U.S. steelmakers may raise output by one-third this year as the economy begins to recover, Nucor Corp. Chief Executive Officer Dan DiMicco said today.
Steelmakers still face increasing competition from rising imports and require protection from trade practices of nations including China, DiMicco said on an American Iron and Steel Institute-sponsored conference call. Charlotte, North Carolina- based Nucor was the largest U.S. steelmaker by 2009 sales.
DiMicco yesterday became chairman of the American Iron and Steel Institute, which represents 24 member companies and 138 associate and affiliate members comprising 75 percent of steelmaking capacity in North America. The nation’s steel capacity utilization rose to 73 percent as of April 24 from 41 percent a year earlier, according to the group’s data.
“Things are getting better but we need them to get a lot better,” DiMicco said on the call. “We are looking at positive signs that the economy is slowly starting to recover. It will probably take several more years to see demand back to what it was from 2004 through the third quarter of 2008.”
The U.S. now imports 20 percent of its finished steel the increasing volume is a “disturbing” trend, DiMicco said.
China’s currency is undervalued and gives its exporters a 40 percent subsidy on shipments, he said. If China only revalues its currency by 4 percent to 5 percent, that “trivial” amount shouldn’t be enough to derail efforts in the U.S. Congress to punish China for currency manipulation, DiMicco said.
Domestic steel producers are also facing “substantially higher costs” for inputs including scrap steel, coke, metallurgical coal and iron ore that are a challenge for the industry, James Wainscott, CEO of AK Steel Holding Corp., said on the call. Wainscott also is the institute’s vice chairman.
Nucor rose 28 cents to $45.60 at 12:37 p.m. in New York Stock Exchange composite trading. AK Steel dropped 24 cents to $16.51.