Millett sees tariffs, CORE case benefiting SDI

He also said that preliminary anti-dumping margins from the coated flat-rolled steel, or CORE, case “is going to be very impactful.”

Recall that earlier this month, the US Commerce Department released preliminary anti-dumping margins in a trade case targeting imports of from 10 countries. Further information and a timeline can be found here.

Millett pointed out that the case includes “about 3 – 4 million tons of dumped coated steels, and that will be very beneficial to us.”

EVP and CFO Theresa Wagler agreed. She said on the call that  the CORE case “can’t be under-discussed as far as the positive impact.”

“And since we’re the largest coater of automotive flat-rolled steel in North America, it’s specifically impactful to us in a very positive way,” she added.

‘Derivative products’

Further downstream, Millett said tariff action on “derivative products actions are extremely beneficial.”

“There are, I think, some 2 million to 3 million tons of fabricated structural steel items coming through onto our shores. And that’s an appreciable volume,” commented Millett. “That market is probably somewhere between 6 million to 8 million tons, and suppressing that will have a major, major impact for our long products platform.”

Zooming out for the big picture, Millet said the “tariffs on supply chains are already providing, I think, a positive momentum from a reshoring standpoint.”

Scrap/raw materials

Millett said SDI, an EAF steelmaker, hasn’t seen scrap flows affected yet by the tariffs.

“Relative to raw materials in particular, obviously, scrap is not included (in the tariffs) today.”

He made clear his comments included only current rules, as “one doesn’t know necessarily what may happen in the days, weeks and months ahead.”

“But the scrap flowing across the border is not an impact to us,” Millett said. “We bring about 700,000 tons of scrap in (annually) from Canada and about 400,000 tons up from Mexico, but that remains unaffected.”

On pig iron, Millett said, “We will have a little impact from tariffs on pig iron, if they remain in place.”

Millett went even further when forecasting the durability of the tariffs in general:

“I don’t believe that the current tariff regimen is going to be in place much longer than through this year.”

For the time being, he said the company would implement a strategy on pig iron similar to the outset of the war in Ukraine in 2022, when prices surged.

With skyrocketing prices and limited availability, “we increased our prime scrap and, more importantly, our, what we call, SHRED-1, our low residual scrap and reduce that pig iron content or appetite, so that will be reduced.”

Aluminum

Millett also emphasized that the company’s “Aluminum Dynamics (unit) successfully cast its first aluminum ingot in January at our Columbus, Miss.,  facility, and in March at its Mexican satellite slab facility” in San Luis Potosi.

“We plan to continue commissioning throughout the facilities during the coming months and to produce commercially viable products in June 2025,” Millett said. “Production is expected to grow to an exit rate capacity of 50% this year and 75% capacity for the full year 2026. 

As for the tariffs’ impact on the aluminum operations, he said that for P-1020 aluminum, “which will be consumed in our aluminum facilities, the tariffs tend to be absorbed through the Midwest premium and passed on to the customer base. So that has little impact.”

Additionally, Millett said there will be some tariff impact on aluminum slab coming up from Mexico. “That will be incremental this year because, obviously, we’re ramping up and the volume is not going to be very large.”

For the US, Mexico, Canada trading bloc, Millett noted that “the USMCA gets renegotiated in 2026.”

“I wouldn’t be surprised, if that got pulled forward, but I think there will be a very, very positive outcome for the country, when that occurs,” he added.