Steel Industry Outlook 2024
After years of disruptions, is the steel industry set to return to normal in 2024?
In this article, we review current steel industry trends, including overall production and scrap surcharge metrics, to consider the answer to this question. While the industry continues to recover, substantial risks remain, and businesses that rely on steel will do well to lock in a reliable source from a quality supply chain partner.
Steel Industry Trends: Pricing and Production
So far in 2024, steel production has slightly fallen behind 2023’s rate but overall appears on pace for a similar year.
Source: Sector3 Appraisals, Inc.
Industry capacity utilization has recovered since a major dip in 2020, and the input costs highlighted below provide some evidence that the steel market has largely recovered from a series of historic disruptions.
We highlight some more granular price and manufacturing indicators below.
While some volatility remains, scrap prices continue to come down from their 2022 heights. The COVID-19 pandemic, followed by the Russian invasion of Ukraine in 2021 and ensuing supply chain disruptions, created unprecedented challenges for the scrap market.
While the impact on the steel market has taken years to unwind, scrap prices are finally returning closer to long-term averages.
AMM Pricing Trends
The American Metal Market (AMM) is a recognized authority for reporting on steel industry pricing. Their pricing data confirms the evidence provided by scrap surcharge trends: the steel supply has slowly returned to normal, but substantial volatility remains.
Mill Lead Time Trends
Mill lead times, the duration from when a steel order is placed until it is delivered, provide an effective gauge of overall industry steel manufacturing capacity. As one might expect from the pricing data above, lead times have come down since the worst shortages but bumped up slightly again in 2024.
Steel Industry Outlook 2024: Potential Sources of Risk
Based on our own experience providing a variety of steel materials for clients in many different industries, we project that demand for SBQ products should remain steady, with strength in the automotive sector only partially offset by a slightly slower oil and gas market.
The unprecedented disruptions to production and pricing that defined the last several years appear to be in the rearview mirror, for now. However, there are still potential sources of uncertainty on the horizon, and businesses that depend on a cost-effective supply of quality steel should not count on prices necessarily continuing to decline.
With the Presidential election fast approaching, there is a strong possibility of the reintroduction of tariffs on steel imports, which would help protect the competitiveness of US steel but may exert upward pressure on price. Meanwhile, continuing geopolitical conflicts in Ukraine and the Middle East continue to create ongoing, unpredictable risks to the global supply chain for steel (in addition to energy prices and many other commodities).
Jade Steel: Your Steel Supply Chain Partner
For over 55 years, Jade Sterling Steel has been one of the nation’s premier distributors of steel bar and wire rod. Our 40,000+ ton inventory features a broad selection of grades, sizes, and finishing options, giving our customers the flexibility to select the best material for their needs. Whether you need a just-in-time delivery or a long-term supply chain partner, our team is here to help.
Please reach out to our team if you have any questions or topics you would like to see covered in the future.
