More good news on the economic front

Despite a fourth quarter plunge (to just 1.1 percent) in GDP growth, the U.S. economy is still humming along, according to Edwin Scott, author of the February ISA Materials Market Digest. Growth in the current quarter is expected to rebound to something in the 3.5 percent to 4 percent range, and the last quarter’s figure could well be revised upward. Despite some slippage, the housing market is far from depressed, and nonresidential construction is going and growing. Best of all, consumer confidence as measured by the Conference Board just hit a three-year high, a sign that augurs well for the retail sector.

Steel — U.S. demand for steel appears to have firmed in January, with capacity utilization inching up a bit. After a down start, scrap prices recovered toward the end of the month, with significant increases in bids at the most recent factory bundles auctions. However, strengthening demand for flat-rolled products hasn’t boosted prices. Imports, especially on the West Coast, are keeping a lid on increases. In the tubular sector, the same is true of standard pipe, where Chinese-made product is the major influence. But the trend in oil country tubular goods is still up as operations in the oil and gas fields continue to run at near capacity.

Stainless Steel — The divergence in stainless pricing, with increases ongoing in specialty grades and prices flat in commodity stainless, seems to be ending. The past month has seen the major U.S. producers of commodity grades raise prices and at latest report, the boosts are sticking.

Copper —The 16-day strike at Codelco, Chile’s state-owned mining and refining monopoly was nominally settled late in January. But labor unrest continues and the possibility of future stoppages is an uncertainty helping to keep prices in orbit. At month end the London Metals Exchange quote eased a miniscule $5 but remained above $4,700 a metric ton. And many traders still expect an upside break through $5,000.