At CRU’s 6th annual North American Steel Conference held in Chicago last week, CRU Managing Consultant Robert Edwards presented the group’s outlook for steel demand and pricing going forward.
According to Mr. Edwards, CRU’s expectations for GDP growth are 2.3% in 2013 and 2.9% in 2014, assuming the fiscal cliff is averted. CRU’s expectation for steel demand through 1H13 is for a seasonal if not real recovery in demand along with a corresponding rise in prices from today through the end of 1H13.
Looking at specific markets, CRU anticipates automotive production in the United States to hit 14.9 million vehicles this year – gradually moving up to 17.2 million in 2017. Residential and non-residential construction activity is also expected to start showing growth totaling about 7% in the next 5 years.
Mr. Edwards did offer some caution regarding prices in the longer term, saying that HRC prices will likely peak in 2Q13 at $665/t and begin to drift downwards over the next 5 years due to slipping raw materials prices – after which CRU sees HRC below $600 on a sustained basis.
