Barclays analysts reiterated a constructive view on the U.S. steel sector this week, emphasizing tight domestic supply and resilient industrial demand as primary supports. Speaking at the SMU Steel Summit in Atlanta, the firm maintained buy recommendations for Nucor and Steel Dynamics following recent price corrections in the steel market.
Attendance at the annual summit exceeded 1,550 industry participants, including buyers, suppliers, and investors. Barclays highlighted that the primary concern among steel buyers is insufficient domestic availability rather than demand or pricing pressures. Industrial end markets showed broad strength, with the exception of construction, where activity remained concentrated in niche segments such as data centers, energy grid infrastructure, and border wall projects.
Steel prices have surged more than 50% over the past year, yet demand has remained intact due to the gradual nature of the increases, which minimized buyer resistance. The current spot price for hot-rolled coil stands at $1,200 per ton, while Barclays forecasts a price of $1,150 per ton for the same product.
A conference poll indicated mixed expectations for future prices, with 79% of attendees anticipating lower prices within a year. Of those, 36% projected prices between $1,000 and $1,099 per ton, 32% between $1,100 and $1,199 per ton, and 11% at $999 per ton or below. Conversely, 21% of respondents expected higher prices.
Trade tensions between the U.S. and Canada escalated on August 21, when Canada withdrew from negotiations and announced 50% retaliatory tariffs on approximately $20 billion worth of goods, including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. The measures are scheduled to take effect on September 8. Panelists at the summit described the escalation as detrimental to both countries, with potential implications for steel demand contingent on which sectors are most affected by the tariffs.
