US steel buyers are getting used to higher prices and are expecting even more upside through March as supplies thin while demand picks up.
According to Platts, hot-rolled coil prices are expected to increase by $30 over the course of March compared to the $640 they were at at the end of February. Pricing for steel mills has improved due to limited imports and balancing inventories. The US steel sector, in general, experienced improvements that started last year as the country started to crack down on cheap imports.
Before 2016, the US steel sector went through some major challenges as domestic producers of steel started to lose customers as imports took over an alarming large share of US steel demand. This initiated multiple trade investigations and it was found that other countries, particularly China, were unfairly subsidizing their steel producers which enabled them to import into the US at costs domestic producers could not compete with. In 2016 duties of up to 500% were implemented on some steel imports while more trade investigations are ongoing.
As evidence of the improving US steel market, Nucor Corporation (NYSE:NUE) on Friday provided an upbeat first-quarter earnings forecast. Nucor expects first quarter results to be in the range of $1.10 to $1.15 per diluted share, compared to the fourth quarter of 2016 consolidated net earnings of $0.50 per diluted share and the first quarter of 2016 earnings of $0.27 per diluted share. The company noted that imports continue to impact the US steel industry, but current, important trade cases in cut-to-length plate and rebar are in progress and this is helping to stop the flood of dumped and subsidized products from foreign producers.
Source: Economiccalendar.com
