How will the supply of steel in the United States develop in Q1 2021? Rye Druzin tackles this important topic on argusmedia.
US steel market to remain undersupplied in early 2021
The U.S. steel market is expected to remain undersupplied through the first quarter of 2021, as a shortage of imports and steel production continues to weigh on the market.
Steel producers unable to meet demand
Despite multiple restarts of idled capacity that was shut down due to the Covid 19 pandemic, steel producers will be unable to meet demand through at least the first quarter, according to many market participants.
Steel buyers unable to meet demand for months
Steel buyers have been unable to find the tons they need for their customers for months, and steel inventories are said to be at some of the lowest levels ever.
Steel shortage worsens as demand recovers
The steel shortage has only been exacerbated by a recovery in demand. The Metals Service Center Institute (MSCI) reports that steel shipments fell just 1.3% in November compared to the same month in 2019. In May, shipments fell 34.2% year over year, the largest percentage drop since the coronavirus pandemic crippled much of the North American economy starting in mid-March.
Inventories were massively depleted
Inventories were drawn down between late March and August as steel demand slumped as North American economies adjusted to the reality of the coronavirus pandemic. Approximately 19 million tons of pig iron and steel were shut down, most of it at integrated steelmakers ArcelorMittal USA, Cleveland-Cliffs and US Steel.
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