Steel demand drops in U.S.

[HenryTo]

Don't forget that China is set to become a net exporter of steel this year for the first time in history.
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Steel demand drops in U.S. - report
By MarketWatch
Last Update: 1:32 AM ET April 14, 2005

SAN FRANCISCO (MarketWatch) -- Unexpected slowing demand for steel in the U.S. is prompting steelmakers to reduce production as prices weaken, according to a media report Wednesday.

The decline in benchmark prices for steel products, which have fallen for six straights, is contrary to predictions of a turnaround in the second quarter, The Wall Street Journal reported in its online edition. See Wall Street Journal story.

United States Steel Corp. (X: news, chart, profile) is scheduling temporary shutdowns for repairs; Nucor Corp. (NUE: news, chart, profile) has cut production and Mittal Steel Co. NV (MT: news, chart, profile) has temporarily shut down its International Steel Group's Cleveland, Ohio, operations just 11 months after restarting them, The Journal said.

Some European producers also are reducing output, according to the report.

Steel production in the U.S. has dropped by nearly 10% in the past year, The Journal said, citing American Iron and Steel Institute figures showing companies using 83.3% of steel-making capacity for the week ended April 9 compared with 93.3% a year ago.

Although worldwide market for steel remains strong, U.S. companies are dealing with disappointing outlooks from auto makers, their major customers, The Journal said.

Spot prices of hot-rolled coil steel, a key benchmark product used to make autos and washing machines, have dropped 20% to the current $575 per ton on the spot market from a high of $735 early in the fourth quarter, The Journal reported.

Peter Marcus, a partner in Englewood Cliffs, N.J.-based World Steel Dynamics, predicts further declines, with the world export price for hot-rolled coil dropping 22% to $450 per ton by the third quarter, according to the report.

[HenryTo]

More follow-up to the continuing debacle in steel:
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ThyssenKrupp to Cut Steel Production by 10% to Maintain Prices

April 22 (Bloomberg) -- ThyssenKrupp AG, Europe's fourth- largest steelmaker, plans to cut steel production by 10 percent to maintain prices at current levels, as imports and inventories of the metal increased since the beginning of the year.

Higher customers inventories and imports, mainly to southern Europe, put pressure on prices, the Duisburg, Germany-based steel company said in a faxed statement.

The stock fell as much as 21 cents, or 1.4 percent, to 14.52 euros and was trading at 14.68 euros at 3:50 p.m. in Frankfurt. Salzgitter AG, ThyssenKrupp's smaller German competitor, fell as much as 47 cents, or 2.9, to 15.81 euros.

ThyssenKrupp posted a record profit in the 2004 fiscal year, when it raised steel prices four times.