Industry to Soon be Over-Supplied and Prices Forecast to Drop

This past week, Steel Market Update (SMU) conducted our beginning of September steel market survey. Of those responding to last week’s survey 52 percent were manufacturing companies, 35 percent steel service centers and the balance were composed of steel mills (4 percent), trading companies (4 percent), toll processors (3 percent) and suppliers to the industry (2 percent).

By wide margins, our respondents believe that the flat rolled steel market will be in over-supply due to the return of the Middletown blast furnace, the resolution of the ThyssenKrupp slab issues and the union returning to work at Lake Erie Works. When our question was put to manufacturing companies and services centers independently the results were the same.  Close to 90 percent of service centers and over 90 percent of manufacturing companies believe there will soon be an over-supply of steel.