Steel Price Forecast and Steel Market Outlook

Mar. 07, 2024

Prices soften on weaker steel demand outlook

Steel prices essentially collapsed in May through early July. The Russian invasion of Ukraine caused prices to rise by $500 per ton in Europe and the United States, but they were already back down by $600 or more by mid-July. Another $200–250 per ton is expected for coil; the question is whether the rapid collapse continues, meaning steel prices fall fast and reach a bottom by the end of 2022, or whether the remaining decline stretches into 2023. We are adopting the second scenario, as prices consolidate when electricity and natural gas shortages restrain steel production. Risk, however, is dominant to the downside. In fact, the only strong upside risk through the end of 2022 is energy shortages become so severe that steel production is cut severely.

Steel supply fears are largely gone. The almost immediate recovery in Russian exports of ore, scrap, and semifinished means that steel production disruption has not been significant in Europe or North America. Almost the only upside risk to steel prices is an embargo of Russian steel and raw materials. However, this appears unlikely as all political effort has targeted petroleum.

Bottom line: Steel prices are plummeting although still above their long-term average. More declines will come so delay locking as long as possible. Beware steel production cuts if electricity is rationed.

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What is the price of steel?

Domestic prices for metal sheet continue to fall with spot prices around $800/ton as of February 28. Compare this to the price on January 10, $1.096/ton, and you can see the downward trajectory that has been playing out to start 2024.

While macro-economic factors always play a role in steel prices, 2024 presents the added factor of being an election year. This begs the question, 'how do steel prices perform in election years?' Ryerson recently spoke with both internal and external market experts on this topic. Here is what the cumulative data tells us.

Nick Webb, Ryerson's director of risk management, commodity hedging, breaks down the steel prices to begin 2024:

Market conditions that characterized in the domestic steel market late in 2023, rising prices and cautious production, seem poised for a potential shift. According to Webb, this is due in part to import dynamics, raw material costs, and market expectations.

For instance, a raw material inflation trend in scrap and iron ore prices, has been noteworthy. Though these price hikes don’t solely justify the substantial surge in steel prices, when combined with the factors like lower production, utilization rates, and stockpiling, they have contributed to the current market volatility.

What is the Price of Steel Plate?

As of February 28, steel plate prices were at $1,262/ton, down roughly $100/ton over the past month. The pricing spread between PMP (plate mill plate) and HRC remains above historical norms at more than $400.

What is the Capacity Utilization Rate for Steel Mills?

According to the American Iron and Steel Institute, in the week ending on February 24, 2024, domestic raw steel production was 1,727,000 net tons while the utilization rate was 77.8%. Both are down from the previous week, at 1,800,000 net tons and a utilization rate of 80.5% in the week ending February 24, 2023.

What is the Price of Coated Steel?

As of February 28, the price of coated steel was roughly $1,261/ton, down nearly $100 from early January. Nucor recently announced a reduction to their coating adders, effective for October shipments. For more on galvanized steel, check out this article.

Need to explore the current stock of carbon steel?

Ryerson: The Metal Supplier of Choice

Ryerson is a leading North American metal supplier that provides more than just metal. We respond to the ever-changing needs of manufacturing today.

With a vast inventory of steel, stainless, aluminum, alloy, and more, we are committed to providing our customers with the metal and services they need to succeed. We stock a range of shapes and sizes, or we can provide processing and fabrication for every product we sell.

Order online at Ryerson.com for comprehensive pricing and fast delivery, or contact us today to learn more about how we can meet your metal needs.

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