Moody’s forecasts a stable US steel industry in 2004
The international rating agency Moody's Investors Services has recently announced that the outlook for the steel industry in the US is stable for this year. Moody's based this expectation on the fact that the reasonable growth seen in industrial
production, as well as rising prices, will compensate the overcapacity and increasing input cost problems of 2003.
Additionally, it is expressed that the repeal of S201 safeguard measures will have a very slight effect in the short run on most steel producers in the US. Furthermore, operating performance of the steel companies
manufacturing stainless steel bar, rod and
wire that were able to reap advantages of S201 unlike many others due to exemptions granted after implementation of these measures, will probably descend. However, in general, operating performances are expected to improve.
According to Moody's, in 2004,
US steel producers should make effective use of the slight increase in demand that derives from the increase in auto
production, commercial and public sector
construction as well as residential
construction which keeps its strong trend.
This year, capital expenditure is expected to rise in the US due to expanding capacity utilization and input costs to surge worldwide as global demand for feedstock such as
iron ore, coke and
scrap is getting firmer and shipping rates and natural gas prices are going upwards.