President Trump’s tariffs
Earlier this year, President Trump imposed Section 232 tariffs on US steel and aluminum imports. September marks the sixth month since tariffs came into effect. The tariffs have helped lift US steel production and curb imports. On a year-to-date basis, US steel imports have fallen 10.3% year-over-year in the first seven months of 2018. Steel imports from China have also fallen. In the first six months of 2018, China exported 0.34 million metric tons of steel to the US, which is ~2.1% of the total US steel imports during this period. US steel and iron ore producers like U.S. Steel (X), AK Steel (AKS), Nucor (NUE), and Cleveland-Cliffs (CLF) benefit from lower steel imports.
Chinese steel exports
Notably, the Section 232 tariffs have raised concerns in several countries, as they expect deflection of imports after tariffs in the United States (DIA). However, Chinese steel exports have continued their downtrend this year. In August, China exported 5.8 million tons of steel products, a yearly fall of 9.8%. In the first eight months of 2018, Chinese steel exports have fallen 13.3% to 47.2 million metric tons.
China’s supply-side reforms that are curtailing some of the polluting industrial units have helped Chinese steel prices. Chinese reinforcing bar prices recently hit a seven-year high, but prices have fallen somewhat from those levels. However, there are concerns about Chinese steel demand amid the country’s trade spat with the United States.
In the next article, we’ll look at China’s August aluminum exports.