CRU Forecast: Steel Prices to Moderate in 2019

Import arrivals for both sheet and plate are down versus the peak 2015 levels. Sheet imports have fallen by 15 percent year to date, while cut-length plate arrivals are down 21 percent. “The storyline is that imports are not coming in at the rate they would be expected to [given the high steel prices] simply because of 232,” Spoores said. “In terms of plate, there is just an absence of imports.”

Service center inventories of sheet and plate are limited. Service center shipments of steel sheet are up 4.3 percent and plate shipments are up 11.3 percent year to date, but a seasonal slowdown is coming, Spoores said.

Next year, strong U.S. industrial growth will give way to slower, yet still positive growth, he predicts. “Looking at industrial production, we are at or have passed peak economic growth. Growth will continue next year but at a slower rate. As that continues, it will affect demand for steel sheet and plate.”

Current steel prices are more affected by supply and demand, along with the tariffs. In 12-18 months, steelmaking costs will fall back to 2017 levels, which may provide some room for finished steel prices to fall, Spoores said.

While CRU expects U.S. prices to ease over the next several months, they will remain substantially higher than their five- and 10-year averages. CRU forecasts HR coil prices in 2019 at around $750 per ton and plate at around $850 per ton.