Nucor Sees ‘Dire’ Outlook for U.S. Steel on ‘Unfair’ Importsby
China's September steel exports jump to highest on record
U.S. benchmark steel prices decline 35% in past year
Growth in American steel demand won’t be enough to reverse U.S. steelmakers’ misery until regulators do a better job of halting imports of the metal that domestic producers say are unfairly traded, said John Ferriola, Chief Executive Officer of Nucor Corp.
“If demand grew, and we were unsuccessful in battling the illegally and unfairly traded imports, the situation would still be rather dire for our industry,” Ferriola said in an interview on Sunday at Worldsteel-49, an industry conference in Chicago.
Nucor, the country’s biggest steel producer, has idled as much as 35 percent of its steelmaking capacity this year and third-quarter profit is expected to drop by 41 percent from a year earlier. Slowing Chinese consumption of raw materials has contributed to a global glut of metals such as steel, copper and aluminum. At the same time, a strong dollar and growth in the domestic auto and construction industries have made the U.S. an attractive market for global supplies.
The U.S. price of hot-rolled steel coil, the metal’s benchmark product, has tumbled 35 percent in the past 12 months to $423 a short ton, according to data compiled by Bloomberg from The Steel Index, a trade publication that surveys buyers and sellers.
Steel exports from China jumped to 11.25 million metric tons in September, the highest monthly total on record, according to data from the nation’s customs agency on Tuesday.
Chinese steel use will fall 3.5 percent this year to 685.9 million metric tons, the World Steel Association said Monday. The contraction marks the first decline in the biggest producer and consumer of the metal since 1995.
The global steel industry has 600 million tons of surplus capacity, compared with about 115 million tons consumed in the U.S. per year, Ferriola said.
“It’s kind of sad, because frankly, demand is pretty good in the U.S.,” Ferriola said. “The tsunami of illegally imported and unfairly traded products has negated all of the gains we’ve had through demand increases.”
(An earlier version of this story was corrected because it incorrectly stated the level of Nucor’s capacity utilization in the the third paragraph.)