SMU Market Trends: Is Demand Moderating?

“Compared to one month ago, demand is declining, but to a more normal level,” commented one respondent to Steel Market Update’s market trends questionnaire last week, expressing a common view. There has been a surge in demand in recent weeks due to the Section 232 tariff decision by President Trump. Many buyers have been buying for future needs, which will ultimately come back to bite into future demand.

Demand for flat rolled steel products remained surprisingly stable in the first quarter (see chart), despite the rapidly rising prices and uncertainty on the trade front. Since January, on average, 39 percent of steel executives have reported improving demand, while another 54 percent reported stable demand for their products. Only 7 percent saw demand declining.