SMU Data and Models
SMU Respondents: Don’t Count Out Section 232
Written by Tim Triplett
August 19, 2017
Despite the ongoing delay in Washington, six of 10 respondents to SMU’s latest flat roll market trends questionnaire believe the Trump administration will eventually put new restrictions on foreign steel imports based on Section 232 national security concerns. Even more, 74 percent, believe the slowdown in the Section 232 decision is opening the door to more foreign steel.
“We have seen a steady increase in import offers over the past two weeks,” commented one service center executive. “The day it was announced that Trump was putting Section 232 on the backburner, two or three traders contacted me for orders arriving in the fourth quarter,” said another wholesaler. “Section 232 will take some time to put into effect. I believe the imports will continue to flow,” said a manufacturer. “I already see more interest from mills and buyers, but foreign prices are on the increase so there are no great deals right now. When the domestics go up, then it will allow an easier decision,” commented a trader. [Editor’s note: Major mills announced $30 price hikes on flat roll and plate this week.]
Other respondents doubt an import surge. “Since the 232 investigation is active, we hope that imports will be restrained,” said an executive from a domestic steel mill. “Higher global prices may stymie imports rather than concerns with 232,” said a trader. “Trump is unpredictable, so nobody wants to get caught. The threat of making a decision is as powerful as actually making one,” observed a service center exec.
Tim Triplett
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