American Institute for International Steel, in its latest market survey, said that when prices on the US steel market rose slightly near the end of 2008, it looked as if the steel market had hit bottom. The price of scrap, which had declined sharply along with other commodities earlier in 2008, was finally starting to rise again, and some mills raised their prices so they could reap the benefits. But by early January, most of that optimism evaporated, giving way to weariness about the pace of recovery.
In June 2008, prices for hot rolled steel hit about USD 1,000 per tonne, but they have dropped to the mid USD 500 level, even though mills are producing at only 50% of capacity. The main reason is weak demand for steel in two major industrial sectors namely autos and housing. Only about 20% of the steel used in the United States is imported, including some types of steel that must be imported from Japan and the European Union, such as high strength dual phase steel and TRIP steel.
Mr Robert Palaima president of Delaware River Stevedores Inc said that for steel importers, low prices and weak demand add up to one of the coldest, bleakest winters in memory. Along the Delaware River, a key entry point for steel, import volumes are generally speaking way down.
Mr Bill Gaskin president of Precision Metalforming Association said that "Demand stinks. There is no optimism. This is a stagnant market."
Mr Dave Phelps president of American Institute for International Steel said that demand for non North American Free Trade Agreement material dried up in October 2008 and remains that way. He added that he expects a big drop in steel arrivals this month and in February, based on the lower volume of orders placed last September and October.
Mr Phelps said that AIIS has long promoted the elimination of 'Buy National' preferences, but he added that "Buy American preferences for highway, bridge and mass transit have long been in place and are not inconsistent with US international obligations under the World Trade Organization’s Government Procurement Agreement. The purpose of that agreement is to open up as much government procurement activity as possible to international competition."