USA steel shipments in the first six months of 2013 were down 5.4 percent versus the corresponding period in 2012. For the year, however, when taking into account the prospect for somewhat reduced imports, a decline in exports and no major steel user inventory change, we estimate that domestic shipments may be flat at about 96 million mt. Currently, our weighted index of activity for 15 steel-consuming industries is up only about two percent year-to-year - versus a year-to-year gain in the spring of 2012 of about 13 percent.
The situation for the USA economy and its steel industry appears to be better than is the case for many other countries. In fact, this relatively improved prospect may be reflected in the soaring USA stock market. The Dow Jones Industrial Index started 2013 at 13,412 and is currently priced 12.1 percent higher at 15,030.
- A rising number of new manufacturing factories are under construction, we hear from those in the steel industry. Overall, nonresidential construction activity has been steady at about 10 percent of GDP.
- The domestic oil country tubular goods sector appears to have quite favorable volume prospects, although prices are well down at present from the 2008 peak, especially given that oil and gas well drilling - via the use of fracking to extract oil and gas from shale - is forecast to continue to rise in the years ahead. Foreign deliveries will likely be somewhat restrained by anti-dumping and countervailing duty suits.
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