US steelmakers hope to restore demand in 2025

US steel industry executives are optimistic about a rebound in U.S. steel demand in 2025. This was discussed at the SMU Steel Summit in Atlanta, Bloomberg reports.

Many industry leaders have high hopes for the next year, seeing as market drivers the improvement of the US economy, large infrastructure projects and lower interest rates, which stimulates consumer spending.

Despite the potential for increased spending on large energy projects thanks to government incentives, higher borrowing costs are holding back production and economic growth. According to the American Iron and Steel Institute (AISI), demand for steel in the United States in the first half of 2024 decreased by about 0.4% year on year – to 50.9 million tons.

Basic futures for US steel since the beginning of this year decreased by 37%, the agency said, and in early summer reached the lowest level since December 2022.

The Federal Reserve’s signal to cut rates as early as September increases the prospects for a turnaround for steel consumer sectors.

According to Kevin Dempsey, president of AISI, they expect an increase in domestic demand from the construction industry, since all investments in recent years have been driven by government policy.

Among those decisions is the Infrastructure and Investment Jobs Act of 2021. According to Jeff Gilmore, executive director of Worthington Steel, it provides $550 billion for projects using steel, which is approximately 50 million tons of metal products.

However, the industry still faces certain challenges. In particular, in the coming months, the United States plans to commission new steel facilities, including the new US Steel plant – Big River 2 in Arkansas. This threatens to outstrip demand growth.

American industrialists also face trade problems, including falling world prices due to an overabundance of Chinese steel and an influx of cheap foreign metal products despite protective measures. Another risk factor is President Another risk factor is the US presidential election.

As GMK Center reported earlier, in August 2024, US Democratic Congressman Ro Khanna introduced a bill to revive the steel industry – the Modern Steel Act. This is a transformational initiative that will build new steel plants in deindustrialized cities, strengthen domestic production, create well-paid jobs and maintain existing ones, as well as increase US industrial competitiveness at the world level.