On a down day for the S&P 500 as a whole, metal production stocks fared better than most Wednesday, with shares of Alcoa (NYSE:AA) closing 6.9% higher, U.S. Steel (NYSE:X) rising 7.3%, and Freeport-McMoRan (NYSE:FCX) gaining 8%.
You can probably thank President Joe Biden for that.
The president, as you've probably heard, has proposed that Congress pass a $2 trillion infrastructure bill to rebuild the nation's roads and bridges, water supply systems, electric grid, and even telecommunications systems. And as The Boston Globe noted this week, getting this bill passed has become the Biden administration's singular focus. "Biden and the Senate have effectively cleared their plate for this single item from now until September, when the Senate, they hope, will try to pass it under the rules of a budget reconciliation process," the Globe reports.
Passage of the bill is not a sure thing. Although the Globe noted "polls suggest broad support for Biden's plan," support for the bill among Republicans in Congress seems tepid at best.
That being said, if the bill does pass, Recycling Today magazine predicted earlier this month that the massive projects being envisioned will "likely require hundreds of thousands of tons of steel, copper, aluminum and other basic materials."
Even those words may fail to capture the full size of this bill. The American Iron and Steel Institute predicts that for each $1 billion spent on infrastructure, American metals producers will need to put out "about 50,000 net tons of steel" -- to say nothing of the massive quantities of copper and aluminum that will be required.
Is that reason enough for shares of Alcoa, U.S. Steel, and Freeport-McMoRan to be surging today? I think it may be.