The chief executive of integrated steelmaker Cleveland-Cliffs does not see production cuts in the US flat-rolled market on the horizon even as prices sit at half their levels of the start of the year.
Chief executive Lourenco Goncalves told Argus at a major industry conference Monday that Cliffs and rival Nucor are "both behaving extremely well" when it came to how much steel they are supplying into the US market, which many flat-rolled participants believe is oversupplied.
"This being said, we can't deny that prices have deteriorated," Goncalves said. "And when we say value over volume, we're not saying we're going to walk away from orders — nobody does that. We're just trying to preserve the value."
Some flat-rolled steel market participants have voiced frustration that none of the steelmakers announced the idling of steel mills during their second quarter earnings calls in July, actions that are typically taken by integrated steelmakers as prices fall.
Since mid-April when the Argus weekly domestic US hot-rolled coil (HRC) Midwest and southern ex-works assessments peaked at $1,500/short ton (st), prices have fallen by 46pc to $812.25/st. HRC prices are down by 49pc since the beginning of the year and have plunged by 59pc since the September 2021 peak of $1,970/st.
"It's not like anyone will shut down, die on the sword on behalf of the industry — that thing does not exist," Goncalves said about potential production cuts. "And we have a cost structure that we don't need to do that, let's face it. And others feel like they are in the same spot. At the end, the most competent ones will always survive."
US steel production rose marginally last week with gains across all regions except the Great Lakes, with overall output up by 14,000 st to 1.756mn st for the week ended 20 August from the week prior, while the utilization rate rose to 79.7pc from 79pc, according to data from the American Iron and Steel Institute (AISI).
