Steel Products
CRU Consultant to Debate the Impact of New Steel Capacity
Written by Tim Triplett
May 29, 2019
U.S. steelmakers have announced plans to reinvest their recent windfall profits in various mill upgrades and expansions, which in total could add 20 million tons of capacity to the market. How will all that new steelmaking capacity impact steel supplies and prices in the next five years? The experts disagree.
Some believe it’s inevitable that the additional capacity will oversupply the market and drive prices sharply downward. Others are less concerned about overcapacity and more concerned that these mill modernizations are long overdue if the U.S. steel industry is to remain globally competitive.
Lynn Lupori, Head of Consulting-North America for CRU, believes the truth lies somewhere in between. Lupori will be a panelist at the Steel Market Update Steel Summit, scheduled for Aug. 26-28 in Atlanta.
“The idea that all this capacity will totally rock the market is not necessarily accurate,” said Lupori. “You have to take a much closer look at what’s coming online.”
Just because new mills have been proposed does not mean they will all be completed. Some projects are more likely to move forward than others, she noted. Much depends on where the capacity is slated to go—what products would be made to service what downstream markets in which regions. “You have to take an in-depth look at each project and its implications for the market. There are very viable projects on the list and there are others that don’t seem to have the same legs.”
Joining Lupori to debate the Impact of New Steel Capacity will be Timna Tanners of Bank of America Merrill Lynch Research (who predicts a pricing Steelmageddon!) and Paul Lowrey of Steel Research Associates (who credits the mills for investing in the future).
Click here for more information and to register for the summit.
Tim Triplett
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