In the surest sign yet of a downturn in North American steel demand, Cliffs Natural Resources (formerly Cleveland Cliffs) stopped three iron ore pellet furnaces at two of the company’s six North American iron ore mines. The three furnaces at Northshore and United Taconite have a production capacity of 300,000 tons so they are the smaller furnaces in Cliffs facilities. But for demand to have dropped off so quickly and steel mills to have cut back on demand so quickly underlines the extent to which consumer demand has dropped off since the early summer. The steel majors have been very clear that they will idle production capacity to keep the market in demand/supply balance rather than cut prices. Although we can expect to see steel prices soften in Q4 and Q1 2009, a wholesale collapse as we have seen in base metals is unlikely. MetalMiner will continue to report on the availability and price trends in the steel market as we go forward and welcomes contributions from distributors and consumers with advice on what they are seeing on the ground.
Contributions will be treated in confidence and can either be made by the comments section or direct to sburns[at]aptiumglobal[dot]com. Interesting times!