The first back-to-back good years since 1988-1989. That is what the U.S. steel industry turned in based on its performance in 1995. Raw-steel output, shipments, exports and, most importantly, steel earnings were all higher than in 1994. This when shipments had reached their best level in 15 years. However, while steel demand gathered strength throughout 1994, two distinctly different steel markets evolved m 1995. And, at year's end, there was some reason to be apprehensive about the slowing U.S. economy and its possible consequences for 1996 steel demand. In first half 1995, an extended wave of strong domestic demand and sustained, high operating-rates combined with favorable steel prices to drive a further improvement in steel-company earnings. However, as midyear approached, pricing leverage in the spot market for a number of steel products started to shift in favor of buyers. This signaled a transition to a weaker domestic market that prevailed throughout the second-half. To maintain production, steel-makers used their competitiveness to aggressively boost export sales. Unfortunately, price realizations on exports were even less favorable than declining domestic spot prices. This cut into profit margins in both the third and fourth quarters.
展开▼
