As steel mills keep supplies tight in the face of increasing demand, steel prices look to remain high into 2021, write John Packard and Timothy Triplett of Steel Market Update.

With more sidelined steelmaking capacity returning to action and new capacity opening up in 2021, steel mills might find that supply might outstrip demand for steel in the coming year. That's good news for metal fabricators.

Steel prices jumped in early September, but many steel buyers question if they’ll remain where they are. Meanwhile, steel buyers do seem optimistic about business as 2020 comes to an end.

Steel producers and distributors are coming to grips with the fact that manufacturers that consume their steel products are not going to bounce back to full strength anytime soon.

In the spring a large majority of steel buyers at service centers and manufacturing companies thought business would return to pre-COVID-19 levels by the end of summer. That optimism has faded a bit as the number of COVID-19 cases continue to grow.

Even in the midst of the COVID-19 pandemic, steel service centers indicate that they are optimistic about increased demand from the manufacturing base. They are also keeping an eye on how quickly steel mills fire up operations again, which could lead to an oversupply in the market.

Steel demand is down, but steelmaking capacity continues to grow in the U.S. during the COVID-19 pandemic. That seems to be a recipe for disaster for steel companies. But it could mean downward pressure on prices, which is good news for metal fabricators.

The steel market is growing softer by the day, but it’s not as bad as it was during the Great Recession. In fact, the rebound from this COVID-19-induced downturn might be pretty dramatic.

COVID-19 has wrecked the economies across the world. Manufacturers are waiting to see if, and as a result, steel prices remain stable—for the time being.

After a rough 2019, steel mills appear emboldened in the new year. Price hikes have stuck, and they are pushing forward with plans to add more steelmaking capacity.

Recently announced price hikes from mills resulted in an increase in steel prices toward the close of 2019. Some buyers, however, wonder if market economics will support those increases.

Mills announced an $80/ton price hike in late October and early November. Will they be able to collect that increase? It doesn’t look promising.

Demand is down. Scrap prices are down. The business environment is uncertain. U.S. steel mills can’t do much but watch prices continue to fall.

Steel prices continue to creep higher, but a majority of steel buyers surveyed by Steel Market Update believe the prices will drop in the fourth quarter.