The global steel industry never fully recovered from the global financial crisis in 2009. During the sell-off in 2015, while other metals like copper and aluminum managed to maintain their 2009 lows, steel and steelmaking raw materials had the infamous distinction of falling below their 2009 lows. Most metals are facing a similar issue—an overhang of excess capacity. Notably, while there’s excess capacity in other metals, steel deserves a special mention. The sector supports a large number of jobs. As a result, governments around the world have to protect their domestic steel industries.
The US has also taken measures to protect its steel industry (NUE) (XME). Last year, acting on complaints from steel companies like U.S. Steel Corporation (X), AK Steel (AKS), and ArcelorMittal (MT), the U.S. Department of Commerce imposed duties on flat-rolled steel products from countries including China and South Korea. Taking the fight against imports to another level, the Trump Administration ordered a probe under Section 232 of the Trade Expansion Act of 1962 to see whether steel imports threaten US national security.
Could there be a US solution to the steel industry’s woes? We’ll explore this aspect in detail throughout the series.