Market Segment
Tampa Steel Conference: Tanners on rising capacities and storms brewing across steel
Written by Stephanie Ritenbaugh
February 6, 2025
More protectionism for the US steel industry could mean domestic manufacturers ramping up production and foreign companies setting up shop here as well.
Timna Tanners, managing director at Wolfe Research, spoke at SMU’s Tampa Steel Conference this week on the repercussions of a more insulated market.
“You don’t have to look that far. Just look at the headlines on Hyundai Steel,” Tanners said, noting that Hyundai Motor Group is reportedly considering building a sheet steel mill near Baton Rouge, La.
“Why wouldn’t you? If you can’t beat them, join them. Stop fighting over tariffs and just build in Louisiana,” Tanners said. “Louisiana wants you. They want to have those high-pay jobs.”
Storms on the horizon
Tanners said the ongoing ‘sheet storm’ will last until the end of the decade for a few reasons. One is that inventories are high, and demand is struggling against elevated rates. Another is that mills are running at about 74% utilization, meaning there’s a lot of production waiting to come back to the market while more capacity is also being added.
Additional volumes are coming from U.S. Steel’s Big River 2 expansion, Steel Dynamics Inc.’s Sinton ramp-up, and EAF projects at Algoma Steel and AM/NS Calvert.
Rebar is growing as well.
“We have one and a half million tons of rebar added by the end of the year. I don’t see any reason that there’s a surge of extra demand coming for rebar. So you have to have imports reduced,” Tanners said. “Why are you adding capacity that you can’t find a market for?”
Meanwhile, more galvanized steel capacity will be coming online as well.
“One of the reasons I think our numbers are lower than others in the market is because we assume galv margins are going to be lower for longer,” Tanners said. “Because you can’t add that much galv supply. There’s not that much of galv demand, considering how much is coming to market. I think a couple years ago, when galv margins blew out, everyone and their mother, to be cliche, decided to add a new galv line, and it’s all coming in at once.”
On the raw materials side, there’s expected to be about 10 million tons of extra scrap/scrap substitute demand by the end of the year.
“That’s a lot of scrap,” Tanners noted. “The US is already only a 70-million-ton market, so you’re talking 15% more.”
Stephanie Ritenbaugh
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