Final Thoughts

I have noticed many articles in the mainline press over the past few days slamming the Trump administration’s Section 232 tariffs as not helping the steel industry. Most of the articles point to the recent loss announced by U.S. Steel as proof, along with minimal to no job gains in the industry. I don’t think those writing the articles have spent much time looking at the investments announced by multiple mills, including U.S. Steel, and the impact this new capacity will have on the future competitiveness of the industry. Sure, there will be pain to come for those mills that are unable or unwilling to make investments in their future with new equipment. There will be older mills needing to close in order to make way for the new mills being built. The tariffs, along with antidumping and countervailing duties, have limited imports and allowed the steel mills some breathing room. Where the industry goes from here will depend on demand, both here and in the rest of the world.

In case you missed it, I have raised our Price Momentum Indicator on all flat rolled products from Neutral to Higher. This means SMU anticipates prices on hot rolled, cold rolled, galvanized and Galvalume to move higher over the next 30 days. The market is still in transition, and we did see some weakness in cold rolled and galvanized based on the information gathered from our survey so far this week. However, I do not believe the low numbers provided are still available in the market and may be more reflective of last week’s pricing. We will continue to work on better understanding steel prices as the rest of the week plays out.