By Alex MacDonald
LONDON--Steel titan ArcelorMittal (MT) said Wednesday that U.S. steel demand remains robust and recent steel price increases for North American hot rolled coil are sticking as the steel import threat subsides.
North American steelmakers were hit hard in the second quarter by increased steel imports due to a higher premium fetched for certain U.S. steel products compared with other parts of the world. Both NuCor Corp. (NUE) and AK Steel Holding Corp. (AKS), two large U.S. steelmakers, reported significantly lower second quarter earnings due in part to increased competition from steel imports.
The price for North American hot rolled coil, a type of steel product used to make cars and house appliances, rose to $670 a short ton in February before falling to $600/ton or below as a result of the import influx, Lou Schorsch, the head of ArcelorMittal's flat carbon Americas division told Dow Jones Newswires in an interview.
The price drop led to lower import license applications which in turn emboldened steelmakers to push for price increases to between $620 a short ton to $640/ton. "I think we are in balance now, barring much more severe prices in world," Mr. Schorsch said.
"I think if you look at the fundamentals of the market, they're still relatively good and that price adjustment we just talked about means that the import pressure is not as significant as...two months ago," he noted. "We are seeing price increases that I think are sticking in North America, he added.
Mr. Schorsch said ArcelorMittal is operating at effectively full capacity in North America with 11 out of its 13 furnaces in operation. Two smaller furnaces in Indiana Harbor in East Chicago are unlikely to restart any time soon given their high restart costs, Mr. Schorsch said.
"Everything we can make, we're selling. We're pushing the facilities relatively hard," he said.
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