Phil Gibbs, senior analyst for metals and mining at KeyBanc, said on Tuesday that KeyBanc Capital Markets downgraded the U.S. steel demand assessment by 2020 to cope with the global coronavirus pandemic.
KeyBanc now expects that by 2020, US steel consumption will drop by 8 -11%, depending on the product, with demand for flat steel products expected to fall by 9.5% this year, Gibbs said. know Tuesday in an online seminar on the impact of the coronavirus pandemic on the steel market.
Demand for panels is expected to plummet as some energy companies have cut spending by 30% -40% amid falling oil prices and automakers have announced ceasing production after. when coronavirus.
KeyBanc expects North American automobile production to fall by 15% in 2020 and by more than 30% from the previous year in the second quarter, Gibbs said.
Although the US construction market has been more isolated than the energy and automotive sectors in the context of coronavirus response, demand for construction steel is expected to decline to a low figure. This year, contrary to previous forecasts of stable markets, Gibbs said.
Most infrastructure projects across the country are likely to return in a short time, especially public works projects, Gibbs said.
Looking at prices, KeyBanc now predicts US HR coil prices will bottom out at around US $ 450 per tonne and the market is likely to bottom out in late Q2 or early Q3, Gibbs said. Hot rolled coil index is calculated at 560 USD / ton shipped Indiana Tuesday, unchanged compared with Monday.
Gibbs said it is likely that US plate prices will continue to be affected as customers cancel orders under contracts and factories that primarily serve the auto market find new markets for their steel.
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