·
EU and U.S. based producers slow down
production of steel amid high energy costs, weaker demand.
·
Amid many compounding economic pressures, demand has begun
to show signs of easing.
·
The steel sector is among multiple energy-intensive
industries that are particularly vulnerable to the ongoing energy crisis
U.S. Steel Idles Two Furnaces as Steel Prices
Slide
As
steel prices continue their slow descent, one steelmaker appears eager to cut
capacity. In early September, U.S. Steel idled its
1.5 million short ton per year blast furnace with no scheduled restart date.
The company attributed the decision to “high import levels and market
conditions.” Most likely, this was a reference to the steep price declines
among steel commodities since October 2021.
More
recently, U.S. Steel announced the indefinite idling of its 1.4 million-short-ton-per-year
Mon Valley blast furnace. The furnace was previously taken offline on September
3 for maintenance. Although the company initially planned to return it to
production after 30 days, they later announced it would remain idle. According
to a company statement, management wished to “balance our production with our
order book.”
The
steelmaker’s latest decisions suggest that the domestic markets continue to
grapple with oversupply despite the loss of competitively priced European
imports. Amid many compounding economic pressures, demand has begun to show
signs of easing. Meanwhile, ongoing ramp-ups from new and expanded mills
continue to inflate domestic capacity.
Over
the past six months, steel production has enjoyed an upward trend. Imports, however,
continue to decline from March highs.
Following $120/St Drop, Nucor to Keep Plate Prices Flat
MetalMiner Insights
U.S.
Steel is not alone in its attempts to stop the decent of steel prices. After
complaints over the record-high spread between HRC and plate prices, Nucor dropped plate prices by $120/st in late July. The
company also attempted (albeit
unsuccessfully) to raise HRC prices by $50/st. Since that announcement, plate
prices have fallen $168/st.
Following
two months of declines, the steelmaker now wishes to push the plate price trend
sideways again. In early Octobor, Nucor announced no
change to November plate prices from its last quote of $1,620/st. That said,
it’s uncertain whether the latest move will stick. It’s true that the spread
between the late-April peak and current prices continues to expand. However,
the overall declines thus far have been slow, with plate prices diverging from
the much steeper descents of HRC, CRC, and HDG. That said, U.S. plate prices
still hold a premium over their global counterparts. This means domestic market dynamics will
largely determine future price direction