Analysts from Bank of America and KeyBanc Capital Markets see big changes approaching in the United States' steel market, with new capacity scheduled to come online later this year and into 2022, they told attendees of this week's Steel Success Strategies conference.
In the atypical cyclical upturn caused in large part by the Covid-19 pandemic, Bank of America analyst Timna Tanners stands by her prediction of an approaching "Steelmageddon" and Phil Gibbs of KeyBanc also anticipates a price correction on the distant horizon."When all this steel on the order books finally shows up, you're going to have an excess of steel," Tanners said. "And then if you layer in the steel capacity coming online and perhaps 232 tariffs getting watered down, we could be looking at quite a different market six months from now."By quite different, Tanners means current hot-rolled coil pricing of nearly $1,700 per short ton will go away and will likely not be seen again for quite a while.Gibbs isn't calling it "Steelmageddon," but he agreed that overall steel market dynamics are leaning towards a sizeable correction."Consumers are looking for ways to get steel on the ground right now,"...