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

SMU Survey: Buyers’ Sentiment tumbles as caution increases
SMU’s Buyers’ Sentiment Indices resumed their downward trend this week, erasing the modest recovery seen two weeks ago.

Service centers: Mill orders down further in April
SMU’s Mill Order Index (MOI) declined for a second straight month in April after repeated gains at the start of the year, according to our latest service center inventories data.

SMU Survey: Mill lead times edge lower
Sheet and plate lead times declined across the board this week, according to buyers responding to the latest SMU market survey. While our lead time ranges were unchanged compared to mid-April levels, average production times for each steel product we measure have declined from they were two weeks ago.

SMU Survey: Most buyers say price negotiations back on the table
Domestic mills are largely negotiable on spot prices, according to the majority of steel buyers responding to our latest market survey.

SMU Scrap Survey: Current, Future Sentiment Indices log declines
However, in a month plagued by tariff and economic uncertainty, both current and near-term outlooks for our scrap survey respondents remained surprisingly optimistic.