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American steel executives say they’re optimistic that demand for the industrial material will rebound next year, recovering from the lacklustre demand and low prices that have hobbled the industry in 2024.
Many industry leaders who gathered at the SMU Steel Summit in Atlanta earlier this week said they have high hopes in 2025. They see a turnaround fuelled by an improving US economy, as large infrastructure projects get built and interest-rate cuts encourage consumer spending.
“If it’s a good economy, if people are out buying washing machines, they’re buying cars, they’re buying houses and building commercial buildings,” said Mike Barnett, president of Grand Steel Products, a steel service centre based in Wixom, Michigan. “That’s really good for us.”
The US steel industry has been dominated this year by Nippon Steel Corp’s proposed takeover of United States Steel Corp, the country’s largest producer. The US$14.1 billion deal, which has become a hot political issue following opposition from President Joe Biden and union workers, is driven by the Japanese company’s optimism of more growth within the US.
Yet despite the potential for more spending on major energy projects due to government incentives, higher borrowing costs have been a drag on manufacturing and economic growth. Steel demand in the first half of this year was 50.9 million tonnes, about 0.4 percent less than the same period a year ago, according to data from the American Iron and Steel Institute.
Benchmark US steel futures are down 37 percent since the start of the year and earlier in the summer hit the lowest levels since December 2022. — Bloomberg
Bongani Ndlovu
Online Reporter