State of the Union address
Donald Trump’s State of the Union address is scheduled for January 30. In this article, we’ll look at what US steelmakers might watch for in the address.
Reviving US infrastructure was a key part of Trump’s platform. Although we haven’t seen any concrete progress on that front so far, with the passage of the tax bill, we could see the Trump administration take steps towards infrastructure investment. Infrastructure investment boosts demand for materials such as steel (CLF), cement, and copper. According to Nucor (NUE), Trump’s proposed trillion-dollar infrastructure investment plan could generate an annual incremental demand of 5 million tons of steel (MT) over the next ten years.
Trump has frequently spoken in favor of protecting the US manufacturing sector from the onslaught of imports from countries such as China. Earlier this month, Trump imposed duties on imports of solar panels and washing machines. Last year, the Trump administration initiated a probe into aluminum sheet imports from China.
Last year, the Commerce Department initiated an inquiry under Section 232 of the Trade Expansion Act of 1962 to determine whether steel imports threaten US national security. The report’s findings are now with Trump. While he may not talk directly about the Section 232 probe during his State of the Union address, steel companies will look for clues on his administration’s trade policies. It’s worth noting that potential action against steel imports could be a key driver for US steel companies in 2018.
Along with the State of the Union address, a flurry of earnings releases from companies such as U.S. Steel Corporation (X) and AK Steel (AKS) should keep steel investors on their toes this week. In the next article, we’ll see what analysts are projecting for these companies’ 4Q17 earnings.