Analysts see strong second half Despite predictions of further interest-rate hikes and a slight slowing of automotive production, analysts speaking at the Steel Tube Institute conference March 23rd in West Palm Beach, Fla., presented a bullish forecast for the rest of 2000. North American vehicle production for 2000 will total 16.5-17 million units, down from 17.6 million in 1999, McDonald estimates. Nonresidential construction has been slowed by higher interest rates. But in general, the U.S. economy continues to expand at a rapid pace, with only modest inflationary pressure. Declines in automotive and construction markets will be partly offset by a recovery in oil-patch activity, analysts said.
Current demand appears to support continued growth in domestic steel prices.
The strength of foreign markets has taken some pressure off the domestic steel industry, notably in the stainless market. The steel industry is still struggling to attract investment dollars. Domestic integrated mills haven't earned their cost of capital for decades. There are more players now than there were five years ago. Global consolidation will be hampered by many legal, social, logistical, environmental, and economic impediments, he said.