Low demand eats into US steelmakers' share prices

Low demand eats into US steelmakers’ share prices

Contrary to many analysts' forecasts that 2005 would be a banner year for the steel industry, US steelmakers have been staring at rising inventories and falling prices as of late. One of the reasons for the current situation is that many Americans simply do not prefer to buy American cars anymore. A lack of demand for their cars, coupled with skyrocketing steel prices, led several manufacturers to scale back production. The ensuing drop-off in steel demand from auto manufacturers came right at the time when many steelmakers were upping production to take advantage of the higher prices. This meant that instead of being able to offload their products, steelmakers were left with ever-increasing stockpiles. Cheaper steel imports have also played a part in the emerging bottleneck for US steelmakers. For that reason, the US International Trade Commission decided to extend duties and other anti-dumping measures on imports from steelmakers in Brazil, Russia and Japan for an additonal 5 years on Thursday (April 14). Despite the victory for the US steel industry on Thursday, the stock prices of key steelmakers took a major beating yesterday: US Steel Corp. shares slipped 3.6% to $44.38; Nucor Corp. fell 4.7% to $49.90; AK Steel Holding Corp. tumbled 6.6% to $9.23; and Oregon Steel Mills Inc. nosedived 8.6% to $18.93.