banner
Home / Blog / Steel Prices
Blog

Steel Prices

Nov 01, 2023Nov 01, 2023

Nichole Bastin | Posted on August 22, 2022 |

The Pittsburg, CA based finished steel producer USS-Posco Industries (UPI) will close its doors in 2023. UPI manufactures hot rolled pickled and oiled, cold rolled coil, hot dipped galvanized and tin plate. Although unconfirmed, the facility was reportedly purchased by Amazon for use as a warehouse. UPI’s closure will follow a long line of closures by U.S. Steel, which include its Detroit-based Great Lakes facility and Texas-based Lone Star Steel, as the company instead opts to invest more heavily in its non-union operations. How will this effect steel prices and supply?

With an annual capacity of 1.5 million short tons, the pending closure will narrow overall U.S. capacity. That said, the domestic market continues to grapple with a supply glut. This issue has led to falling prices for HRC, CRC and HDG since late April. Beyond that, new capacity continues to come online. BlueScope, Nucor and Steel Dynamics (SDI) continue to ramp up production on expanded/restarted mills. Estimates suggest that those mills could add nearly 15,000 short tons per day of flat rolled and raw steel capacity.

At full capacity, SDI Sinton will produce 3 million short tons per year, with shipments expected to reach 1.5 million short tons by the end of 2022. The Nucor Gallatin expansion, which added 1.4 million short tons per year of capacity, will expectedly hit its full 3 million short ton per year run rate in Q4 of 2022. Meanwhile, North Star BlueScope added a 937,000 short ton per year expansion that will expectedly become fully operational over the course of the next 18 months. Those combined additions to the market will more than compensate for what is lost upon UPI’s closure.

For the industries and companies UPI serves, that will, if it has not already, require a shift in sourcing. According to the company, UPI’s primary markets include construction, service centers, containers as well as pipe, tube and conduit.

The MetalMiner Insights platform covers a wide range of steel prices and forms. Get premiums, forecasts, specific monthly buying strategies, and more! Request a 30-minute demo of the MetalMiner Insights platform now.

As stated in a recent conference call by Stelco CEO Alan Kestenbaum, while flat rolled steel prices continue downward in the North American market, “there’s no disaster in terms of demand itself.” This, alongside low mill lead times, would suggest that current capacity more than meets relatively normal demand. Should demand meaningfully decline, especially amid looming concern of a global economic slowdown, that would further exacerbate the current domestic steel supply glut. By the time UPI does close within the next two years, the market could, of course, look radically different. At present, however, its closure appears unlikely to shift price direction.

Filed under: Industry News

Your email address will not be published. Required fields are marked *

Comment *

Name *

Email *

Website

Save my name, email, and website in this browser for the next time I comment.