International credit rating agency Moody’s has announced that it has revised the outlook for the US steel industry to stable from negative on the back of rising prices, improving capacity utilization and declining imports. The outlook reflects Moody's expectations for the fundamental business conditions in the sector over the next 12 to 18 months.
According to Moody’s, hot rolled coil (HRC) prices have risen three times, to $560/mt, since bottoming out in October at about $470/mt and a fourth increase taking HRC to $600/mt was recently announced. Moody’s anticipates that 2017 will continue to build on this year's advances.
Meanwhile, capacity utilization of the US steel industry, while below Moody's stable outlook trigger of 75 percent, was 68.9 percent for the week ended on December 3 and continues to increase weekly, albeit at a slow pace. Moody's expects capacity utilization to range between 70 percent and 74 percent in 2017.
In addition, the credit rating agency stated that the US steelmakers have also benefited from fewer steel imports, largely the result of positive outcomes in several antidumping trade cases. In the first ten months of the current year, total US steel imports decreased by 19 percent to 27.5 million mt and finished steel imports went down by 19.8 percent to 22 million mt, both compared to the same period of the previous year.