SMU Week in Review: September 1-5 

Domestically produced hot-rolled coil spot market base prices remained at $805 per short ton (st) last week, unchanged from the week prior but still down $25/st over the past four weeks.

Prices and lead times for domestic sheet and plate have continued to hover at low levels. Meanwhile, certain imported steel products remain competitively priced, even with Section 232 tariffs of 50% applied. (For example, hot-rolled coil from some Southeast Asian countries could in theory land to customers at ~$772/st, $33/st cheaper than domestic HR.) That might help explain why 94% of steel buyers surveyed by SMU said mills are willing to talk price to secure an order.

Sentiment among market participants showed modest improvement. After dropping to the lowest level since May 2020, the Current Buyers’ Sentiment Index in the SMU survey showed a modest two-point gain this week.

Trade and Tariffs  

During the US International Trade Commission’s (ITC’s) five-year “sunset” review of duties on HR from China, India, Indonesia, Taiwan, Thailand, and Ukraine, it was determined that removing the trade measures would threaten the domestic steel industry. The Commission voted to extend the existing orders for HR from those countries for at least another five years.

Meanwhile, the US steel market shrugged off news that the Court of Appeals ruled against President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to justify “reciprocal” tariffs. A final decision now rests with the Supreme Court.

The pig iron trade between the US and Brazil remained quiet last week. Brazilian sources said they’re awaiting discussions with US mills about future shipments. And lower Phos pig iron from Ukraine into the US increased to 150,000 metric tons (mt) in July, according to the Ukrainian State Customs Service.

Meanwhile, the September scrap market has started to settle, with one important EAF producer paying down $20 per gross ton for #1 busheling.

Acquisitions 

Last week saw acquisition announcements from Friedman Industries, FalconPoint Partners, and Varsteel.

Friedman Industries, a Longhorn, Texas-based steel manufacturer and processor acquired Miami-based Century Metals and Supplies.

A private-equity firm, FalconPoint Partners acquired SMS, an industrial service provider. It committed $500 million to support the platform’s growth with state-of-the-art equipment and grow its market share.

Varsteel, a Lethbridge, Alberta-based service center acquired two companies based in British Columbia: Reliable Tube, based in Langley, and Spartan Metal Processing, based in Kelowna. Each will operate as an independent subsidiary of Varsteel.

Broader Context 

The US Federal Reserve published its Beige Book. Fears about market uncertainty still characterize the US economy, the Fed finds.

The Institute for Supply Management (ISM)’s reports found that the domestic manufacturing sector has contracted now for a sixth straight month.

The US government estimated construction spending to be at a seasonally adjusted annual rate of $2,139 billion in July, down 0.1% from June’s revised rate of $2,140 billion. The July figure is 2.8% lower than a year ago. It is also the lowest total since December 2023, according to Census data.