Goldman Sachs Raises U.S. Steel Demand Outlook, Bullish on Apparent Consumption for 2026-2028

Overview

This report is Goldman Sachs' monthly tracking report on U.S. steel industry supply and demand (August 2026 edition). Based on the latest industry data through June 2026, it analyzes U.S. steel shipments, imports, exports, and apparent demand, and updates Goldman's supply-demand model forecasts. The core conclusion is that June data demonstrates resilience in U.S. steel demand, leading Goldman to raise its apparent demand forecasts for 2026-2028 and express a more optimistic view regarding demand exceeding expectations over the next 2-3 years.

Core views

U.S. steel shipments and apparent demand showed a strong rebound in June. Domestic finished product shipments rose +8.7% YoY to 8.5 million tons in June, up +4.9% MoM from 8.11 million tons in May; year-to-date shipments were +5.3% YoY, further above May levels. Apparent demand rose +2.7% MoM and +4.5% YoY in June, with the YTD YoY gap narrowing to -0.3%. Using seasonally adjusted implied annual apparent demand metrics, Goldman estimates 2026 apparent demand rose to 102.6 million tons (+1.4 million tons MoM), higher than 102.1 million tons in 2025. This rebound occurred against a backdrop of high capacity utilization rates, where domestic mill shipments largely offset the decline in imports. Imports showed divergence. Finished imports fell approximately 12% YoY in June, with flat and long products declining by 12.4% and 17.7% respectively; flats continued to be suppressed by tariffs, while longs reversed after several months of YoY growth; YTD finished imports were down 24.4% YoY. However, by product, tubular imports remained up +2% YoY. Goldman believes the TTM import decline may have bottomed out, and future Asian imports will increase due to widening price spreads. Based on new data, Goldman updated its supply-demand model, raising apparent demand forecasts across the board. Apparent demand forecasts for 2026/2027/2028 were raised by 0.33/0.64/0.49 million tons, with shipments raised by 0.06/0.23/0.22 million tons, finished imports raised by 0.94/0.98/0.70 million tons, and exports raised by 0.68/0.57/0.43 million tons (increased exports partially offset the positive contribution of imports to apparent demand). The 2026 apparent demand forecast was slightly raised to 104.7 million tons (previously 104.5 million tons). Demand shows signs of broad-based "green shoots." Goldman listed multiple demand drivers: manufacturing reshoring, power and energy demand, automotive demand returning to the U.S., steel procurement shifting to the U.S., highway and bridge funding support, aerospace and defense, data centers and semiconductors, and one-off projects like border walls. Goldman also emphasized that U.S. steel inventories are extremely tight; even if demand softens marginally, domestic mill shipments may remain at high levels for a longer period. These judgments are supported by positive commentary from covered mills, which generally reported strong demand and order backlogs extending into 2027. Macro leading indicators also support the bullish view. The Dodge Momentum Index is at a 20-year high, signaling a large volume of planned projects coming online in the next 12-18 months, potentially bringing significant demand increments; the U.S. ISM PMI is at multi-year highs and remains in expansion territory; Goldman Sachs Global Economics (GSe) industrial production forecasts remain bullish, and there is a strong historical correlation between industrial production and steel demand. Goldman believes these factors collectively support steel demand exceeding expectations over the next 2-3 years. Regarding imports and price spreads, Goldman assesses U.S. HRC prices at approximately $1,180/ton, about $190/ton higher than estimated Asian CIF import costs. This spread is at the 76th percentile of the past ~5 years, indicating an elevated position. Goldman believes the U.S. and Europe are at import parity, while Canada remains below import parity. This means that as long as U.S. HRC prices maintain current levels, there is continued momentum for Asian imports, while imports from other sources remain relatively flat. Therefore, Goldman raised its finished import forecasts. By region, Asian imports are expected to continue rising in Q3 2026, potentially peaking in July-August before falling in September; American imports will decline significantly due to rising Canadian prices, expected to fall further in Q3; European imports will remain roughly flat in Q3 due to parity levels, with seasonal declines in Q4. Regarding market share, impacted by Section 232 steel tariffs, the market share of Goldman-covered mills rose from 54.3% in Q4 2024 to 57.5% in Q2 2026, a cumulative increase of 3.2 percentage points. Goldman expects this trend to continue, with NUE's new mill capacity ramp-up in West Virginia (WV) further driving covered companies to capture import share.

Analysis framework

Goldman Sachs employs an analytical framework of 'Data Verification — Model Revision — Forward-Looking Judgment.' First, starting with monthly industry data (shipments, imports, exports, capacity utilization), it calculates apparent demand and observes YoY, MoM, and YTD changes; second, it incorporates new data into its proprietary supply-demand balance model to iteratively revise forecasts for 2026-2028 shipments, imports, exports, and apparent demand; finally, combining demand leading indicators (Dodge Momentum Index, ISM PMI, Industrial Production forecasts), inventory conditions, and trade price spreads, it makes directional judgments on the demand outlook. In assessing demand, Goldman looks at both short-term marginal improvements in monthly data and mid-to-long-term structural drivers—such as manufacturing reshoring, emerging industry demands like energy and data centers, and policy financial support. On the supply side, Goldman judges market tightness and the direction of marginal import changes by comparing capacity utilization with its 5-year average and analyzing import parity. This叠加 ('stacking') of 'monthly high-frequency data + mid-term leading indicators + structural trends' constitutes the core logic for its expectation of demand exceeding expectations over the next 2-3 years.

Methodology notes

• Industry/Industrial Analysis FrameworkSupply-demand framework

  Using steel industry supply (capacity, capacity utilization, imports) and demand (shipments, apparent demand) as core analytical dimensions

  Steel is a cyclical industry where the core drivers of price and profit are supply-demand balances. Goldman deduces apparent demand and market tightness by tracking shipments, imports, exports, and capacity utilization, which is a basic method for judging industry cycle inflection points.

• Industry/Industrial Analysis FrameworkVolume-price decomposition

  Decomposing demand changes into volume dimensions such as shipments, imports, and exports, rather than directly analyzing price

  This report focuses on physical volumes (tons) rather than price, reconstructing true demand through volume changes. Apparent demand = Domestic Shipments + Imports - Exports; this identity is the foundation of Goldman's model and helps distinguish between demand improvement and inventory changes.

• Cycle and Prosperity FrameworkProsperity Inflection Point Analysis

  Judging steel demand prosperity inflection points through leading indicators (Dodge Momentum Index, ISM PMI, Industrial Production forecasts)

  Goldman uses leading indicators such as construction planning indices, manufacturing PMIs, and industrial production forecasts to prospectively analyze steel demand. These indicators have historical correlations with steel demand and lead actual shipment changes, making them common methods for judging demand directions over the next 2-3 years.

• Industry/Industrial Analysis FrameworkCost curve analysis

  Judging marginal changes in imports through the price spread between U.S. HRC prices and landed import costs from different regions

  Whether imports increase depends on the price spread between U.S. domestic prices and overseas landed costs. Goldman analyzed that U.S. HRC prices are approx. $190/ton higher than Asian landed costs (at the 76th percentile historically), implying momentum for increased Asian imports, while parity with Europe and below-parity with Canada imply relatively flat imports from these regions. This is a common price analysis method for judging marginal import changes.

• Company Fundamentals and Financial Framework

  Comparing capacity utilization with historical averages as a proxy indicator for mill profit margins

  Goldman pointed out that although capacity utilization dropped to 80.6% in June, it remains above the 5-year historical average of 77.5%, and believes this will continue to support mill profit margins. Capacity utilization is a key indicator for judging profitability in the steel industry; higher utilization typically implies stronger pricing power for mills.

• Event Gaming and Behavioral FinanceEvent-driven analysis

  Using the Section 232 steel tariff policy event as a clue to analyze its impact on import structure and domestic mill market share

  Tariff policies alter import cost curves, providing competitive protection for domestic mills. Goldman tracked that the market share of covered companies rose from 54.3% to 57.5% due to tariffs and judged that this policy effect will continue, representing typical policy event-driven analysis.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Nucor (NUE)

  Goldman expects its West Virginia new plant capacity ramp-up to drive covered companies to continue capturing import share, making it one of the main beneficiaries of market share gains

  Strengths

  New capacity ramp-up brings incremental shipments; benefits from market share gains under Section 232 tariff protection; tight domestic demand supports profit margins

Key data

• June Domestic Finished Product Shipments8.5 million tons+8.7% YoY, +4.9% MoM vs May; YTD +5.3%
• June Apparent Demand+4.5% YoY (+2.7% MoM)YTD YoY gap narrowed to -0.3%
• Implied 2026 Apparent Demand102.6 million tons+1.4 million tons MoM; higher than 102.1 million tons in 2025
• 2026 Apparent Demand Forecast104.7 million tonsRaised by 0.2 million tons from previous 104.5 million tons
• Apparent Demand Forecast Increase for 2026-2028+0.33/+0.64/+0.49 million tonsDriven jointly by adjustments in shipment, import, and export forecasts
• June Finished Imports YoY~ -12%YTD -24.4%; Flats -12.4%, Longs -17.7%, Tubular +2%
• June Capacity Utilization80.6%Higher than 5-year historical average of 77.5%; June production +14.1% YoY
• U.S. HRC Price~$1,180/tonApprox. $190/ton higher than Asian CIF import costs; spread at 76th percentile of 5-year history
• Covered Companies Market Share57.5% (Q2 2026)Increased by 3.2 percentage points from 54.3% in Q4 2024, driven by Section 232 tariffs

Impact & implications

Goldman believes that with capacity utilization remaining high and inventories extremely tight, U.S. domestic mills will continue to enjoy strong support for shipments and profit margins. Signs of broad-based demand combined with comprehensively positive leading indicators suggest that steel demand is likely to exceed expectations over the next 2-3 years, which has a positive impact on the U.S. steel companies covered by Goldman. From a market share perspective, the protective effect of Section 232 tariffs will continue, and Goldman-covered mills are expected to continue capturing share from imports, especially as NUE's West Virginia new plant capacity ramp-up becomes the main incremental source. From an import structure perspective, the widening price spread between the U.S. and Asia implies room for marginal increases in Asian imports, but Goldman believes the magnitude of import increases will be limited, and the overall market will remain relatively tight, supporting domestic prices and mill profits.

Risks

• If U.S. HRC prices rise further, it may trigger more Asian imports, partially offsetting the market share growth of domestic mills
• If actual demand softens marginally, the supply rebound brought by high price spreads and increased imports may shift the market from tight to loose

What to watch

• Whether Asian imports rise as expected in Q3 and peak in July-August before falling
• Changes in the price spread between U.S. HRC prices and Asian landed costs, and their impact on import momentum
• Progress of NUE's West Virginia new plant capacity ramp-up and its contribution to market share
• Changes in the Dodge Momentum Index, ISM PMI, and industrial production data to validate the judgment of demand exceeding expectations