U.S. Steel Says Domestic Use May Not Recover Before 2015
John Surma, Chairman and Chief Executive Officer of U.S. Steel Corp., the country’s biggest producer of the metal, said domestic demand won’t reach pre-recession levels before 2015 as construction spending languishes.
The 2.7 percent increase in U.S. steel use in 2013 that’s forecast by the World Steel Association will bring consumption to only 92 percent of 2007’s level, the year before the financial crisis and collapse in commodity prices, Surma said.
“We’re still not quite there,” he said in a May 13 interview in Leipsic, Ohio.
U.S. spending on construction has slumped to a seasonally adjusted annual rate of $856.7 billion in March, the lowest since August, according to the latest data from the U.S. Census bureau. Industrywide steelmaking capacity utilization in the U.S. was at 79 percent for the week ending May 7, according to American Iron and Steel Institute data. The rate exceeded 90 percent in the first half of 2008.
Surma has sold an unprofitable Serbian steel mill and expanded into higher-margin products as he tries to improve performance at the Pittsburgh-based company, which has posted a loss in the past two quarters. He was in Ohio on May 13 for the commissioning of a $400 million production line at Pro-Tec, a 50-50 joint venture with Japan’s Kobe Steel Ltd. (5406) The new line will produce 500,000 tons a year of coated, heat-treated steel for automotive customers.
U.S demand for finished steel products will increase 2.7 percent this year to 99.3 million tons, according to U.S. Steel, which cites data from the Brussels-based World Steel Association. Demand was 108.3 million tons in 2007.
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