Tide for U.S. Steel Turns as Near-Term Outlook Goes Positive

The outlook for the U.S. steel industry for the next year and a half just flipped from negative to stable, and Moody’s Investors Service attributes rising prices, improved capacity utilization and falling imports as the main factors leading the charge.

Since reaching their nadir in October at roughly $470 per ton, hot-rolled coil prices have risen four times to $600 per ton. "We anticipate 2017 will continue to build on this year's advances and our price sensitivities range from $550/ton to $600/ton," said Moody's Senior Vice President Carol Cowan.

Along with rising prices, capacity utilization has also been on a steady march to improvement, reaching 68.9% for the week ending Dec. 3 and just below the 75% stable outlook trigger Moody’s has set. Still, the ratings agency expects capacity utilization to climb to a range between 70% and 74% in 2017.

And there’s been more good news for the sector: U.S. steelmakers have benefited from fewer steel imports as several anti-dumping trade cases concluded in the favor of the U.S. sector, Moody’s said. Year-over-year in October, steel imports dropped 19% to 27.5 million tons, while finished steel imports fell 19.8% to 22 million tons.

– Nicholas Stern, editorial associate

No comments:

Post a Comment