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Home > MEPS Steel News - 29.09.2016

MEPS - THE NORTH AMERICAN STEEL PRICE RECOVERY IS BROUGHT TO A HALT

The recent North American steel price recovery has proved short-lived as regional values continued their downward trajectory, this month.

From MEPS research, in September, one US market participant warned steel buyers to “hang onto their hats”. He predicted that US flat product steel prices could fall as quickly as they rose in the first half of the year.

The US steel industry is heavily dependent on the automotive sector. This month, US steel buyers remarked that auto sales have slowed down. Construction activity is at a relatively low level, while the energy sector is unlikely to recover until 2018 at the earliest.

The sustainability of the recent price rises, in the US, hinged upon supply-side considerations. The introduction of import barriers on a number of flat products initially supported the domestic producers.

However, steel imports, into the US, are steadily rising, month-by-month, from countries not covered by the trade cases. The restrictions are unlikely to be strong enough to reverse the negative price tendency that exists currently.

Furthermore, US crude steel production is well below capacity. The re-introduction of ArcelorMittal’s No 3 blast furnace at Indiana Harbour and the ramp up of the Big River facility, in Arkansas, will bring additional supply into the domestic market.
 

 

 

 

Source: MEPS International Steel Review - September 2016 Issue

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