CRU is forecasting that North American steel sheet prices will find a bottom sometime this summer, but will remain volatile while supply and demand gradually rebalance as the coronavirus crisis subsides.
CRU projects steel consumption will decline by 22 percent this year as a result of virus-related shutdowns in automotive and other key manufacturing industries. Adding to the weak steel demand is the low price of oil, which has put the brakes on drilling activity in North America’s energy sector and on orders of oil country tubular goods. In response, various mills have idled furnaces and curtailed operations in an attempt to quickly cut steel output.
“We have tallied 8 million metric tons of production cuts so far this year, but we are seeing demand come down by 16 million tons. So, it is going to be a pretty volatile situation going forward,” said CRU Principal Analyst Josh Spoores during a CRU webinar earlier today.
Because steel demand has fallen so quickly, service centers have been left with a glut of inventory. In January-February, service centers were holding around a 2.4-month supply of sheet products with another 1.7 months of supply on order. “If demand at service centers falls by only 40 percent, this would make the current inventory look as high as six months of supply,” said Spoores.
CRU’s current view is for North American steel sheet demand to rebound by 12 million metric tons in 2021.
Request more information about this topic.
Learn more about CRU’s services at www.crugroup.com
Tim TriplettRead more from Tim Triplett
Latest in International Steel Prices
US HRC is just $77/st more expensive than imports
The premium US hot-rolled coil (HRC) held over offshore product is disappearing in a hurry. Domestic hot band prices continue to fall at a fast clip, erasing a nearly $300/st gap they had over imported HRC just two months ago. All told, US HRC prices are now 8.8% more expensive than imports. The premium is […]
US HRC premium over offshore product dips below $150/st
US hot-rolled coil (HRC) prices moved lower again this week, remaining largely on a downtrend since mid-January. The result has caused domestic tags to lessen their price premium over imported products week on week (w/w).
US HRC premium over offshore product down, nears $150/st
US hot-rolled coil (HRC) prices were again lower this week, pushing the price premium domestic hot band carries over imported products lower vs. the prior week.
US HRC remains $200/st more expensive than imports
US hot-rolled coil (HRC) prices law little movement this week, a similar trend seen in offshore markets. Thus, the price premium domestic hot band carries over imported products was largely unchanged vs. the prior week.
US premium over offshore HRC dips below $200/st
US hot-rolled coil (HRC) prices declined further this week, easing to their lowest level since late November. And while domestic tags remain notably more expensive than offshore product, the premium has declined as imported hot band tags have moved higher.