Trade Cases
Letter to the Editor: Trader Sees Damage to Mills from Section 232
Written by Tim Triplett
September 4, 2019
Steel Market Update received the following letter from a trading company executive and we thought it should be shared with our readers:
I was just reading your article concerning Section 232 and came up with the following short conclusions:
The damage of Section 232 to the integrated mills is done. The windfall profit reaped by the mills in 2018 has been reinvested by Nucor, SDI, Big River and North Star Bluescope in new modern capacity, thereby expediting the demise of old inefficient facilities. The restart of already shuttered older mills only added to the problem.
If the purpose of Section 232 was truly for national security reasons to keep a financially healthy steel industry, then the jury is still out on the success of the program. Yes, more modern production will come on stream in the U.S. (and North America), and that is a good thing. Nevertheless, steel mills die hard, and Nucor, SDI, et al, will have to be patient to reap the benefits of their quick action as they will have to endure the steel downturn that is more than likely coming as inefficient excess capacity will need to be taken out of the market (again). As for the integrated mills, Section 232 did not do them any favors that I can see.
I really doubt that import levels will change much going forward, regardless of what happens with Section 232, or even the dumping suits that will likely follow.
Trading Company Executive
(name withheld on request)
You are welcome to comment. To do so send your comments to info@SteelMarketUpdate.com
Tim Triplett
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