NEW YORK: Steel prices, driven to nosebleed highs by surging demand, should start to “erode” by the first part of next year as Covid-related supply bottlenecks ease and new domestic production comes online, said Mark Millett, the chief executive of the fourth-largest United States steelmaker, Steel Dynamics Inc.

       But the long-term health of the US industry depends on avoiding a surge of imports, which have driven the downside of past boom-and-bust cycles for steelmakers, he added.

       “We’re starting to see inventories rebuild a little and we’re starting to see import volumes pick up a little – so it would be natural to see pricing turn over” in the first part of 2022,” said Millett, who also chairs the Steel Manufacturers Association, the industry’s main trade voice in Washington.

       Demand for all types of metal plunged early in the pandemic but then recovered far faster and rose to higher levels than anyone expected. Now the focus is shifting to the Biden administration’s ambitious infrastructure plan, which would require large amounts of steel for construction projects and machinery, and create another boon for domestic producers, assuming the metal was purchased from domestic mills.

       Price pressures have fanned out through the economy in recent months, impacting everything from food to used cars, as a result of pandemic disruptions. Inflation data for September showed the annual consumer inflation rate ticking back up to its highest level since 2008, and the supply disruptions have prompted the White House to push the biggest US ports to operate around the clock to ease congestion.

       Millett said high steel prices shouldn’t hinder the government infrastructure plan. “Once an infrastructure bill passes, you don’t suddenly see trillion-dollar projects arrive on your doorstep,” he said. Instead, he predicts at least a year-long “ramp-up” period, which would allow the industry to overcome supply chain disruptions that have magnified shortages and added to pricing pressure.

       US producers Steel Dynamics and United States Steel are building new plants that will open over the next two years. ― Reuters