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    Analysis

    November 24, 2024

    Final Thoughts

    Written by Ethan Bernard

    “We’ll always have Paris,” as the famous line in “Casablanca” goes. And this month, the global steel industry did as well. The Organization for Economic Co-operation and Development (OECD) Steel Committee met in the City of Lights earlier this month. There was also a meeting of the Global Forum on Steel Excess Capacity. (In reality, it was sort of a continuation of the Steel Committee meeting.) This occurred shortly after the results of the US presidential election were made known. Kevin Dempsey, president and CEO of the American Iron and Steel Institute (AISI), was on hand to participate. He gave SMU his take on what took place and his impression of the general atmosphere there following the election.

    Chinese excess capacity

    Front and center at the meeting was the issue of excess steel capacity in China. (It’s important to note China is no longer part of the Global Forum.)

    Dempsey said that steel demand in China has been dropping because of the property/construction crisis there, but they’ve kept production steady.

    “Now that demand is collapsing, they’re just exporting all their excess production, which is the current problem with excess capacity. So there’s a lot of focus on that,” he said.

    While there have been big increases in Chinese steel exports to many parts of the world, that hasn’t happened in the US, Dempsey noted. That’s because we have tariffs like Section 232 and 301, as well as anti-dumping and countervailing duty tariffs.

    “We have not faced the same surge in imports from China, but we are very concerned,” Dempsey said.

    A convergence

    The interesting thing in Paris “was how many people around the room, including the people from Europe, were very concerned about the amount of transshipment of that steel that then could end up in Europe, in the United States, elsewhere.”

    A trio of issues stood at the forefront of discussion, including transshipment, circumvention, and evasion, Dempsey said, “which are each three slightly different things, but they’re all related.”

    At a panel for the Global Forum, Dempsey spoke about practical solutions. He talked about how the US is collecting “melt-and-pour” data, and how Canada and Mexico are also collecting that data.

    “That is a useful way to gather data that the rest of the world isn’t doing, and we had a lot of interest from Europe and others on that,” he added.

    A change Dempsey noticed was that other regions are starting to raise their voices on the China situation as well.

    “The fascinating thing is that you now have the South Korean industry and the Japanese industry complaining about imports from China,” he said. “So countries that have traditionally been more focused on just exporting to other regions now are really seeing the impact of the imports coming into their markets as well.”

    As to whether the new convergence on this issue will yield actionable results soon, Dempsey was more skeptical.

    “There’s still a lot of work to be done to get people rowing in the same direction,” he said. “I think there’s a recognition of the problem. There’s less of a common agreement on exactly how to address it.”

    Election results fever?

    The meeting was held Nov. 12-13. So that’s shortly after it was announced that Donald Trump would be starting a second term come Inauguration Day on Jan. 20. Was there a buzz?

    “There were a lot of people on the sidelines who were very interested,” Dempsey said.

    Questions included: “What’s the latest from Washington? What is the new administration going to do? Definitely a recognition that it’s not business as usual.”

    He pointed out, though, that it was still before the cabinet nominations, etc., had really begun to roll in. “Murmurs just started. It had just started building,” he noted.

    Despite being in the early days, Dempsey said, “I think there’s a lot of a lot of attention being placed on the expectation that there will be a big change in approach by the US government.”

    He commented that on the steel policy front, there has been a lot of continuity in the Biden administration following the first Trump administration: “Biden continued a lot of the things that Trump did.”

    But as far as Trump’s second term is concerned, “I think most people expect President Trump is going to ramp things up to another level.”

    Ethan Bernard

    Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.

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    Steel market chatter this week

    Steel market chatter this week Earlier this week, SMU polled steel buyers on an array of topics, ranging from market prices, demand, and inventories to tariffs, imports, and evolving market events. We are sharing a selection of the comments we received below, in each buyer’s own words. Before diving in, we reviewed all of the responses collected and compiled these key takeaways: • Most buyers continue to expect higher prices in the near future and report that demand is stable to improving. • Inventories are moving faster than they were this time last year for most respondents, attributed to limited availability and leaner supply chains. • Imports are attractive for many buyers on both price and availability, though quotas, long lead times, and quality concerns continue to limit their appeal. • Buyers were split on whether tariff policies are helping their businesses, while a slight majority reported some evidence of manufacturing reshoring, though many said it is still too early to tell. Want to share your thoughts? Contact david@steelmarketupdate.com to be included in our market questionnaires. How do you expect prices to trend over the next three months? “I expect prices to rise at a fairly rapid pace for at least the next two to three months because inventories will continue to decrease.” “Upward, capacity remains tight.” “Climbing for several months.” “Trending toward $1,300/st HRC, only because one small player is driving prices up with no one else selling spot.” “Higher, the Q1 bump is not showing in the futures market.” “We expect things to keep going up from here. Next year could get ugly, but we're not there yet.” “Still trending up. There are some soft spots getting softer, but still steady demand and a shortage of supply.” “Continue to rise slowly.” “Slow increases like they have been doing.” “Upward due to continued demand and mill maintenance outages.” “Will remain high but steady due to demand and tariff implications.” “Plate prices most likely will be flat to up over the next three months.” Is demand improving, declining or stable? “Demand is stable (if anything, overstated), with inventories so lean, late mill deliveries, and contract prices increasing next year.” “Demand is fairly consistent with the rest of the year.” “Stable, but very strong for our products.” “Stable as many projects are trying to get ahead of potential additional price increases.” “Stable due to the ‘slow season’ in our market.” “Plate demand is stable to improving.” “Demand is good to improving. We'll take it!” “Improving, but still not to 100% capacity.” Is inventory moving faster or slower than this time last year? “Faster... once it arrives (late), it goes right back out.” “Faster due to lack of availability and bullwhip buying.” “Inventory is moving faster this year than last because demand is stronger than last year and many of our competitors don't have as much steel to offer.” “Inventory is moving faster with supply chains so lean.” “Inventory is moving at a good clip. Just based on costs/spends, we're stocking less sheet, coil and plate though.” “Plate inventory is moving at a much faster pace year over year due to several factors.” “Faster due to a shortage of supply plus added demand.” “About the same.” Are President Trump's tariff policies helping your business? Buyers were split this week, with 44% believing the tariffs are helping their business and 44% saying they are not. The remaining 11% were unsure how the policies will impact them. Comments included: “Yes for now. Prices are very high, which causes people to buy before prices get higher.” “Yes, I credit Trump's policies and data centers for improving demand.” “Yes, inventory values continue to go up.” “They are helping on the sell side and hurting on the buy side.” “No, they are creating shortages and increasing the cost of steel.” Are you seeing evidence of manufacturing reshoring to the US because of Trump's tariffs? The slight majority of respondents (39%) reported they have seen some evidence of reshoring, a higher rate compared to recent surveys. A third said it is too early to say, and 28% answered they are not seeing any signs of reshoring. Comments included: “Yes. Perhaps reshoring has added to the increased demand in 2026.” “Yes, with machining and turning.” “Yes, capacity versus demand in North America is creating pressure to reshore products.” “Too early to say. There have been a lot of announcements, but steel availability has limited immediate moves.” Are imports more attractive than domestic material? “Imports are more attractive on a pricing front and an availability standpoint, but lead times are extended.” “Imports are attractive in both price and because they offer additional availability. Whether or not they show up and or as offered is another issue.” “Imports are certainly attractive. They're coming in in earnest, so this run will peter out early next year.” “Attractive due to price and availability.” “Attractive, domestic tons are unavailable.” “Yes on light gauge painted.” “Without quotas, yes, the price is more attractive. But if you get caught with the quota, pricing is very high.” “Not to us, but we are hearing more about affordable imports.” “Plate imports are only slightly more attractive than domestically produced plate.” “Not yet, shipping lag is still too large.” “No due to tariffs.” What's something that's going on in the market that nobody is talking about? “What is the latest on SDI/BlueScope? I had heard it was back on the ‘front burner’ but all is quiet now. Maybe that means a deal is getting close?” “Will the US bring a trade case against South Korea over imports spiking?” “Busheling scrap prices are flat, while hot roll continues to rise. The scrap gap is increasing.” “How will the next administration handle tariffs that have so limited our steel supply?” “Mill discipline in production capacity.” “Coke pricing levels due to demand and supply.” “Shipbuilding.”