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Piling Steel Stockpiles Raise Concerns
May 03, 2007

Mounting supplies of steel and weak demand have raised concerns over glut & declining prices in the US.

Steel supplies are mounting up in warehouses in US, resulting in concerns over excessive production & a decline in steel prices, as reported by The Wall Street Journal.

Service centers that purchase about 30% of steel supplies in US & resell them to manufactures have reported that inventories have reached a peak since January last year accounting to 15.9 million tons on-hand supply for August, down from 17.4 million tons in July but an increase from 13.8 million tons in August last year, as per Metal Service Center Institute in Chicago.

Annual Steel imports have seen a 40% increase compared to 2005. With about 30 million tons already imported till August 2006 US steel imports are all set to reach an all time high beating 41.5 million tons in 1998.

"US steel industry closely linked with domestic economic growth & global steel market situation. The economics of the steel industry has been one of the reasons for its weak performance in the past", as per RNCOS' report named "
US Steel Industry: Future Outlook."

Since auto manufacturers in US are refraining from utilizing domestic production, supplies have risen considerably and, therefore, could lead to decline of manufacturing sector in USA.

Industry analysts believe that global steel giants might limit steel production to prevent risks of over-production and instability in steel prices. A similar ploy was successfully taken by steel manufactures last year as fear of excessive production developed and, therefore, didn't allow steel prices to crash. However, prices saw a continuous decline for ten months.

Related Market Research Reports:
UAE Steel Industry Analysis
China Steel Industry Forecast till 2012
US Steel Industry Outlook (2007)