U.S. steelmakers said demand for steel will remain strong deep into next year, keeping prices high for customers such as auto and appliance makers and stoking continued investments in new mills.
The extended boom in the $180 billion U.S. steel industry that began last year following pandemic-related shutdowns of mills is giving steelmakers more time to bring new plants into service and renew customer contracts at higher prices, executives said. Steel inventories remain tight as mill outages and transportation bottlenecks have crimped shipments, keeping some steel buyers on edge about acquiring enough supply in the coming months.
“We are as bullish for the fourth quarter and going into next year as we ever have been,” said Mark Millett, chief executive of Steel Dynamics Inc., in October.
Steel companies last month reported record quarterly profits. The spot market price for hot-rolled sheet steel has been hovering at a record of just below $2,000 a ton since July, according to S&P Global Platts. Elevated consumer and business spending is driving higher demand for steel-bearing products ranging from food cans and recreational vehicles to farm equipment.
With prices at record highs and mills operating near their limits, some steel companies are rushing to open new mills. Fort Wayne, Ind.-based Steel Dynamics plans to start production at a new mill in southern Texas by the end of the year that will have an annual capacity to produce 3 million tons of sheet steel that the company intends to sell in the U.S. Southwest and northern Mexico.
Competitor Nucor Corp. soon will complete an expansion of its Gallatin, Ky., mill that will increase its capacity by nearly 88 percent to 3 million tons annually.
Nucor also is constructing a mill in Kentucky to produce steel plate, forecasting the facility to be completed late next year. The company also is searching for a site in the Midwest for another new sheet steel mill.
United States Steel Corp. outlined plans in September to build its own new sheet steel mill with 3 million tons of capacity.
Source: Wall Street Journal