SMU's Week in Review: May 26-30

It was revealed during the week the US government could acquire a stake in Pittsburgh-based U.S. Steel, calling it a “golden share” of the company. But Trump did not offer more color on the terms of the deal Friday evening during a rally at U.S. Steel’s Irwin Works in West Mifflin, just outside of Pittsburgh. But he did announce that he wants to double tariffs on all steel imports to 50%.

Tariffs and trade

The “on again, off again” Trump tariff train continues to chug along, with several important court rulings during the week. The US Court of International Trade ruled the IEEPA does not give the president “unbounded authority” to “impose unlimited tariffs on goods from nearly every country in the world.” The administration immediately appealed the court order, with the US Court of Appeals for the Federal Circuit granting an immediate administrative stay while the courts consider the cases.

This means the worldwide, retaliatory, and trafficking tariffs remain in effect for the time being.
Section 232 tariffs on steel, aluminum, and autos are unaffected.

Meanwhile, the European Union is fast-tracking trade negotiations with the US in the hope of avoiding the stiff tariffs threatened by the US. Trump threatened a straight 50% tariff on all EU goods sent to the US, effective June 1.

When it comes to tariffs, too much focus has been on the mills and not enough on steel consumers. That’s according to Barry Zekelman, chief exec of Zekelman Industries.

“Unless the administration actually gets serious about leveling the playing field … for consumers of steel, then everything they’ve done on the steel side is useless,” Zekelman said in a wide-ranging Community Chat. “The producers of steel, whether they be Nucor or SDI, or Cliffs, U.S. Steel or North Star, you’re not going to be able to sell us. You’re not going to have a customer.”

You can get more of that conversation here.

In trade cases, the US Department of Commerce raised Vietnam’s anti-dumping margins in the ongoing coated steel trade case. Commerce made the upward revision after agreeing with petitioners who said earlier calculations had “significant ministerial errors.”

Prices and survey results

Sheet and plate prices marginally declined again this week, marking a second consecutive week of decline and pausing the strong downward trend seen from April through early May. You can get those numbers here.

Mill lead times contracted this week for all of the sheet products tracked by SMU and held steady on plate. Overall, average sheet production times are two weeks shorter than they were three months ago, now at the lowest levels since late 2022. Plate lead times have trended down since early May and are currently at a three-month low.

Mills have managed to reduce pig iron prices to match May’s sharp decline in domestic scrap prices. Although the overall costs remain at a steep premium to prime scrap, prices have dropped by $30-35 per metric ton for material originating from Brazil and Ukraine. Dig into the details here.

Aluminum

Energy is a huge component for aluminum smelters, and Rio Tinto is embarking on a major upgrade of a hydroelectric station in Quebec. The CA$1.7 billion (US$1.2 billion) investment is aimed at securing low-carbon power for its aluminum smelters in the Saguenay-Lac-Saint-Jean region. Our sister publication, Aluminum Market Update, examines the implications of this investment for North American aluminum and the current state of the US market.

Events

SMU’s next Community Chat will feature Timna Tanners, managing director of Wolfe Research. Register here for the webinar at 11 a.m. ET on Wednesday, June 11.

Economic highlights

Monday, June 2: ISM manufacturing (10 a.m. ET), construction spending (10 a.m. ET), auto sales (TBA), Federal Reserve Chair speech (1 p.m. ET)

Tuesday, June 3: Factory orders (10 a.m. ET), job openings (10 a.m. ET)

Wednesday, June 4: ADP employment (8:15 a.m. ET), Beige Book (2 p.m. ET)

Thursday, June 5: Initial jobless claims (8:30 a.m. ET), US trade deficit (8:30 a.m. ET)

Friday, June 6: Employment report (8:30 a.m. ET)