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2019 Steel Outlook The Path Forward-2019 China(Guangzhou) Int’l Laser Equipment and Sheet Metal Industry Exhibition
3/21/2019 - Laser Equipment, Sheet Metal Industry expo |
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The past year was unquestionably a wild ride for the domestic steel industry. And with the combination of congressional upheaval in Washington, the ever-changing ins and outs of trade policy, the potential for interest rate hikes and more, the next 12 months figure to be just as tumultuous.
Expectations for the year ahead are similarly varied, with projections of demand growth and declines being issued in near-equal measure, depending on the day and the speaker. There are no certainties as the steel industry ushers in 2019.
Metal Center News spoke to five leading steel analysts to get a sense of what to expect in 2019. Consensus was hardly the rule.
Becky Hites, president of Steel-Insights LLC, is optimistic about the year ahead, but acknowledged how fragile her prediction is. “I’m pretty bullish. I may end up falling on my sword, since there are a lot of ways it can go the other way. But I’m a big believer in the tax repatriation program, and the opportunity zones have provided affordable financing for any kind of manufacturing that goes into low-income areas,” she said.
The counter to Hites’s sunny outlook is veteran steel analyst Chuck Bradford of New York-based Bradford Research, who nonetheless offered his own other hand to a generally pessimistic take. “The outlook is not very good for next year, unless you can get a really good infrastructure program.”
Richard Oppelt, of consulting firm Accenture, splits the difference. Oppelt, Accenture’s senior principal director within the metals and mining practice, believes consumption may be down slightly in 2019, but shipments will likely remain flat to up slightly, as steel imports continue to trend downward.
The effort to curb imports through trade actions was the dominant story of 2018, with President Donald Trump’s initiation of Section 232 tariff relief, and the dominoes that tumbled in response, driving the domestic industry’s performance. How the analysts think the tariff situation is resolved, and the effects on the supply chain, play a large role in their expectations this year.
The tariffs will remain the rule for the foreseeable future, which is good news for domestic producers. “When you consider the tariffs didn’t kick in until the second quarter, and really start to impact imports until late in the second quarter, early in the third, a full year of that will push imports down,” said Oppelt.
Hites agrees. With her expectation of consumption growth and significant import declines, she’s anticipating U.S. production of 122 million tons next year. “I’m continuing to show imports down,” she said. She said foreign steel could drop from 36 million tons in 2018 to as low as 25 million next year, though the domestic producers could be challenged to meet that level of demand given existing capacity
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-2019 China(Guangzhou) Int’l Laser Equipment and Sheet Metal Industry Exhibition
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