U.S. Steel (X-US) CEO said in an interview on Friday (28th) that those who bet that steel prices will fall further may be disappointed. He predicted that although the current domestic steel price in the United States is only nearly half of last August, the long-term average price will be higher than the past 10-year average.
US domestic steel prices are currently around 1170 per ton Dollar, recalling that it was close to 2000 in August last year Dollar. U.S. Steel Chief Executive David Burritt said that while he doesn’t think steel prices are strong enough to return to where they were last August, the long-term average will be higher than it has been over the past 10 years.
“I don’t know if it’s going to recover, I don’t think I’m the sharpest speculator in this,” he said. “[But]the price will stay at a level where we can outperform.”
The entire U.S. steel industry delivered one of the most lucrative years in history last year, but it faces questions regarding whether strong demand can be sustained as supply chain disruptions hit consumers.
Canadian steelmaker Stelco said last week that the North American steel market is a “falling knife” as demand shrinks and supply increases. BMO Capital Markets believes that U.S. steel is increasing supply despite falling prices, while Wolfe Research said the steel industry is expected to decline in the first quarter amid reports that customers are cutting orders.
However, U.S. Steel’s Burritt explained why he is relatively optimistic with the backlog data, and pointed out that industries such as home appliances and automobiles cannot fully produce due to the shortage of chips, and the demand for steel is actually suppressed.
U.S. Steel reported mixed fourth-quarter earnings on Thursday, with revenue jumping 119% to $5.622 billionDollar, but adjusted EPS of 3.64 Dollar, far below market expectations.However, U.S. Steel also announced a plan to increase its treasury stock by 500 millionDollar, inspiring shares to surge 5.1% to 19.54 per share on Friday Dollar。
Burrit is leading U.S. Steel’s shift from traditional alloy production to electric arc furnace steelmaking.