The steel industry in the US is anticipated to rebound in terms of growth in 2017, with production volumes projected to grow on lower imports and higher demand from the energy and construction industry.
The production of crude steel in the US is expected to grow healthily in 2017 and will replenish the cavities formed in the last two years. Walking on similar paths to that of foreign counterparts, major US steel manufacturers include AK Steel, US Steel and Nucor felt the shockwaves after the collapse in prices of steel in 2016. The price drop was primarily caused by oversupply of the grey metal worldwide, cheap imports from other countries and declining raw material prices. However, steel prices have recovered since then, meanwhile, stringent regulation to limit the inflows of unaccounted traded material is expected to influence the growth of the industry.
The industry that saw a sever number of job layoffs over the past couple of decades is expected to bring some optimism to investors in the near future. As Trump takes charge of the White House, several steel companies based in US have relished the president-elect’s idea to channelize the industries growth by planning more infrastructural activities.
Another major factor the influence of China in the overall market, which is the largest producer of steel accounting for a mammoth share of the market in terms of production last year.
The Chinese steel manufacturers have been heavily criticized for offloading the excess product on to international markets at miniscule prices as domestic steel sales drop momentum. Beijing has assured to shutdown unneeded plants. Industry experts are of the view that over the next couple of month production volumes in China will shrink, while in Europe the production is expected to rise. Experts believe that the sector will improve its financial performance after several downturns triggered by the steel price crash.
Some of the major steelmakers in the world such as ArcelorMittal S.A. witnessed a decent growth in terms of capital growth, which will help counter its debt pile after declaring a record loss last year.
Summary: The US steel industry is expected to reinstate itself in 2017