US Steel Market Facing Threat Of Supply Increases

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By Chris Shaw

The North American steel market could face an uncertain future in the view of industry consultant MEPS, as it notes there is the potential for a significant increase in capacity.

The potential increase comes from a few sources, with ThyssenKrupp recently announcing plans for a new stainless steel plant producing up to 1m tonnes annually at the same time as North American Stainless (NAS) has moved to increase its capacity and previously expected plant shutdowns from Allegheny Ludlum have failed to materialise.

The NAS expansion is expected to result in a 400,000 tonne increase in its melting capacity, while the addition of a fifth mill will boost its cold rolled strip output. As MEPS notes this means its additional output with be competing directly with ThyssenKrupp’s new plant, which leads to the risk of the market moving into oversupply.

As MEPS points out there remains the possibility the ThuyssenKrupp plant won’t happen, as it appears to be dependent on the company gaining control of Dofasco. While this remains in doubt, expect the US steel market to remain uncertain.

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