Final Thoughts

I am hearing the U.S. Steel Gary Works #4 blast furnace will be coming back up by the end of this year. According to AIST, the #4 furnace is rated at 1,390,000 tons of pig iron annually. So, this means we will have more supply added from USS and from Big River Steel as they ramp up production from their new EAF and caster. I do not believe the combination of this new supply will tip the market for a while. We still have to build back inventories, and demand is quite good in many steel intensive areas.

I had an interesting conversation with a trader who is familiar with quotas out of Brazil. He said the quotas have not yet been set on Brazilian slabs for the first quarter. They will be set by the USTR the first week of December. The assumption is the quota will return to normal, which for slabs would mean 1,050,000 metric tons for 1Q 2021. Most, if not all, of these slabs are already in storage at U.S. ports due to the elimination of the quota for 4Q 2020 by the Trump administration. There is no guarantee the USTR will revert to the 1,050,000 metric ton quota.