Issue link: https://read.dmtmag.com/i/1504191
I DA U N I V E R S A L Au g u s t - S e p te m b e r 2 0 2 3 43 metal commodities remain in high demand thanks to government funding. However, even infrastructure must contend with elevated construction costs due to infl ation. Rebar, for instance, bottomed out on June 8th and did so below support zones. The shift in pricing hardly proved surprising. Indeed, mill lead times for steel recently hit a low not seen since August of 2022. In the case of steel, this type of movement typically indicates a price reversal. The warmer months of the year also help add support to the construc- tion sector. With warmer temperatures and longer days, construc- tion becomes easier, but also more rigorous. These factors will continue to support infrastruc- ture and the construction of buildings and housing. Despite this, overall demand for metals continues to struggle, which will work against construction initiatives in the short term. Debt Ceiling Woes: How Will They Impact Construction? Debt ceiling issues in the U.S. dominated headlines for months due to the enormous consequences that come with breaking the debt ceiling. Indeed, doing so would not only Stainless Steel Automotive Renewables* Aluminum Construction Global Precious Metals Raw Steels Copper Rare Earths threaten construction but could be catastrophic for the U.S economy as a whole. In fact, the crisis has already signifi - cantly disrupted fi nan- cial markets, harmed housing construction, and worsened corpo- rate economic circum- stances. This also means that contract awards or orders could end up on hold. Should the debt ceiling situation continue, the U.S. construction sector will feel the impact for months or even years. Therefore, contractors will have to make diffi - cult decisions about the expenditures they continue to incur. For instance, prime contrac- tors should inventory their prime contracts and subcontracts to determine how the various parties will pay. Along with this, contrac- tors should determine the impact of federal government nonpay- ment. Still, construction projects may be delayed or canceled in the long run, which could lead to an overall drop in building activity. Such a decline would also have a knock-on effect on the economy as a whole. ● www.oilprice.com 6/23 Jennifer Kary