To get (inter-) national economies moving again "after" the pandemic, many governments are significantly increasing their infrastructure spending. The U.S. President's infrastructure plan calls for over $2 trillion in investments in the transportation system (highways, railways, public transit, airports, etc.), public schools (rebuilding and new constructions), and public housing - among others. The EU also adopted a reconstruction fund for its economy. It wants to invest 800 billion euros in various areas as part of "NextGenerationEU," including the "InvestEU" program, which provides for infrastructure investments worth billions. Both programs also aim to massively reduce CO2 emissions, which requires significant investment in existing infrastructure. Low global interest rates makes it easier for governments to raise capital, making it easier to fund such programs. Construction requires raw materials - and steel. Share prices of steel-producing companies have already reacted to those programs. The American Steel Index is up over 37% YTD - and the stimulus programs are just getting started. The World Steel Association estimates a growth in steel demand of +5.8% in 2021.
Callable BRC on US Steel, ThyssenKrupp, ArcelorMittal and Salzgitter (CHF)
In the context of this economic upswing, not only the demand for steel is growing, but also the demand for raw materials - such as copper.
Callable BRC on BHP Billiton, Freeport Mcmoran, Glencore, Rio Tinto and Anglo American (CHF)
U.S. manufacturers of machinery such as construction and heavy equipment, as well as agricultural equipment and vehicles, are also benefiting from U.S. infrastructure investment.
Callable BRC on Caterpillar, Deere & Co and Cummins (USD/CHF)
*indicative
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