🎧 New STUFF MATTERS episode just dropped👇 This time: arguably the single biggest issue facing humanity. Are we about to run out of bananas...? Wherever you get your podcasts 🍌

📖A few years ago I wrote a book about the materials that make the world go round. It was pretty relevant then. I think it's still pretty relevant (maybe even more relevant) today. Anyway it's on offer TODAY ONLY👇 Have a read & let me know what you think shorturl.at/ONyBZ

That brings me to the second key underlying story, which is that there are all sorts of hard-to-quantify forces which could push inflation higher. Take the war between Israel & Iran. That's already lifted oil prices recently (albeit they're still lower than earlier in the year)

Look at the FOUR year CPI rate and it's higher in recent months than it has been since the early 90s👇 That folks STILL feel there's a cost of living problem isn't because they haven't read the latest inflation data. It's because they read inflation differently to economists

But when you go to the supermarket are you only thinking about prices over the past year? Of course not. You're thinking over recent years. Say, the past FOUR years. And over the past 4 yrs, the level of prices is up 25%. This is another legitimate measure of cost of living! 👇

But, as I say, what that number is is simply looking at the difference in the LEVEL of prices over the past year. This chart is that level. (The actual consumer price index!). And yes, look over the year to May and it's up 3.4%.

The key thing to remember here is that when economists talk about inflation what they're really talking about is the ANNUAL RATE at which a basket of goods and services changes price. And certainly, that rate is much lower than the 2022 peaks...

👀Sneak preview from a short film @aoifey.bsky.social and I have been working on for a while... Just putting the finishing touches to it. Coming to a screen near you tomorrow. Bonus points for anyone who can guess what they make/do at this plant👇

Here's a 👀 datapoint. In January a whopping 67% of ALL UK exports to America were gold bars. Ponder that for a moment. 67% of EVERY PHYSICAL THING the UK exported to the US (by value) Totally unprecedented. Further evidence of the scale of gold outflows from Britain to America

Interesting piece coming your way tomorrow on @news.sky.com Sneak preview👇 Stay tuned.

British Steel say the main question now is timing: whether the operations will close in June, in September or later. It says tariffs are one of the reasons the blast furnaces are "no longer financially sustainable". Press release 👇

This is, as far as we can tell, the first UK business to have had to pay these tariffs. It won't be the last. And there will be consequences. A large chunk of its business is no longer economical. Liam is still trying to work out the impact. But Liam says there could well be job losses

Why? Because while the steel was smelted in Sheffield, it was being sent to the company's American plant to be processed. It was an "intermediate product". That it was crossing the Atlantic was almost irrelevant - it was just passing from one unit of a company to another...

They managed to get most of it across the Atlantic. But there was a shipment - actually two ships - due to dock on 10 or 11 March. If it got there in time, no tariffs. If it was late: about $4m (£3m) in tariffs. A massive bill. Hence why Liam was frantically tracking those ships

So why does this place matter NOW in particular? Well you may recall this chart I posted a while back 👇 Of all the categories of steel Britain sends to America, stainless steel is by far the biggest. And nearly every tonne of that steel comes from here

A lot of people assume we don't make stuff in this country. That's nonsense. Certainly, we've deindustrialised enormously (if you follow me you may have heard me rant about this). But there are still key bits of manufacturing we do here - for the time being. This is one of them.

Watching the process is TOTALLY amazing. They tip a massive amount of scrap: old car parts, sinks etc, into a kind of cauldron and then lower big glowing electrodes into it. Then flip the switch. ⚡️Cue a massive thunder sound as a controlled lightning storm erupts inside it.

That man is Liam Bates. He runs the UK unit of a steel company called Marcegaglia. They make stainless steel - one of the most important varieties of this important alloy. The method of making it was invented in Sheffield. And this company traces its DNA back to that invention.

Been a bit quiet in recent weeks because we've been cooking up something special for you. Full thing out tomorrow. In the meantime, here's a clue:

📉We like to think this is the golden age of data visualisation. But check out this chart from the US military during WWII👇 German production of synthetic oil, plant by plant, and how it collapsed when Allies bombed the plants. Much more on this in Ch 14 of Material World...

FDR also pondered taking possession of rare books and artworks from the British Library in exchange for supporting the UK in the war. Here's the memo he wrote about it👇 Helpful context next time you hear someone say no US president pre-Trump would ever consider a deal like this

Few sights more glorious than the fog from the air at sunrise. This was the view over the south of England earlier this morning

Update: there IS another Executive Order for aluminium which does indeed raise the tariff from 10% to 25%. This is a really big deal! Much more disruptive than for steel, potentially. H/t @samuelmarclowe.bsky.social www.forth.news/whpool/67aac...

Going through the small print of the US tariff announcement. Unless I'm missing something the extra tariff on aluminium is going to be 10%, NOT 25%, as Donald Trump said yesterday. That's quite a big difference. (It was 10% last time. 25% would have been pretty crippling.)👇

With new US tariffs on the way, here's a little background reading on steel, from chapter 7 of Material World 👇

Nor is this just a UK-specific trend. Look at Germany, where both the chemicals sector and the wider energy intensive manufacturing sector have seen large falls in output in the past few years 👇 Europe is deindustrialising, and fast.

Perhaps worth adding: it's not just chemicals. Cement manufacture (also v energy intensive, also affected by net zero rules) is down 40% over the same period. Basic metals down 35%. Electrical equipment manufacture down nearly 50%(!) This is happening across the industrial base.

🚨UPDATE The implosion of the UK chemicals sector continued in Nov, according to this morning's data. Cumulative fall in output since 2021 is now 38% 👇 It's further evidence of continued UK deindustrialisation, in the face of high energy prices

Very interesting chart on his expectations for Bank of England interest rates in the coming months under various different scenarios (NB he thinks case 1 and 2 are the most likely)

📈Lots of charts doing rounds re market jitters in the UK. Here's one I find quite helpful 👇 It's the cost of insuring UK debt against default. Two things to note: 1. People ARE more concerned. The CDS spread HAS jumped up recently. 2. It's nothing like what happened in 2022.