Features

SMU’s Week in Review: June 16-20

Written by Stephanie Ritenbaugh


With so much happening in the news cycle, we want to make it easier for you to keep track of it all. Here are highlights of what’s happened this past week and a few upcoming things to keep an eye on.

Let’s kick off this review with this week’s landmark moment in the long-running drama starring U.S. Steel, Nippon Steel, and the US government. The two companies finalized their “partnership,” which includes the unusual “Golden Share” provision for the feds. It took nearly two years, a couple of presidents, several lawsuits, and a lot of heated rhetoric. And U.S. Steel will remain in its hometown of Pittsburgh. You can check out the terms of the deal, as well as a timeline of the saga.

Tariffs and trade

Tensions are still high between the US and its traditional trading partners under President Trump’s tariff regime. But talks are continuing with Canada and Mexico.

North of the border, Canada plans to adopt stricter controls on imported steel and aluminum, which would include tariffs.

“We will take the time we need to negotiate the best deal for Canada, but no longer,” Canadian Prime Minister Mark Carney said in a statement. “In parallel, we are ensuring that workers and industries are protected from the unjust US tariffs.”

Nicholas Bell, a reporter for SMU’s sister publication, Aluminum Market Update, took a dive into what Canada’s decisions might mean for aluminum. Definitely worth a read.

South of the border, Mexico suspended export programs for LAU Industries of Mexico, a US-based steel importer, after alleging the manufacturer took advantage of a government program to promote trade. The move was made while the country negotiates with Washington for an exemption to the 50% tariff on steel imports into the US.

Across the pond, we’re still digging for details on the trade deal between the US and UK. For the automotive industry, an executive order signed by Trump last week establishes an import quota of 100,000 vehicles built in the UK subject to a 10% tariff. For steel and aluminum, the order suggests tariff-rate quotas will be created once the UK meets US requirements on supply chain security and ownership transparency. But the specifics remain murky.

In the meantime, more appliances have been added to the downstream Section 232 tariff list. We have that list here.

Scrap

After a firm move sideways for June shipments, the sentiment for ferrous scrap has shown a bit of improvement. The scrap trade is hoping tariffs on steel imports will boost demand for recycled material.

Over the last month, bulk scrap sales from the US to Turkey have not materialized. Part of the reason, besides comparatively low pricing in Turkey vs. US domestic levels, may be the swift increase in bulk freight rates from eastern ports in North America. However, several other factors have played a role. SMU’s Stephen Miller has the story.

Prices and surveys

Nucor stepped up its list price for hot-rolled coil (HRC) by $10 per short ton (st) on Monday, the second week of increases after lowering its consumer spot price throughout May. It’s seeking $900 per st.

Cleveland-Cliffs also plans to increase prices for HRC to $950/st with the opening of its July spot order book. That’s up $40/st from its June list price.

Several steel market sources say they were blindsided by the price hikes. “The reason sources found the mill increases so off-putting? From coast-to-coast, steel insiders say that end-market demand remains at a trickle. All sources agree that steel supplies remain ample, and that lead times continue to remain standard,” SMU’s Kristen DiLandro reports.

But the increases may not be sticking. Steel prices inched higher across most of the sheet and plate products tracked by SMU, but market participants have noted that prices aren’t rising as much as announced increases might suggest.

Overall, SMU’s average domestic HRC price gained $20 to reach $880/st. That may be an increase, but it still trails imports from Europe. It’s supported by Section 232 steel tariffs that were doubled to 50% earlier this month.

Economic highlights

The NATO Summit will be taking place in The Hague, June 24-25. Though the meeting of world leaders won’t address tariffs and trade specifically, it’s one of the geopolitical undercurrents flowing as relationships between the US and its allies are strained.

Monday, June 23: Existing home sales (10 a.m.)

Tuesday, June 24: Federal Reserve Chair Jerome Powell testifies to House Financial Service Committee (10 a.m.); Consumer confidence (10 a.m.)

Wednesday, June 25: New home sales (10 a.m.)

Thursday, June 26: Durable goods (8:30 a.m.); GDP, second revision (8:30 a.m.); Pending home sales (10 a.m.)

Friday: June 27: Consumer sentiment (8:30 a.m.)

Stephanie Ritenbaugh

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