Improving construction demand would be pushing up steel prices if China weren't distorting the market, a study found.
The U.S. construction market has been slowly recovering, which would normally drive up prices for steel studs and
wallboard, Thompson Research Group Chief Executive Officer Kathryn Thompson said in a forecast for the Steel Framing Industry Association. But the slowdown in China's economy has led Chinese steelmakers to flood the world with cheap steel, suppressing prices.
"A glut of steel from China and subtle changes in types of buildings are temporarily keeping a lid on price rises," Thompson said.
"The good news for 2016 is that the outlook for construction volumes continues to be positive. The federal anti-dumping legislation and continued calibration of production volumes by domestic mills will ensure that the steel markets remain as healthy as possible in the current environment."
New construction is expected to grow by 7 percent to 10 percent, with multifamily housing driving much of the demand.
Cold-formed steel volumes are up, and architects are expected to remain busy for the next year or two.
"The primary risk here is introduced by the global markets," Thompson said. "It's a year for vigilance. One where growth, while not explosive, will improve at a steady pace."
Public construction has been lackluster but could pick up by the end of the year if Congress finally passes a federal transportation bill.
"For the nimble and informed, 2016 is a year of opportunity," Steel Framing Industry Association Executive Director Larry Williams said.
"The prospects of real growth in the coming year presents to all those who manufacture, distribute and install steel framing with the best opportunity in nearly a decade to increase the use of our products."