Final Thoughts

Final thoughts

Written by Ethan Bernard


They say all’s fair in love and war. But that doesn’t seem to be the case in steel. Being deemed “unfair” could get you slapped with shiny new Section 232 tariffs these days. Then again, “unfair” implies a judge. And people on opposing sides seldom agree with the judgment. Such seems to be the current case between the US and Mexico.

Sen. Sherrod Brown (D-Ohio) said in a press release on March 15 that “unfair imports keep coming” from Mexico. Legislation was introduced to Congress last month, the “Stop Mexico’s Steel Surge Act.” Whoever decided to name this one decided to get right to the point.

In an SMU Community Chat in March, Barry Zekelman, executive chairman and CEO of Zekelman Industries, weighed in on the issue.

“Adhere to the deal you signed onto, and we’ll be fine,” he said at the time, regarding the USMCA pact, which removed the tariffs on Mexico in 2019.

“But until then, I’m going to fight like a honey badger,” he added.

Unsurprisingly, the Mexican steel industry and trade associations see things differently.

Steel trade group Canacero disputed the characterization of a “surge” back in December.

I was recently at an event in Houston, and a lot of the conversation there centered around whether that introduced legislation would lead to action, or if it was election-year bluster.

Some seem to think tariffs could be imminent, while others think a resolution will be reached and the status quo will prevail.

Actually, there are quite a few topics of importance to the steel industry that are still up in the air.

Another is AHMSA. On Friday, SMU’s Laura Miller reported on an update given by the Mexican steelmaker on its timeline for a restart. (It’s been shuttered since December 2022). We’ve heard it before. Those in the market waiting for a definite, set-in-stone timeline will have to wait a little bit longer.

What about Evraz North America? Crickets seem to be the order of the day on the sale of the steelmaker’s assets in the US and Canada. (Evraz NA has been for sale since August 2022.)

Finally, the sale of U.S. Steel to Nippon. We’ve seen it swing from a foregone conclusion that only needed to be rubber-stamped, to many doubting it will be approved at all. And that’s all in the space of four months.

For the US-Mexico situation, if something concrete does materialize soon, will Mexico retaliate, as they have warned? What will it mean for the nearshoring trend in which North America is viewed as a single “neighborhood”?

More broadly, could this lead to a cascade effect with nations rolling up the drawbridge to imports? Whatever happens, the domestic steel industry has proved pretty nimble in reacting to pandemics, wars, and shifting domestic politics. We’ll see if this year might just put those skills to the test.

Ethan Bernard

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Final thoughts

What's the tea in the steel industry this week? Here's the latest SMU gossip column! Just kidding... kind of. Yes, some of the comments we receive in our weekly flat-rolled market steel buyers' survey are honestly too much to put into print. Some make us laugh. Some make us cringe. Some are cryptic. Most are serious. We appreciate them all. Below are some highlights from our survey results this week. Some of the comments that we can share with you are also included, in italics, in the buyers' own words, with minimal editing on our part.