Steel prices in the US will continue to rise

According to the Monthly US Steel Sentiment Survey, US steel sentiment was very robust in December, with all participants expecting higher steel and raw material prices in the coming weeks, with most expecting increased production and reduced inventories.

In a survey of US manufacturers, distributors, traders and end consumers conducted ahead of December, the steel price index stood at 86.8, indicating broad expectations for growth (index 50 indicates stability.

The sector of producers, traders and end consumers was equally optimistic: the price development index among the three groups was 87.5, while suppliers of raw materials, brokers and distributors were slightly less optimistic at 83.33.

“Low supply, very high demand, lack of import support like in 2018,” said one trader. "Prices must continue to rise."

Participants expected an increase in steel production: the index, which includes all groups, amounted to 69.7. It is noteworthy that the most optimistic were the indicators of end consumers and manufacturers - 87.5 and 75, respectively. The index of change in production for the group of traders was 68.75, and for suppliers of raw materials, brokers and distributors - 58.3.

And again, as in the November survey, the raw materials index was the most optimistic at 88.75, while the indices of enterprises, traders and end consumers were 81.25, 94.4 and 87.5, respectively.

“The supply of metal raw materials is becoming extremely limited, which will affect prices for December,” said a second trader. "The question is in the requirements of the end consumer, and will exports continue to grow?"

Another trader said he expects the scrap market to continue in January.

The stock development index was bearish in December at 39.5, suggesting that stock levels would decline, while the end-user stock development index was the most bearish at 25. The index of factories, suppliers, brokers and distributors was at the bottom the level of 30, while the response level of traders' expectations was 46.9.