Increasing Prices & Declining Demand Daunt US Steel Makers

Delhi, De;hi India (PressExposure) April 19, 2007 -- US steel makers are almost under a financial crunch due to the stubbornness of domestic steel prices. The prices don’t seem to come down owing to the continuous rise in the costs of raw material.

The minimills of the nation are increasing prices so they can offset the cost of scrap, primary feedstock that saw an increase of 50% from January 2007. Integrated mills, comprising those being operated along the lakeshore by U.S. Steel Corp. and Mittal Steel USA, are also raising prices for balancing their high-energy costs.

Hammond-based Berlin Metals’ owner and president, Roy Berlin said that the threat of rising steel prices prompts service-centers to demand more steel in spite of already bloated investors. In case of continuous lag in demand, inventories are likely to shoot up much beyond the optimum 3-month level and cut out the future orders of steel.

In January 2007, steel imports reached 2.4 Million Metric Tons, according to Dept. of Commerce. This was 23.5% down against last year and 10.1% against December last year. In January this year, imports of steel came in 8% less than import licenses owing to shipments’ diversion outside of US in to more lucrative markets due to weak relative pricing here. Jason Brunerm, analyst for Michelle Applebaum Research in Chicago suburb suggested this, as published on February 28, 2007.

The consensus-2007 US economic estimate is for 2.7% growth, even that’s being reduced, said Bradford in his presentation. Current lag in the demand owing to higher costs of energy, a dip in new-housing starts, and sales of auto are tempering the growth of US economic.

As per the RNCOS report “US Steel Industry - Future Outlook”, "For the past several years, performance of steel industry in United States has witnessed several ups & downs. A high-degree of correlation between domestic economy and global steel market remains the key force behind this fluctuation in the performance. Also, basic capital structure of steel made it sensitive towards market forces.”

This research report on “US Steel Industry - Future Outlook” provides extensive research and objective analysis of the Steel industry in US. This report helps clients in analyzing the opportunities critical to the growth of the Steel industry in US. Key issues addressed in this report encompass: future potential for the industry, key competitors in the US Steel industry, opportunities exist for the steel manufacturers in United States, success & sensitivity factors for the industry, major driving forces for the industry etc.

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Press Release Submitted On: April 16, 2007 at 5:24 am
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