Steel Demand Begins to Sprout After Unprecedented Collapse

SEATTLE (Scrap Monster): The global pandemic has caused an unprecedented collapse in steel demand, but demand has begun to sprout, says Kevin Dempsey, interim president and chief executive, AISI. The proper national policy initiatives could result in more flourished demand for steel, he said.

The capacity utilization rates, which had dropped sharply to just over 51% in the beginning of May this year, have crept back to 59% in the initial week of August. This signals positive sign of recovery, although there is a long way to go. By keeping the Section 232 tariffs, continuing to vigorously enforce other trade laws and adopting further measures to strengthen the economy, the industry is likely to return to a stronger position.

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Dempsey noted that China continues to remain a non-market economy in steel, contributing to further imbalances between demand and supply. The COVID-19 pandemic has significantly impacted global steel production with the exception of China. When the rest of the world saw declines ranging from 15% to 17%, China recorded increase in steel production. Surprisingly, Chinese steel inventories hit record levels over the spring.

The entire steel industry has been extremely disappointed by the Chinese decision to withdraw from the Global Forum, he noted.