Retail sales this holiday season ended up better than forecast. Gasoline prices remain low. Domestic steel mill output remains above 72%. Global prices of some raw materials for steelmaking have spiked. Steel imports remain weak but with the current price bubble, imports are expected to increase during the 2nd quarter of 2021. Despite all the sale pricing in the automotive industry, the average price of a new vehicle hit a new record of $38,077.
                      -Bill Feier, Manager of World Sourcing

+ U.S. holiday season sales beat low expectations for the pandemic year as online shopping surged, Bloomberg reported. Total retail sales grew 3% over the extended 75-day holiday period, versus a forecast of 2.4%, according to Mastercard SpendingPulse, which tracks online and in-store retail sales across all payment methods. The number is far better than the 3.5% drop recorded during 2008, the last U.S. recession. Online sales rose a whopping 49% from a year ago, according to the Mastercard report. E-commerce now accounts for one in five dollars spent, up from about 13% of overall retail spending in 2019. + Roll back to the start of this year, and it is fair to say that most people hadn’t heard of Zoom, even though the company had launched in Silicon Valley in 2012, and had grown into a very successful business. Most of us didn’t bother with video calls, either for work or in our personal life. Then the coronavirus pandemic hit in March. At the end of December 2019 Zoom had, on average, 10 million daily meeting participants. By April they had reached 300 million daily meeting participants, and it has stayed around that level ever since. Key reasons for its success are ease of use, the ‘freemium’ business model… and strong underlying technology that deals well with sub-standard internet connectivity. The firm operates a cloud computing-based system, with the main processing work being done at computer server centers around the world. Prior to the pandemic the company was focused on its long-term growth, so it already had 19 such centers that it owned. This was more than it needed for user numbers at that point. In addition, Zoom had contracts in place to allow it to use “tens of thousands of other servers in five hours [notice]”. So when user numbers skyrocketed, Zoom was able to quickly expand into this additional capacity. – As global prices end the year at about $51 per barrel, near the average for 2015-2017, it masks a year of volatility. In April, U.S. crude plunged deep into negative territory and Brent dropped below $20 per barrel, slammed by the COVID-19 pandemic and a price war between oil giants Saudi Arabia and Russia. The remainder of 2020 was spent recovering from that drop as the pandemic destroyed fuel demand around the world. While the short-lived decline of U.S. oil futures below negative-$40 a barrel is not likely to be repeated in 2021, new lockdowns and a phased rollout of vaccines to treat the virus will restrain demand next year, and perhaps beyond.

– #1 heavy melt scrap is at $316 per ton and #1 busheling scrap is at $380 per ton. + Raw steel production in the United States totaled 1,600,000 net tons for the week ended Saturday December 26, down by 1.2% from 1,619,000 tons the previous week, with mills operating at an average capacity utilization rate of 72.3%. – Iron ore FOB Chinese ports is up to $155 per dry metric ton. Westpac Banking Corp believes the stars are aligned for the steel-making mineral to rally in January to $180 per tonne, reported the Australian Financial Review. – Zinc prices might be leveling off.
– Flat rolled imports remain weak.

+ The average price for a new vehicle in the United States has now surpassed $38,000, both JD Power & Associates and LMC Automotive report. Once the sales data for December is collected, the average transaction price for new vehicles sold in the U.S. is expected reach another all-time high, rising to $38,077, a 9% increase from a year ago, the report said. “This is the first time that average prices have exceeded $38,000 — just one month after prices exceeded $37,000 for the first time in November 2020,” the reported noted. Trucks and SUVs are on pace to account for 79% of retail sales of vehicles in the U.S. this month compared with 75% a year ago, the report said. Despite the pandemic, consumer expenditures on new vehicles are likely to reach all time high of $53.3 billion, up $10.1 billion from December 2019 and $6.6 billion over the previous record of $46.7 billion in August 2019. + If you love driving your sport-utility vehicle with satellite navigation on a touchscreen while wearing aviator sun glasses, thank the military. A surprising amount of what we take for granted in our cars, trucks and SUVs originated somewhere in the world as a military RFP. In July 1940, they put out an RFP for a “light reconnaissance vehicle” that would weigh less than 1,300 pounds, have a wheelbase of less than 75 inches, measure less than 36 inches tall, employ four-wheel drive with a two-speed transfer case and could carry 600 pounds. Its body must be rectangular, have a fold-down windshield, three bucket seats, and blackout and driving lights. The proposal became the Willys-Overland MA, known today as the Jeep. That guidance your vehicle receives comes from global positioning satellites orbiting the earth, first developed by the United States Navy, which built the first satellite-based navigation system in 1959 to track its Polaris nuclear submarines. Each satellite uses multiple atomic clocks, developed by a Columbia University professor in the 1940s, to calculate the time within 100 billionths of a second. Dubbed Transit, the system measured the Doppler shift in the satellite’s radio transmission as it orbited. This required prior knowledge of its orbit. Modern satellites do the reverse, transmitting their position form earth, for faster response. New vehicle driver assistance safety features like automated cruise control use radar to add an extra edge of safety. Radar was developed as far back as 1888 by German physicist Heinrich Hertz, who discovered that radio waves could be transmitted and speed measured. But it was Christian Hülsmeyer, a German engineer, who took Hertz’s principles and attempted to sell radar to the German military in the early 1900s. They weren’t interested, but the U.S. Naval Research Laboratory in Washington, D.C. was. They began working with it in 1922. By World War II, radar was commonly used by the U.S. military to track ships and planes. + One of the key issues making hydrogen less attractive than batteries for EV use is distribution. But hydrogen blending technology offers a potential solution: injecting hydrogen directly into the existing natural gas grid could push it quickly and efficiently out across an entire city, and gas stations could simply separate it out and suck it back out of the gas pipelines to fill their tanks. The distribution problem would disappear, enabling hydrogen pumps to pop up all over town. To test the concept, SoCalGas is setting up a hydrogen blending demonstration program that will see surplus renewable energy electrolyzed into hydrogen gas, which will be blended into the natural gas supply. An isolated segment of the grid will be chosen early next year, and hydrogen will be blended in at an initial proportion of around 1%, potentially rising as high as 20% during testing. A hydrogen-natural gas blend at these proportions behaves almost identically to a regular compressed natural gas feed when it’s burned to power kitchen stoves, boilers, hot water services and other such appliances. The main difference is a reduction in CO2 emissions from gas fired appliances. If gas stations can easily hook themselves up to a reliable and fuss-free hydrogen source, then a lack of H2 pumps could quickly cease to be a barrier for fuel-cell vehicles. The same infrastructure could also feed larger trucking depots or airports where hydrogen-fueled aircraft stop to refuel.

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