Under President Donald Trump, steel prices rose but have slumped back to pre-tariff levels
been elected, you would have no steel industry right now,” declared President Donald Trump last month. He claimed that his “massive” tariffs of 25% on steel imports, imposed in March last year, have returned the domestic industry to rude health. A year ago he would have been right, if habitually hyperbolic. A tonne of hot-rolled coil, an industry benchmark, which sold for roughly $600 in America at the start of 2018, fetched over $800 by the summer.
Today the boast looks out of date. Steel prices have slumped back to pre-tariff levels. Although the price of iron ore, from which a third of American steel is smelted, has tumbled in the past month, it remains roughly double what it was a year ago. Steelmakers’ profits collapsed. Nucor,Steel and Steel Dynamics, the country’s three biggest producers, all reported a steep fall in second-quarter earnings. The industry’s share prices languish a fifth below their level a year ago .
There may be nowhere for all the extra steel to go. Overseas, America’s high-cost producers cannot compete with cheap alloys from places like China. At home, last year’s uptick in volumes was caused chiefly by customers substituting domestic steel for suddenly pricier imports. Demand is now likely to grow at its underlying rate of 1-2% a year, estimates Andreas Bokkenheuser ofHigher prices may even be dampening it.
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