North American Steel Price Upturn Expected to
2017 may well be regarded as the year of continued recovery
for the global steel industry. During the past twelve months, the upward
movement of world steel prices has been a consequence of supply-side factors and
increased costs for the steelmakers.
Import protection has become a key feature of the global steel scene, notably in
North America. This has given regional producers the opportunity to lift prices
– in the likelihood that steel buyers will find it increasingly difficult to
switch to low-cost foreign alternatives.
Existing trade measures by the US authorities and the prospect of further
restrictions, upon the conclusion of the Section 232 investigation, encouraged
local steel manufacturers to announce a series of list price hikes from October
2017 onwards. Local mills have secured a large proportion of their pricing
initiatives, to date. It is likely that US producers will target further
advances, in the coming months.
From MEPS research, in January, the majority of North American steel
participants are projecting a demand improvement, across a number of
steel-consuming sectors, including energy and construction, during the course of
2018. Furthermore, it is widely perceived that the implementation of the US
infrastructure bill could be a ‘game changer’ for the domestic steel sector.
MEPS predicts that North American steel prices will increase, in the short term.
Selling figures are expected to reach the peak of the current cycle, during the
second quarter. However, it is likely that any significant demand pickup or the
imposition of a new round of trade barriers, following the Section 232
investigation, will aid regional producers’ ambitions to keep prices at their
elevated levels, for the remainder of the year. Conversely, in the absence of
these supportive factors, steel selling figures could fall, following the recent
dramatic price upturn.
MEPS - International
Steel Review - January 2018 Edition
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