These are interesting times for steel company investors. Until last year, there was a broad consensus in the market that a higher level of steel imports was the only challenge for the US steel industry. The fear was not unfounded, as steel imports as a percentage of domestic consumption reached record highs.
However, steel demand was buoyant for the most part of last year. Steel companies were also excited about the business prospects. There was a lot of merger and acquisition activity in the US steel industry. One of the most notable was the acquisition of Severstal’s assets by AK Steel (AKS) and Steel Dynamics. Nucor (NUE) also acquired the Gallatin plant from ArcelorMittal.
An overview of this series
Steel companies have had a lackluster Wall Street performance this year. In this series, we’ll analyze the challenges that the steel industry currently faces and support our analysis with recent industry indicators. We’ll look at how the steel industry is shaping up in the US as well as globally. We’ll also discuss the recent trends in steel production and consumption.
Steel imports are one of the challenges that the US steel industry faces. Meanwhile, along with steel imports, the US steel industry has also been hit by a consumption slowdown. In the next part, we’ll analyze the latest indicators of US steel demand.