SMU Data and Models

SMU Market Trends: Will You Continue to Buy Foreign Steel?

March 21, 2018

The market is waiting anxiously to see how the Trump administration’s Section 232 tariff will affect steel imports, and in turn steel prices. The 25 percent tariff takes effect on Friday. If Steel Market Update’s latest sample of reader opinion is any indication, the volume of imports into the United States may not moderate as much as many expect. More than eight out of 10 (83 percent) of import buyers responding to SMU’s market trends questionnaire this week say they will continue to buy foreign steel despite Trump’s tariff.

As many respondents commented, it’s a question of product availability and how much domestic mills dare to raise their prices:

“If the price and quality are right, we will purchase offshore. It depends on how greedy the domestic mills get with pricing.” Manufacturer/OEM
“As long as the price + tariff is cheaper long term than domestics, yes, we’ll buy import.” Service Center/Wholesaler
“Prices are so high in North America now that it will likely attract imports even if the tariffs must be paid.” Manufacturer/OEM
“The domestics are raising prices high enough that even at 25 percent it still might be advantageous to bring in imported steel.” Service Center/Wholesaler
“These ridiculous price levels will result in an increase in import activity over the coming weeks.” Service Center/Wholesaler
“Because of the reckless escalation domestically, the mills have shot themselves in the foot, potentially. There are foreign deals to be made even with the 25 percent tariff. It shouldn’t be that way.” Service Center/Wholesaler
“If the market continues to rise, the import numbers might not be much different than domestic.” Service Center/Wholesaler
“Lack of availability by U.S. producers will force us to buy import.” Manufacturer/OEM
“Specialty grades will still have to come from overseas.” Service Center/Wholesaler
“Where the material is not produced in the USA, we will have no choice.” Manufacturer/OEM
“We use .012 galv. There’s not a lot of options to purchase domestic.” Manufacturer/OEM
“It depends on whether the domestic mills have capacity available and want to run the ultra-light-gauge items.” Manufacturer/OEM
“We are now making new offers including steel tariffs. But we need to consider even higher tariffs as the Section 232 allows such changes at any time for any reason to protect national security.” Trading Company