Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

A new report by Moody’s has revised the steel industry’s outlook from negative to stable on strengthening demand and the resumption of production in adjacent industries.


The research agency’s report, released Oct 7, cited the associated industries’ return to output following the COVID-19-related lockdowns and strong Chinese demand as a couple of reasons for the surge. According to Carol Cowan, senior vice president at Moody’s, the agency expects operating conditions for steelmakers to continue improving for the next 12-18 months.


However, capacity utilization remains a concern—the report noted that the steel industry is well below pre-pandemic levels because some regions and sectors are recovering slower than others.


Surging COVID-19 infections are a variable that could once again adversely affect the steel industry, Cowan pointed out. She added that the purchasing managers’ indexes in the three key steelmaking regions—the US, EU, and China—were trending well over the 50-point mark, signifying economic expansion, which is a key indicator as to which direction the steel industry will go.


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