Moody's bumps US steel industry outlook to stable

The outlook for the United States steel industry has been revised to stable from negative on the back of rising prices, improving capacity utilization and declining imports, Moody's Investors Service says in a new report. The outlook reflects Moody's expectations for the fundamental business conditions in the sector over the next 12 to 18 months.

Hot-rolled coil (HRC) prices have risen three times, to $560/ton, since bottoming out in October at about $470/ton. A fourth increase taking HRC to $600/ton was recently announced.

"We anticipate 2017 will continue to build on this year's advances and our price sensitivities range from $550/ton to $600/ton," said Moody's Senior Vice President Carol Cowan.

Capacity utilization, while below Moody's stable outlook trigger of 75%, was 68.9% for the week ending on December 3 and continues to increase weekly, albeit at a slow pace. Moody's expects capacity utilization to range between 70% and 74% in 2017.

US steelmakers have also benefited from fewer steel imports, largely the result of positive outcomes in several anti-dumping trade cases. Year-on-year through October, total steel imports are down 19% to 27.5 million tons and finished steel imports have fallen 19.8% to 22 million tons.

Read full report here.