US Steel Prices Stall Following
The recent revival in US flat product prices appears to have
come to a halt, this month. The consensus view, from MEPS’ September research,
is that US selling values have plateaued – with figures expected to be under
negative pressure for the remainder of 2019.
Ahead of the seasonally slower fourth quarter, US steel manufacturers are likely
to be intent on minimising the extent of the price erosion – with few market
signals giving them cause for optimism. A combination of weak demand and
relatively high domestic production is a threat to the sustainability of current
Activity levels, in the US, are likely to soften, in the coming months. A
slowdown in major end-user markets, such as automotive, construction and energy,
is widely anticipated. Domestic capability utilisation remains around the 80
percent mark. Several US steelmakers have already outlined their plans to reduce
output, next month, by taking extended periods of maintenance. The impact on the
market is projected to be negligible, given that domestic supply is still likely
to exceed demand.
Imported volumes remain an influence on the US steel market, despite the
implementation of Section 232 measures. Recent exemptions for neighbouring
Canada and Mexico, as well as quota agreements on steel imports from Argentina,
Australia, Brazil and South Korea, have reduced the impact of the current trade
A number of political and economic uncertainties, in the regional and global
steel markets, persist. The ongoing trade tensions between the US and China will
do little to boost buyer confidence, in the short term.
However, MEPS predicts that US steel prices have the potential to rise, once
again, at the beginning of next year. A seasonal upturn in steel purchasing and
an expected recovery in scrap costs are likely to exert upward pressure on US
selling figures, in early 2020.
MEPS - International
Steel Review - September 2019
Free Sample copies
of MEPS Reports
up for free MEPS steel news alerts