At a time when it would seem that American steelworkers could breathe a sigh of relief, the industry faces new challenges.
Earlier this summer, American steelmakers announced price increases. But steel buyers are reluctant to accept the increase, according to industry executives, distributors and analysts gathered at one of the largest industry conferences of the year this week, dampening manufacturers' optimism after the government imposed new tariffs to support the industry.
According to experts and analysts, the US market in the short term is "problematic" due to weak demand.
“Too little time has passed since the price increase,” said Todd Libow, president of Majestic Steel in the US, in an interview at a conference in Atlanta.
The industry has seen a huge spike in prices since the President of the United States imposed a 25 percent tariff on steel imports in March 2018, which resulted in the highest profits for American steel companies last year since the 2008 financial crisis. Optimism prompted companies to expand capacity by investing in new factories or upgrading legacy assets.
Then, fears of overproduction, fluctuations in economic growth and increased contradictions in world trade significantly reduced this optimism and forced a number of companies to cut production. Domestic hot rolled steel prices, the benchmark for the United States, are now at their lowest level since 2016, and the S&P supercomposite steel index is heading for its fifth month out of six.
Some analysts believe that demand will not decrease in the short term, but will be minimal. For example, Mark Millett, CEO of American carbon steel maker Steel Dynamics, expects growth to be around 1-2%.
