Waiting for the infrastructure boost

After much political wrangling, Congress passed the $1.2 trillion Infrastructure Investment and Jobs Act in early November of last year, and President Joe Biden signed it into law Nov. 15. Among the many investments to be made under the law, $110 billion will be allocated to roads and bridges, $65 billion will go toward modernizing the electric grid and $55 billion has been allocated to new water infrastructure. In addition to an anticipated modest increase in U.S. gross domestic product, the law is expected to increase demand for metals to the benefit of producers of steel, aluminum and copper, and the scrap processing companies that supply them.

According to the American Iron and Steel Institute, Washington, U.S. steel production could increase by as much as 5 million tons for every $100 billion of new infrastructure investment.

Aluminum consumption, which already is increasing because of the industrial trends favoring lightweighting and electrification, also will be boosted by the infrastructure investments.

Mike Stier, vice president of finance and strategy for the North American extrusion business of Oslo, Norway-based Norsk Hydro, told Recycling Today in November that the passage of the legislation “is exciting because aluminum hits a lot of different segments of the bill itself. Bridges, rail, electrification, the grid updates, you name it, there are opportunities for aluminum throughout there.”

“In addition to an anticipated modest increase in U.S. gross domestic product, the law is expected to increase demand for metals.”

Copper is used heavily in energy generation, transmission infrastructure and energy storage. It also is the next most-used metal after aluminum and steel in the construction, telecommunications, transportation and automobile manufacturing sectors.

New domestic capacity investments have been announced across all these metals, and scrap will be used to feed much of this new capacity as the focus on carbon reduction intensifies. U.S. Steel, Nucor and Commercial Metals Co. are among the companies that have announced investments in steel production.

In the aluminum sector, Matalco, Hydro and Novelis have announced capacity expansions. (For more on investments in the aluminum sector, turn to “Follow the money,” starting on page 62 of this issue.)

In the copper sector, a number of scrap-fed projects have been announced, including Ames Copper Group and Aurubis. (For more details on the outlook for red metals, turn to “A ‘green’ patina,” starting on page 34 of the print edition.)

U.S. scrap processors are poised to benefit from this increased capacity and the demolition and construction activity arising from the infrastructure bill. Given the growing challenges with exporting that involve logistics issues, particularly for container shipments, and regulations targeting scrap, these domestic developments are good news indicating an increase in local scrap demand.