Economy

CRU: Steel Tariffs Shift U.S. PC Strand Buyers’ Focus Abroad
Written by Tim Triplett
February 7, 2019
By CRU North America Steel Analyst Ryan McKinley
Since Section 232 tariffs have come into force, U.S. wire rod prices have increased more than other markets. As a result, domestic PC strand (prestressed concrete steel strand) producers have seen costs increase, inviting more competition from abroad.
Higher Prices Affecting Competitiveness
Rising U.S. domestic wire rod prices have increased input costs for PC strand producers. Unlike wire rod, PC strand is not subject to duties under Section 232, leading to an increase in imports as manufacturers from outside the U.S. start to gain a competitive edge. The increase in PC strand imports has correlated strongly with gains in U.S. domestic wire rod prices as domestic manufacturers have no option but to pay a higher cost for their key feedstock, wire rod. Wire rod prices in the U.S. are now trading at a more than four-fold premium to other markets relative to January 2018 (see chart below).
Trade Action has Influenced Buyers Further Down the Supply Chain
Trade action on wire rod appears to be the cause of an increase in PC strand imports, and there are two examples of this since 2017. The first spike in imports came shortly after the anti-dumping investigation of wire rod imports against 10 countries was launched by the U.S. Department of Commerce in April 2017 (see chart). The Section 232 announcement precipitated the second surge, with imports nearly doubling between January and October 2018 (the latest available data). Indeed, the July 2018 peak was the highest level seen in a decade.
What’s Next?
Barring government intervention that specifically targets PC strand, we expect the short-term correlation between a higher U.S. premium on wire rod and increased PC strand imports to persist. Still, this premium may start to erode as downstream steel buyers in the U.S. increasingly seek lower-priced alternatives abroad, weighing on demand for domestically produced wire rod.

Tim Triplett
Read more from Tim TriplettLatest in Economy

Second steel derivatives S232 inclusion window opens, business community voices concern
The US Department of Commerce announced that its second window for submitting applications for the inclusion of derivative steel and aluminum products in Section 232 tariffs is now open, according to the US Federal Register. September’s Inclusion Window Sept. 15 through Sept. 29, applicants can email requests for inclusions to the Defense Industrial Base Programs. The first […]

Steel Summit: ITR economist urges execs to prepare for growth, not recession
If the steel industry professionals who made it to the very final presentation of this year’s SMU Steel Summit were expecting another round of cautious forecasting, they were in for a surprise. Because what they got was a wake-up call.

ISM: Manufacturing growth remained down in August
US manufacturing activity remained muted in August despite a marginal gain from July's recent low, according to supply executives contributing to the Institute for Supply Management (ISM)’s latest report.

Steel Summit: Dr. Basu blames tariffs for riskier path ahead
Steel executives packed the main conference hall of the 2025 SMU Steel Summit on Tuesday, Aug. 26, to hear economist Dr. Anirban Basu lay out his blunt view of tariffs, inflation, and demand.

Steel Summit: Schneider sees SDI ‘on the edge of a very good run’
Steel Dynamics Inc. (SDI) President and Chief Operating Officer, Barry Schneider, remains bullish about the Fort Wayne, Ind.-based steelmaker’s position in the current market.