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Steel production, scrap demand to rise: MBR

Keywords: Tags  steel, scrap, iron ore, pig iron, metallics, raw materials, Brad MacAuley, Metal Bulletin Reserach MBR

NEW YORK — U.S. crude steel production will increase 4 percent this year to about 90.5 million tonnes from 87 million tonnes in 2013, boosted by increased demand for industrial production and housing starts, according to Metal Bulletin Research (MBR).

Ferrous scrap demand will climb nearly 7 percent to 64 million tonnes in 2014 from about 60 million tonnes last year, MBR metals analyst Brad MacAulay told attendees at AMM’s 19th Annual Mexican Steel Forum in Cancun. "U.S. scrap consumption will increase at a faster pace than crude steel output owing to higher capacity utilization rates at electric-arc furnace steel mills," he said.

Increased demand also is seen offering some support to iron metallics prices, although expectations of lower global iron ore prices in 2014 will counter some of the increase in crude steel output putting pressure on metallics prices at the margin, according to MacAulay. "As a result, prices are expected to remain range-bound but slightly higher than average prices in 2013, primarily garnering support by the continued recovery in U.S. crude steel output."

MBR expects U.S. pig iron imports to be impacted by Charlotte, N.C.-based Nucor Corp.’s recently opened direct-reduced iron facility in Louisiana.

"As production ramps up, import volumes of pig iron from Brazil are expected to fall. That being said, increased levels of crude output will increase demand for iron metallics, offsetting some of the decline. MBR expects that the net impact will result in a 10- to 15-percent decline from levels seen in 2013—this is a very conservative estimate—in pig iron imports," MacAulay said.

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