US steel prices will continue to rise to new record highs, UK analysts at MEPS predict. The slowdown in growth observed today could be simply due to a summer lull in activity, or it could be a sign that prices are approaching their peak. Nonetheless, most players in the supply chain expect the domestic base price of hot rolled steel to continue to rise in the short term.
Strong demand, especially from the automotive and manufacturing industries, is helping to hold the market. Production at American auto plants is expected to increase in the coming months as the shortage of semiconductors shrinks. The new Infrastructure Act and Buy American Goods policy should also boost steel consumption over the medium term.
The capacity utilization of the current US steel mills is high and close to full capacity. Most local steelmakers have significant order delays.
Insufficient availability of steel from American producers in recent months has prompted buyers to seek alternative sources of supply. Total imports have grown steadily since the beginning of this year.
Despite high freight costs and import tariffs, prices for foreign materials remained attractive due to a sharp rise in domestic base costs. This was especially true for coils and sheets from suppliers from third countries. Significant growth was recorded in the first seven months of 2021 and is likely to continue to grow in the near future.
As domestic prices in the United States reach dizzying heights, talk about the abolition of protective duties under Section 232 of the Trade Expansion Act is gaining momentum. However, this is unlikely to happen before the end of this year. Consequently, the US steel market is expected to remain tight in the coming months. As a result of continued price increases, the base cost of hot rolled coil is projected to reach or even exceed US $ 2,000 per short tonne.
