The steel industry generated solid sales last year, with skyrocketing steel prices fueled by supply cuts and shipping bottlenecks amid rising demand in a recovering economy. The benchmark price for hot-rolled steel quadrupled within a year to peak at $1,955/ton in September 2021. President Biden’s Infrastructure Bill, which was signed into law in November 2021, allocates approximately $850 million to steel-intensive projects. This is expected to create as much as 40 - 45 million tons of new steel demand over the life of those projects, thereby boosting the industry significantly.
Although steel prices might be vulnerable to a correction this year, prices are expected to remain reasonably high compared to the historical average. “Prices are coming down, and they are coming down sharply, but we still believe the annual average will be 75% higher than that 10-year average,” predicted John Anton, director of pricing and purchasing at IHS Markit. Worldsteel Association forecasts steel demand to grow by 2.2% to 1,896.4 Mt, driven by solid manufacturing activity.
