Govt Enforces ‘Melt and Pour’ Rule for All Steel in Public Projects Nippon Steel expected to finalize U.S. Steel acquisition at $55 per share NMDC Limited reports a 38% drop in Q4 FY24 consolidated net profit RINL to Raise $23 Million Through Land Sales Amid Crisis
The price of flat-rolled steel in the United States continued its downward trend, dipping over 5% in the first half of February after a 2% decline in January. This drop brought hot-rolled coil prices to around $1,000 per tonne, indicating a significant bearish trend in recent weeks.
Quarterly financial statements released in late January by Cleveland Cliffs and Nucor revealed a slowdown in steel shipments during the last quarter of 2023. While both companies remained profitable, the challenging market conditions led to a notable decrease in earnings.
Despite a three-month uptrend in flat-rolled steel prices, major domestic producers reported lower steel shipments in Q4. This discrepancy contrasts with the steady increase in prices, especially for hot-rolled coil, cold-rolled coil, and hot-dipped galvanised products, which saw a peak at the beginning of the year with a remarkable 61% jump in hot-rolled coil prices.
The manufacturing sector remains in contraction, compounded by factors such as UAW strikes and extended lead times for steel mills, indicating an oversupplied market.
Steelmakers responded to the oversupply by adjusting their capacity, leading to a peak in capacity utilisation rates by the end of June 2023, followed by a downward trend for the rest of the year.
Despite the weakening steel prices, Nucor and Cliffs anticipate a boost in shipments for Q1 2024, which is consistent with seasonal patterns. However, recent declines in steel prices and mill lead times suggest a bearish market outlook in the short term.
In another development, former President Donald Trump stated his intention to block Nippon Steel's acquisition of U.S. Steel if reelected in November. Trump's comments add to existing concerns about the acquisition, with bipartisan opposition citing national security worries.
The acquisition faces resistance from unions and lawmakers, including Senator John Fetterman, JD Vance, and Marco Rubio, further complicating Nippon's efforts.
The outcome of the acquisition remains uncertain amid increasing opposition and the looming presidential election. Nippon's aggressive bid could face significant challenges, potentially altering the landscape of the domestic steel sector.
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