now I'm looking dead wrong on it. My prediction was based on the way the price of United States steel stock was performing post elections. I made the prediction that I thought the odds of the acquisition from Nippon Steel to us steel was getting more and more likely to to go through

[e-mail]: for those who don't know the details. It's currently under Cfius Review that Cfius Review basically is monitoring whether or not it's good for national security essentially. And their their ruling is expected to come. I believe it's on December 23.rd

[e-mail]: And so it's not until that point in time that that you know, Biden at this time can make a ruling on whether or not he's going to allow it or not. But

[e-mail]: But that being said about a week ago, Joe Biden hit the headlines, and he said, I am definitively going to block this deal, and you can see, just in the last couple of days the stock price of us. Steel has has dropped pretty pretty substantially and month over month versus 30 days ago. The price price of stocks now down 10%, which is just. It's it's 1 way of reflecting the idea that the odds of this acquisition are going down very quickly.

[e-mail]: you know. Is there still a possibility that something could happen absolutely. I would say there is if the Cfius Review goes positively, and they rule that it's allowed to go through.

[e-mail]: Maybe Biden doesn't want to allow it to take place. But perhaps you know, the new administration allows it to go. Or maybe the the structure of the deal maybe looks different. Maybe Nippon Steel buys certain assets, and then somebody else buys other assets. I think there's going to be more to the story personally, but at least for now I've I've gotten this one dead wrong in the last 30 days.

Mike Carrozzo: I'm not wrong, didn't didn't trump come out and say he wouldn't be in favor of that either.

[e-mail]: He? He has. Yeah, he has. Now, that being said. And while we're on the topic, he also did say, about a week ago, via social media, he said.

[e-mail]: Any company that makes an investment over 1 billion dollars into the United States. He wants to essentially fast track the approval process, the permitting process, the ability to get things done, whether it's a foreign entity or domestic entity. It's just a way to say we want to incentivize investment in this country. Now I kind of step back and say, Well, wait! Wasn't Nippon making the promise that they were going to invest billions of dollars in the United States.

[e-mail]: That kind of goes in the face of what trump has been tweeting. So maybe there's more to the story. Maybe maybe Nippon can say, Hey, we're going to invest 3 billion dollars or 4 billion dollars. And maybe that's that's the incentive that maybe gets him to to come off his line.

Mike Carrozzo: And for those who got you, said Sif Cfius.

[e-mail]: Yeah, it's CFIU. S. It's.

Mike Carrozzo: 7.

[e-mail]: Going to blank on the acronym. But it's the center for foreign investment. And yeah, I'm gonna stop there. But it's it's basically monitoring whether or not you know, activity from foreign entity is safe within the United States.

Mike Carrozzo: Okay. Yep. Wasn't familiar with that. Okay? So.

[e-mail]: I only put this chart in here for, because it looks like a Christmas tree, and and we're in the season. But you know, if if we were to go back to the and I didn't state this publicly. I don't think on any cup of Joe's, but if you told me the stock market was going to be up nearly 30% in the United States in the face of

[e-mail]: higher interest rates. And you know, 5.5% interest rates, I would have said, I don't think that's possible. I would have said we'd be closer to the later stages of the economy doing well, and perhaps maybe we even start to see some sort of softness or something looks like a recession.

[e-mail]: So it's interesting that, you know. In my opinion, we we have seen, and maybe even are slightly in what what feels like a manufacturing recession. But even in the face of that we still are seeing over there on the left hand side of this chart. Stock markets have performed so incredibly well this year, and and I'm just going to go on record and say, I didn't expect that I would have gotten that wrong at the beginning of the year.

[e-mail]: Now, while we're on this chart, you can look at all the other asset classes and asset categories. The United States is absolutely the bright spot within within the equities markets. Now, the one thing I would caveat that with is, it's not all all things going up. It's not all things hitting record highs. A lot of that is being carried by the magnificent 7, which is your very large market cap companies that are most heavily tied to technology.

[e-mail]: And as we were, we've referenced in a lot of cup of Joe's. The services side of the economy is still going gangbusters. It's still quite strong. So that's been where a lot of the leadership within those markets come from flipping over to the far right hand side, looking at commodities.

[e-mail]: you know, if you look at at a broad-based index of commodities, they actually are slightly up. But you know, as we talked about

[e-mail]: many of the metals that we cover, whether it's nickel prices or steel prices. Many, many of the things we we watch here on Cup of Joe are actually down year on year. So a lot of that's really being carried by, as you can see in the chart, precious metals. Price of gold's up massively. Price of silver is up massively and and and that's a bit of a surprise as well, particularly given the fact, we had high interest rates.

[e-mail]: The other thing that that I would say

[e-mail]: I got wrong from 30 days ago is.

[e-mail]: I did mention the fact that cryptocurrencies were gaining a bit on the fact that Trump was in office, and allegedly Donald Trump's son, Barron is is a big big into Crypto Guy and I. We did make the reference that crypto prices were hitting record highs. Now

[e-mail]: I kind of thought that was going to be it. It was going to be an election related rally, and that was going to be all we saw. Well, lo and behold, as you look at this chart, since the elections, the price of bitcoin is up 51%,

[e-mail]: which you can kind of see it up up in the very, very top right of this chart, but it it attempts to annualize that number. It's over a thousand percent annualized

[e-mail]: asset classes. Typically don't move like that. There's there's a mania going on in cryptocurrencies. And again. This is not investment advice. I am not at all saying you should invest in this.

[e-mail]: Quite the contrary. I'm here to say I got this one wrong. I did not think that this was going to happen. Post elections, but it's it's been crazy, and

[e-mail]: maybe you'll have to edit this part out. But

[e-mail]: there's actually a crypto coin out there. I looked it up just before we hopped on here. It's the 212th largest cryptocurrency. It's called Fart coin.

[e-mail]: and.

Mike Carrozzo: Really.

[e-mail]: Fartcoin now has a market cap of half a billion dollars. So there's some crazy, crazy stuff going on in the crypto world. I'm not here to claim that I'm an expert in it. I am definitely here to admit and take my humble pie and say that I am not.

[e-mail]: I'm not generating the returns from those rallies. I'm not involved.

Mike Carrozzo: Blown away.

[e-mail]: Yeah, that's right.

Mike Carrozzo: Yeah. Well, what what is going on with like,

Mike Carrozzo: I mean, what? What's the I mean? Like you said there could have been a little post election

Mike Carrozzo: bump there, but like what's continuing to

Mike Carrozzo: to to put it on that upward trajectory.

[e-mail]: Well, I guess

[e-mail]: if if you were to ask a crypto fanatic or crypto Maximalist, I would say that their argument would probably be.

[e-mail]: The United States continues to be a deficit spending nation which should be destructive to a fiat currency like the Us. Dollar

[e-mail]: and should benefit things like gold and

[e-mail]: cryptocurrency, Bitcoin, which are allegedly finite. So those those should be the beneficiary of a

[e-mail]: a weak dollar policy and deficit spending the other factor that's changed in the last 30 days is there has been speculation that the new administration is going to put in place a cryptocurrency reserve literally like almost like how we have the strategic petroleum reserve which is a reserve of oil and energy products

[e-mail]: to to be there in the case of emergency, like a war or something like that.

[e-mail]: The argument from some is that the the Us. Government is going to put in place a cryptocurrency reserve, and they're actually going to load up on a bunch of cryptocurrencies, and they're just going to sit on it, and it's going to act as some sort of

[e-mail]: backing to the currency, almost like the gold standard back in the seventies. So those those are the. Those are the arguments, whether or not those things are legitimate, or make a ton of sense. That's for somebody else to debate. We are not a cryptocurrency podcast.

Mike Carrozzo: Gotcha interesting? Yeah. Just for the record. Scott, one of our listeners has confirmed surface. Is the Committee on Foreign Investment in the United States.

[e-mail]: I got it.

Mike Carrozzo: Yeah, very close.

[e-mail]: Scott appreciate it.

[e-mail]: And last, but not least.

Mike Carrozzo: Oof.

[e-mail]: So I am not. I'm not advocating for sports betting, but I will admit that beginning of the season actually not even beginning of the season. All the way back in January of 2024 that is my betting slip. I made a very small bet on Ohio State to win the National Championship. I thought they had all the pieces there to do it, and and even after the loss to Oregon, I was still feeling pretty okay, because it was a 1 point loss.

[e-mail]: We we come into the last game of the season against Michigan, our arch rival. We're 20, I think it was 23 point favorites, and we looked like garbage. And so I don't have a whole lot more confidence in this. So I'm just, even though we're in the playoffs. I don't have a whole lot of confidence right now after that game that we've got the coaching staff or the aggression to to win these games we have coming up. We've got a tough road ahead, because I think we probably have the toughest route to get to the championship game. But, man that that stank and.

Mike Carrozzo: Yeah.

[e-mail]: Questions to anybody in the Michigan area, or who's a Michigan fan?

[e-mail]: Yeah. The the bed, the bed on the right is not looking all that great right now.

Mike Carrozzo: Things get a little testy at the end of that game, too.

[e-mail]: Sure did.

Mike Carrozzo: Like, there. Yeah.

[e-mail]: Yeah, sure, did, yeah, so.

Mike Carrozzo: Yeah.

[e-mail]: All right. We're going to bury that when we're never going to discuss that ever.

[e-mail]: And I hate to say that I noticed the number of questions actually went up while I was presenting on the slide. So that doesn't make me feel real good.

[e-mail]: So.

Mike Carrozzo: Well, good! Well, eating some humble pie there.

[e-mail]: That's right. I've got a couple things on the macro side that I want to touch on. But while we're on these these Macro slides I want to touch on looking forward to the next 2 months from now. So Mike had mentioned that in the month of January we've got a couple pieces to our made in Mexico package and then coming back in February. You're going to be getting a lot deeper dive into the macroeconomic factors that are driving metals, markets, manufacturing markets.

[e-mail]: You're also going to get a lot more predictions from myself and forecasts for the next year, which hopefully, 12 months from now we can come back and review. If those did any better or worse than than 2024, it's going to be hard to beat. It's going to be hard to beat this year. But

[e-mail]: yeah, just wanted to tease that out there. That that'll be in the beginning of February for those next predictions.

Mike Carrozzo: Yeah.

[e-mail]: With that said, I, was on a podcast with a hedge fund manager and asset manager called Double Line, and they've got a manager by the name of Jeffrey Gunlock, and he always does a fun, a fun way of breaking down markets and things like that. And you know, in his opinion. He was kind of saying, there are 2 different ways. You can look at inflation, and in his opinion

[e-mail]: you've got the left chart, which

[e-mail]: which he believes is how economists and maybe even politicians, look at inflation, which is, you look at it on an annualized basis. If you look at the left hand chart. What do you see? You see a big spike up in the last couple of years, but now you've seen this reversion of it coming back down into something that looks more like a normalized range. So almost almost like a success story for the fed that they've achieved their goal. And we're back down into a normal range. So that may be how an economist looks at that and says it's time to ring the bell. We've made it through inflation

[e-mail]: now, in his opinion, and I tend to agree with it. There's what he kind of believes the consumer. Maybe your everyday man or woman within the United States, how they may look at inflation on the right hand side, which is.

[e-mail]: look at it on index basis. Go all the way back and index it to 1984, you draw on this trend line. You can see that for the better part of about 40 years we've been on a fairly consistent, steady journey of inflation where, yeah, over time prices go up. But the good news is your incomes also. Go up your home prices go up hopefully. The stock market continues to perform well, and you can combat that inflation with other means of income and wealth.

[e-mail]: What's fascinating over the last couple of years is, even though the left hand chart kind of looks like a success story for the fed. The right hand chart kind of says we've very much so deviated on an inflation standpoint from this trend line, and we have come nowhere close to getting it back on that trend line. If you just kind of draw out that line and forecast it forward a few years.

[e-mail]: It looks like it's not going to be for years and years that that inflation trend line is going to get back to where it's been over the last 40 years. So I just thought, this is an interesting way to depict. The story of

[e-mail]: this could be one of the explanations as to why many in America say costs are still too high. We're struggling to pay for things, even though maybe DC. And and the fed is kind of ringing the the bell and saying.

[e-mail]: We've we've hit our inflation targets.

Mike Carrozzo: So what are the pink? What are the pink lines indicating.

[e-mail]: Yeah. So the pink lines are going to be historical recessions.

Mike Carrozzo: So 4 sessions. Okay.

[e-mail]: Yeah, yeah.

Mike Carrozzo: So we kind of have a thin line there. 2020. Nothing official, right? Because it's not an official

Mike Carrozzo: recession. Right? The 2022. Okay.

[e-mail]: Yeah, they did technically declare one for a very short period of time during the Covid lockdowns. And I think rightfully so. It was.

[e-mail]: Market, and markets were in a pretty bad spot, and some of that was mandated. But but yeah, that that was the last one that we've seen. But it was very, very short lived. So,

[e-mail]: yeah, I thought this was a very interesting way of looking at the inflationary picture, particularly in the light of elections, and what people seem to have issues with over the last couple of years.

Mike Carrozzo: Yeah. So if I read this right, it's consumers. Yes, acknowledging prices are going up. But it's fine, because

Mike Carrozzo: incomes coming up, and and it can kind of handle it right, but that.

[e-mail]: Until recent years, where we've actually seen costs go up at a more exorbitant pace.

Mike Carrozzo: Makes sense. Yeah, that's a that's a that's an interesting way to look at it. And I would think that that would be pretty accurate. Particularly how economists look at inflation, for sure.

[e-mail]: Yeah, yeah, definitely.

Mike Carrozzo: Good stuff, and this is double lined.

[e-mail]: Yeah. Double line is the is the asset management firm that I think they do. Maybe like once a quarter, they'll do a podcast try and keep an eye open for it. You can visit our website and.

Mike Carrozzo: Yeah, it's good stuff.

[e-mail]: But with that said, even though in inflation.

[e-mail]: is close to the Fed's goals, and even though inflation is still well above the consumer's goals as that last page showed, there's still 98% odds, as you can see up in the top middle of this page 98% odds. The Fed is actually going to continue cutting

[e-mail]: at their next meeting next week. So I find that very interesting that we still have inflation running above trend. You know you still have people feeling the pain from inflation, and yet the fed is cutting interest rates, which actually is a supportive thing for prices.

[e-mail]: So what in the world are they thinking? What in the world could they possibly be looking at? I think we made reference to this last month, but

[e-mail]: in my opinion, the fed is looking at the employment picture, and it is outweighing the importance. For now of the inflationary side of things. I didn't mention this 2 slides ago, but we did just this morning get

[e-mail]: Producer price index numbers, which is kind of wholesale inflation. And it it was a bit spooky because expectations were for a month over month increase of 0 point 2%. The actual numbers came in at 0 point 4%. So literally a doubling

[e-mail]: of where expectations were.

[e-mail]: I would have thought that this percentage of cut the the market's expectation the Fed was going to cut. I would have expected that number to come down in the in the, in the face of that

[e-mail]: higher than expected PPI number didn't budge. The odds are basically locked in that the fed is going to cut, no matter what. And why is that? I believe it's because they're very much so keenly watching the employment side of things.

[e-mail]: You can see it, you know. You look back over time we've touched on this chart quite a bit. The unemployment rate, and it's its momentum either to the upside or downside, tends to have very strong implications to

[e-mail]: whether or not we're heading into a recession or not.

[e-mail]: I drew in this this pink line, which is the 12 month moving average we have now ticked above that. You can look back at various points in time over history, and see that

[e-mail]: oftentimes, when

[e-mail]: you know, the momentum ticks above that 12 month moving average. It tends not to stop until, or unless it hits one of those red brick walls which is, which is an official recession. So you know, this may be something that trump, and the new administration is going to have to deal with that r word.

[e-mail]: But but I think this is definitely why the fed is still acting to try and bring rates back down to a normalized range.

Mike Carrozzo: You think there's there's some that are saying that that recession recession is never good, but like it's almost needed in in some case to

Mike Carrozzo: break this.

[e-mail]: It's possible. Yeah, I mean it is. It is certainly possible. I mean, this is where you come down to the proverbial soft landing, hard landing, no landing. Yeah. I think I think the goal is to cause a little bit of pain, but but hopefully not too much pain.

[e-mail]: I was talking to this customer just before I hopped on here, and I brought up the idea that.

[e-mail]: And I don't want to get too deep into politics. But even this notion of like the Doge group, which is Elon and Vivek where they're they're hoping to go into DC. And and make it much more efficient and

[e-mail]: maybe cut spending which may result in cutting cutting jobs. That's another thing I think we want to keep an eye on, because, you know, again, not talking politics too much, but if they are successful in doing what they say they want to do, which is cutting excess, spending, cutting excess jobs

[e-mail]: that could actually feed into a higher unemployment rate, which would actually be a disservice for that administration, because it would speed up the rate at which job losses are occurring. So I think that's going to be an interesting thing to watch here in the coming months, as well.

Mike Carrozzo: Definitely.

[e-mail]: Now, that being said, even though we may be seeing the broad employment picture getting a little softer, there's some things in the manufacturing world that are actually getting a little better. And

[e-mail]: I don't want to call.

[e-mail]: I don't want to call a victory yet, or call a turning point quite yet, because we want to see more of these data points as we roll through the next few months. But

[e-mail]: as we look at the global Pmis, and I've I've highlighted the main, the main areas and main regions. We watch which is China, the global figure us, Canada, Mexico, and then Europe. You look at the July through October timeframe, and that was some pretty weak data. It didn't feel good at all. Volumes were decreasing out to end users. Prices continue to come down.

[e-mail]: And that's really the area where I would say, that's that's what led me to believe. We kind of did have a bit of a, or maybe still are, having a bit of a manufacturing recession, where volumes are volumes a bit squishy. The manufacturing Pmis are all ticking sub 50, which is, which is year over year declines. But what's interesting is, in the last 2 months we've begun to see some of these major regions turn a little higher, not Europe. Europe is still a disaster zone, but

[e-mail]: the Canadian numbers ticking up to 52 China's numbers ticking up to 51.5. Even the global number is now back to flat. There's a possibility that we've already seen the damage on the manufacturing side of things, and we're already beginning to emerge out of it, which you know. That's a bit optimistic. That's a bit hopeful.

[e-mail]: But I think you know you. You include that with the fact that season seasonally wise. January, February, March tends to be a pretty pretty good time for manufacturing conditions and and market demand, so you know.

[e-mail]: one month or 2 months doesn't quite yet make a trend. But there's a chance that we could be seeing a little bit of optimism. I think some of that

[e-mail]: again, not to talk too much politics, but it seems like there have been a lot of. There's been a lot of investment that was sitting on its hands waiting for

[e-mail]: any result, any type of clarity, whether whether it was Harris or or trump. I think people were waiting just to see some sort of clarity, and some of that could feed into more investment. Here, domestically.

[e-mail]: interestingly, the Conference Board leading economic indicator, which is a compilation of about 10 different indicators. It's kind of corroborating that Pmi data, which is the worst, may be behind us in terms of the declines. And even though we're still in negative territory, both the 12 month and the 6 month annualized figures are sitting right around negative 4%. You can decisively see that the trend is heading back towards

[e-mail]: something that's flattish, or or maybe even it gets into positive territory. It does kind of sync up with those Pmi numbers we're seeing. And if we, if we include the fact that China seems to be taking a more hard stance on stimulating their economy, using language that they haven't used since like 2011. There's a chance that provides a bit of a live rising tide lifts all boats phenomenon as well.

[e-mail]: So with that, that's you know I gave you a little bit of a sneak peek into some of the potential things we roll into 2025. I think there are some factors that we should be watching that should give us a bit of optimism for the manufacturing markets.

[e-mail]: and yeah, I look forward to getting into our predictions for 2025. And hopefully, we get anywhere near the type of success we had in 2024.

Mike Carrozzo: Yeah, yeah. Well, you you throw in the ones that you threw yourself under the bus. Right? Was that 4 of them.

[e-mail]: Before that I threw myself, and I got plenty more wrong.

Mike Carrozzo: Brought down your average. Yeah.

[e-mail]: Ask my wife. She'll tell you.

Mike Carrozzo: You know, truth be told this this is it's it's a hard thing right to predict. And and these past few years have been anything but but normal. But I mean, I think,

Mike Carrozzo: the data shows that. I mean, there's

Mike Carrozzo: going into 2025, I mean, I think I think like you said.

Mike Carrozzo: pardon me, lot of. I think a lot of

Mike Carrozzo: a lot of folks now that there's clarity in what's going on in Washington it could could provide a little bit

Mike Carrozzo: more guidance. Whether whatever side of the aisle you're on it certainly should be pretty interesting. And I mentioned earlier. I was talking to some of our supply chain directors that do a kind of a year end analysis that we put out

Mike Carrozzo: in our monthly market report, and

Mike Carrozzo: all 3 aluminum, stainless and and carbon mentioned. You know, the the biggest thing on on they're getting asked by customers is the tariffs. And what? What's the what's the likelihood? It's gonna happen. And what's

Mike Carrozzo: you know? What's gonna what's the impact? And and that's where the aluminum one really stood out to me right, because I had no clue how much was being produced in Canada, and and it struck me like how hard that would rise, the

Mike Carrozzo: rise up the the midwest premium cost, but it makes sense and you know, like you said

Mike Carrozzo: some say yes, but you will talk to a few that said, there's probably a good indication. Who who knows? Until January.

[e-mail]: Yeah, I mean, it's an interesting thing. And again, I don't want to spend too much time in the political realm and predicting the mind of the mind of Donald Trump. But in some ways, unfortunately, fortunately or unfortunately, we have to talk a little bit of politics because it does impact metal prices, and, as you mentioned in the case of aluminum.

[e-mail]: a 25% tariff on Canada

[e-mail]: wouldn't just be a slight increase. It would increase just the premiums alone from about 20 cents to close to 50 cents. So that's that's meaningful. And and not to give a plug to myself. And what I do we do have the ability to hedge midwest premiums and Midwest Midwest aluminum ingot? So if that's ever of interest, we can certainly have that discussion.

[e-mail]: Now, I, personally, as I've been talking with colleagues, I personally have a relatively low probability in my head of

[e-mail]: of the Canadian tariffs, particularly for aluminum, because it's it's in its potential impact on inflation. It would be meaningful. It would be quick. And

[e-mail]: and for that reason I don't think it's going to be taken. But what's interesting to watch is whether it's Canada or Mexico

[e-mail]: already, you know. And I would say this has been happening for the last several weeks.

[e-mail]: There have been a lot of administrators in both Mexico and Canada who are already coming to the table and seemingly

[e-mail]: not waving the white flag exactly, but definitely suggesting that they're willing to to talk and and willing to negotiate and wanting to negotiate. And

[e-mail]: again, I don't want. I'm not in the mind of Donald trump. But I think that's the point. I think the point is, we're going to put a bazooka out there as a threat, and then you're going to come to the table, and you're going to make certain promises, and if you make those promises we'll pull the bazooka back. And I I like to hope and think that that's how this is going to go. I'd see Nbc on yesterday afternoon.

[e-mail]: and one of the head one of the head government officials for Ontario was was basically on Cnbc, almost begging and pleading to to negotiate and talk to us and work with us. And

[e-mail]: was it was effectively bragging about how how much business they they do and want to do with the United States and and those things.

[e-mail]: That's how negotiations work. And I think those things can be good for both sides, and I hope they are good good for both sides. Unfortunately tied up in all that. Rhetoric is going to be

[e-mail]: a lot of social media posts that are going to be agitating and frustrating, and all that. But

[e-mail]: but there is method to the madness. In some some capacity it seems.

Mike Carrozzo: Yeah, well said, well said, it's a it's a nice little precursor to again in January, our main Mexico series, one of the the gentleman. We spoke to talks about kind of navigating customs, and and we talk a little bit of tariff in there, and it was, I think we did those interviews like? Is it a week before or after the election? Right? So we didn't get too much into the effects there? But I think the the idea is how to navigate that and

Mike Carrozzo: if you're moving production out to

Mike Carrozzo: into Mexico, so I think it'll be a fascinating discussion. And so even though we're going to be gone for a month, we we gave you a few episodes there to to kind of fill the void. If you will. And

Mike Carrozzo: I just want to take a moment to say, Nick, you know, every every every time we do this I get I get a little much smarter on the metals world. So I appreciate these times all the time, and I know our audience does as well.

Mike Carrozzo: I want to wish everyone a happy holidays. Spend a great time with your family and friends, and, you know, keep keep in contact with your set, Ryerson sales rep

Mike Carrozzo: for how things are shaken out, but as always want to give you the last word here.

[e-mail]: I don't have much to add to that. I'm thankful for you, Mike. I'm thankful that you and the marketing team, Jason and everybody you know, put together this podcast nearly what? 3 years ago.

Mike Carrozzo: Yeah, it's going strong.

[e-mail]: Strong, but having so much fun with it, and we hope our customers are enjoying it and getting something out of it, and and, as always. You know, as we head into 2025. You've got ideas. You've got topics you want us to discuss. We absolutely want to. But in the meantime, have a have a great and healthy and safe holiday season, and

[e-mail]: we'll we look forward to celebrating more and learning more in 2025.

[e-mail]: Talk soon. Thanks, Nick. Bye.