SEATTLE (Scrap Monster): Stelco Holdings Inc. expects the North American steel market to face some rough months ahead. The market will be badly impacted by excess supplies, rising inventories and waning demand.
Alen Kestenbaum, Chief Executive Officer, Stelco stated that the leading U.S. steelmakers are expected to post record earnings in 2021, mainly aided by substantial surge in domestic steel prices during the year. However, the rapid spread of Omicron variant of the Covid-19 virus has badly hit the company’s steel shipments over the past two weeks.
The construction and automotive industries, which are considered as the key steel consuming sectors, are reportedly witnessing rising inventories. At the same time, customer demand has started to dry up. This has delivered negative sentiment. Furthermore, Kestenbaum noted that the difficult market conditions are likely to persist and that there has been no sign of a turnaround until now.
Since August 2021, the steel shipments in the U.S and Canada have registered significant decline by 17%. Over the same period, steel inventories have surged higher by almost 15%, according to most recent data published by the Metals Services Center Institute. Meantime, steel prices have dropped by over 26% since August last year.