US steel industry
The US steel industry’s long wait ended last month after President Trump finalized tariffs on steel imports, acting on the Commerce Department’s Section 232 probe. President Trump imposed a flat tariff on 25% of all steel imports. Although the tariffs are slightly higher than what the Commerce Department suggested, Trump toned down the tariffs by offering exemptions to Canada and Mexico amid the pending NAFTA (North American Free Trade Agreement) renegotiation. Subsequently, Brazil, South Korea, Argentina, the European Union, and Australia have also been temporarily exempted.
The window for more exemptions, both for products and countries, is still open. The toned-down tariffs triggered a sell-off in steel names, and we saw selling pressure in steel stocks. AK Steel (AKS) and Cleveland-Cliffs (CLF) are down 20.5% and 4.6% year-to-date, respectively, based on April 2 closing prices. U.S. Steel Corporation (X) and Nucor (NUE) have respectively lost 0.5% and 4.5% over the period. The SPDR S&P Metals and Mining ETF (XME) is down 7.5% so far this year.
In this series, we’ll look at the recent steel industry indicators. We’ll see how steel demand and supply are shaping up in the United States as well as globally. Despite the Section 232 tariffs, the US steel industry isn’t totally immune to global developments.
Let’s begin by analyzing February’s steel imports data in the next part of this series.