SMU Data and Models
Will the New NAFTA Be Good for Your Business?
Written by Tim Triplett
October 8, 2017
Steel buyers and sellers appear evenly split on whether the renegotiation of NAFTA will benefit their companies. Responses to Steel Market Update’s market trends questionnaire, emailed to several hundred steel executives earlier this week, suggests that most companies don’t really know if the new NAFTA being pursued by the Trump administration will be good for their businesses.
More of their comments were negative than positive, however:
· “Some of my final customers supply to Mexican manufacturing, which comes back to the U.S. They are very concerned about NAFTA as they feel any change will be negative for their business.” Trading Company
· “If it means higher steel prices, that will be bad for our business because we are competing against similar products made of other materials.” Manufacturer/OEM
· “Unintended consequences will occur if NAFTA is changed.” Manufacturer/OEM
On a more positive note, one service center executive said, “Ross Perot nailed it! And in a decade Mexico built a middle class. Unfortunately, it was a big chunk of ours.” Said another service center, “It should hopefully lead to more manufacturing in the U.S.” Agreed a manufacturer, “but only if Canadian steel products are taxed coming into the U.S.”
Several expressed doubts about the ability of the Trump administration and its trade negotiators:
· “I see it as a non-event, given the current government’s ineffectiveness in moving any initiatives.” Service Center/Wholesaler
· “NAFTA seems to neither hurt nor help us, and I lack confidence in the current administration.” Manufacturer/OEM
· “Nothing the U.S. government has done is good for our business. We all drank the Kool-Aid and we all look stupid.” Service Center/Wholesaler
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
Service centers: Mill orders recover in June
SMU’s Mill Order Index (MOI) rebounded in June after declining for three straight months. The gain complemented a modest boost in service center shipments for the month, according to our latest service center inventories data.
Apparent steel supply remained high in May
The volume of finished steel entering the US market remained elevated in May, in line with April figures, according to SMU’s analysis of Department of Commerce and American Iron and Steel Institute (AISI) data
June service center shipments and inventories report
Flat rolled = 55.8 shipping days of supply Plate = 59.4 shipping days of supply Flat rolled US service centers’ flat-rolled steel supply edged down in June with a modest boost to shipments month on month (m/m). At the end of June, US service centers carried 55.8 shipping days of flat roll supply, down from […]
SMU Scrap Survey: Sentiment Indices rise
Both current and future scrap sentiment jumped this month, though survey participants reported responses before key trade news was announced.
SMU Survey: Sentiment splits, buyers have better view of future than the present
SMU’s Steel Buyers’ Sentiment Indices moved in opposite directions this week. After rebounding from a near five-year low in late June, Current Sentiment slipped again. At the same time, Future Sentiment climbed to a four-month high. Both indices continue to show optimism among buyers about their company’s chances for success, but suggest there is less confidence in that optimism than earlier in the year.