Infrastructure bill’s passage bodes boost for metals demand

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After months and months of debate, the House of Representatives on Friday voted to pass an over $1 trillion infrastructure bill to repair the country’s roads and bridges, improve the rail system, and expand clean water access, among other investments.

The vote proved bipartisan, with a number of Republicans voting in favor of the bill. Ultimately, the bill passed the chamber by a vote of 228-206.

infrastructure

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The spending package includes funding for a variety of critical infrastructure, from roads and bridges to broadband and electric grid improvements.

“Generations from now, people will look back and know this is when America won the economic competition for the 21st Century,” President Joe Biden said.

So, what’s in the bill, exactly?

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Funding for roads, bridges

Although the country’s roads and bridges did not get as much traffic as usual on the heels of the coronavirus pandemic in 2020 — with many workers trading their commute to the office for remote work — motorists these days are seeing traffic levels return to pre-pandemic levels.

On that front, the bill includes $110 billion in funding for roads and bridges. Furthermore, the White House said the funding will go in part toward rebuilding the country’s “most economically significant” bridges, plus thousands of smaller bridges.

According to a report earlier this year by the American Road and Transportation Builders Association, more than 220,000 U.S. roads and bridges are in need of repair or replacement.

“ARTBA finds that while the number of structurally deficient (SD) bridges declined 2.5 percent last year to 45,000, the number of bridges falling into fair condition grew more than 3,600 to almost 295,000,” the association said.

“At the current pace, it would take 40 years to repair the current backlog of SD bridges.”

Further driving the point home, the American Society of Civil Engineers in March gave U.S. infrastructure a C- grade.

Boost for steel

The American Iron and Steel Institute weighed in on the bill’s passage, estimating the benefits for steel.

“American steel built this country, and the industry is now ready to get to work on rebuilding this country,” AISI President and CEO Kevin Dempsey said. “Repairing and modernizing our national transportation system is essential and we are glad Congress agrees. This bill would ensure that our infrastructure system meets the need of the 21st century. Funding roads and bridges, ports and waterways, water infrastructure, the electric grid and investing in electric vehicle systems, all will require a lot of steel —and our industry is ready to provide that steel.”

The bill could boost demand for U.S. steel by 5 million tons per $100 billion in investment, Dempsey added.

Railroads, power grid, broadband

Elsewhere, the bill includes $66 billion for railroads. The White House said it will “eliminate the Amtrak maintenance backlog, modernize the Northeast Corridor, and bring world-class rail service to areas outside the northeast and mid-Atlantic.”

The funding amounts to the largest rail investment since Amtrak’s founding in 1971.

The bill also features $65 billion in power grid improvements, including stronger anti-hacking defenses and resilience after extreme weather events.

“[The infrastructure bill] will upgrade our power infrastructure, by building thousands of miles of new, resilient transmission lines to facilitate the expansion of renewables and clean energy, while lowering costs,” the White House said. “And it will fund new programs to support the development, demonstration, and deployment of cutting-edge clean energy technologies to accelerate our transition to a zero-emission economy.”

Furthermore, the plan includes $55 billion for water-related infrastructure improvements, including $10 billion for replacement of lead pipes (meaning a boost for copper demand, as it is the metal of choice for lead pipe replacements). The investment aims to expand access to clean drinking water for households, businesses, schools and child care centers.

Investment in EV chargers

Meanwhile, automakers like General Motors have announced their own efforts toward expansion of electric vehicle charging infrastructure.

However, the infrastructure bill represents a federal foray in the space.

The deal includes $7.5 billion in funding to build a national network of charging stations. The White House noted U.S. sales of plug-in EV are only one-third the size of China’s EV sales market.

“This investment will support the President’s goal of building a nationwide network of 500,000 EV chargers to accelerate the adoption of EVs, reduce emissions, improve air quality, and create good-paying jobs across the country,” the White House added.

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