The 35th Annual Tampa Steel Conference kicked off on Sunday, January 28, and this year’s event drew hundreds of attendees from throughout the globe. And while speakers at the event touched upon a variety of topics, from pricing to lead times to inventory management, but among the most pressing topics related to what analysts forecast will happen to sheet prices in 2024.
Josh Spoores, Principal Consultant, North American Steel Analyst at CRU, is among the many industry players that thinks we’re rounding the top of the current pricing bell curve.
“The prices we’re seeing are rounding the top of this cycle. Mills are negotiating more, inventories are not low, production is rising and lead times are falling,” he said, adding that demand for steel in the top 3 steel intensive durable goods sectors are down, whereas iron and steel production is going up.
“Sheet prices are forecast to fall for a historic third consecutive year, falling still from the high point of the pandemic, and [recovering] from some of the volatility that was spurred by the war in Ukraine”
He believes that the average price for HRC for the current year will trend at approximately $40 cwt. ($882/mt or $800/nt).
Timna Tanners, Metals and Mining Equity Research Analyst at Wolfe Research, agrees with that price prediction.
“In 2023, sheet supply was flat despite new capacity,” she said. “For 2024, the price cadence could look similar to what we saw for the past 2 years. A strong H1 compared to H2, and [new capacity / new steel mills] ramping up should drive oversupply, with demand looking flat.”
She also noted that with this new capacity, scrap demand is set to surge through 2025, which poses real risk of higher input costs that can’t be passed through to customers.
“Excess sheet supply and [increased demand for scrap] will squeeze mills’ margins, she added.
The wildcards for the current year, the analysts said, include the US elections, global conflicts, and whether or not AHMSA is able to restart in 2024, which could further exacerbate sheet oversupply in the US.
Citi’s Head of Americas Metals & Mining Alex Hacking also believes that this year’s demand will be weaker than it was in 2023, which is in part, being driven by tightness in credit and lending.
“Construction is weaker, general manufacturing is weaker, and the early signs indicate that US economic activity is heading toward a significant slowdown and likely a recession,” he concluded. “But for the long term, we still believe we are in the best steel market in a generation.”
The dates for next year’s Tampa Bay Steel Conference are expected to be announced within the next several months.