“Any steel coming into the United States is going to have a 25% tariff. … Aluminum, too,” CNN quoted Trump as saying.

The president made the comments about tariffs while speaking to reporters on Sunday afternoon. He was boarding Air Force One to fly from Florida to New Orleans for the Super Bowl, Bloomberg reported.

The president also said he would announce reciprocal tariffs on countries that place duties on US exports. Trump said that announcement would come on Tuesday or Wednesday.

“Very simply, it’s if they charge us, we charge them,” Trump said, according to CNN.

Trump had previously raised the possibility of reciprocal tariffs during a press conference on Friday afternoon with Japanese Prime Minister Shigeru Ishiba.

Topalian’s crystal ball

Trump’s comments come after Nucor CEO Leon Topalian lamented during an earnings call in late January that Section 232 tariffs on steel had been weakened over time.

“Country exemptions and quota arrangements, including with Mexico and Canada and the EU, should be replaced with tariffs,” he said at the time. “And the Section 232 measures should be extended to downstream steel products such as fabricated structural steel.”

Topalian also said that the easing of Section 232 tariffs at the United States’ northern and southern borders had been “grossly abused.”

“Roughly 40% of the imports coming into America today are from Canada and Mexico,” he said. “That has got to come way down. I think in the coming hours and days, you’re going to see broad sweeping tariffs that are going to come back in to create a much more level playing field.”

Section 232 redux?

It was not immediately clear what mechanism Trump might use to impose the 25% steel and aluminum tariffs.

Trump in 2018 used Section 232 to declare a national security emergency and to impose tariffs of 25% on steel imports from most (but not all) countries and 10% tariffs on imported aluminum.

In the intervening years, various exceptions and exemptions have been made. Australia, for example, was not subject to Section 232. Tariffs were removed from Canada and Mexico in 2019 ahead of USMCA going into effect. And Brazil, South Korea, and Argentina agreed to absolute quotas – also known as hard quotas – in exchange for exemption from the tariffs.

In addition, former President Joe Biden negotiated tariff-rate quotas, or soft quotas, with the European Union, Japan, and the United Kingdom. Those went into effect in 2022.

What does it mean for steel prices?

“This week will be wise consumers waking up to price risk. They will come out to try and buy at last week’s prices with deals as long into the calendar as sellers will allow,” one industry veteran said.

“If the market really gains traction, the following week will be the rest of the consumers trying to jump in. The best buyers have already hedged,” he added.

The potential for such a dynamic had been in place for a while. And the chance of it happening have only gone up since Trump’s inauguration, he noted.

So our survey covers things like pricing for the various grades SMU covers, demand, logistics, outlooks, and so much more. We’ve created Scrap Buyers’ Sentiment Indices, both current and future, to keep continuity with what you’ve come to expect from SMU.

I could go on talking about it, but even better, I’d like to show you some of the results from our first-ever SMU Scrap Survey. It will be published once a month. The goal: To give you some key intel just ahead of the monthly scrap settle.

It’s free to participate, and, remember, if you’re a Premium member, you will have access to the results. Judging from our first survey, there will definitely be plenty of good bits to digest. (And if you’d like to upgrade from Executive to Premium, please contact SMU Senior Account Executive Luis Corona at luis.corona@crugroup.com.)

So without further ado, we’ll let the survey results speak for themselves.

How is demand for ferrous scrap?

Regarding current demand, 41% responded that demand is improving, 45% thought it was stable, and 14% said it was declining.

What our respondents are saying:

“Seeing limited increased demand from Southeast Asia and US domestic.”

“Pricing is flat.”

“Not much scrap is moving in western Canada. Everyone needs more tons.”

“Mills are restocking from low year-end inventory levels.”

“Demand seems to be stable, but supply is certainly down.”

“I think a restocking period that was hoped for in January stalled because of weather.”

“Seems like everyone is cautiously optimistic.”

“Global markets have struggled with China buying less, but domestic demand is improving on a volume basis.”

How do you see ferrous scrap pricing behaving over the next 60 days?

Respondents were bullish on scrap’s pricing outlook for the next 60 days, with 69% seeing prices strengthening. However, 22% thought pricing would be sideways, and the remaining 9% anticipated the price environment would be weakening.

What our respondents are saying:

“The current situation on tariffs is unclear. However, mill operating rates will likely strengthen heading into Q2. This will be positive for scrap and steel prices.”

“Unless we have more bad weather, order books not improving yet.”

“Trump is back in office.”

“Oil and gas companies are ramping up for sustained growth.”

“Supply-driven price increases in Jan. and Feb. I think the market in March is sideways to down based on a weak steel industry.”

“What happens in Washington will set the mood for the balance of this year.”

“Demand will increase throughout Q1. Supply will not keep up.”

“I think by the end of the first quarter, the market will be sideways to down. Mills ran inventory down for year-end and need to replace tons. Shredder feed will start flowing in, more material will be available.”

“Lower inbound flows and steady demand should bode well for scrap pricing.”

“Low melt-shop utilization rate.”

How do you think the levels of export demand will affect domestic prices?

On the question of export demand influencing US prices, 37% thought it would end up increasing domestic tags; 46% anticipated no effect; and 17% saw the opposite, with prices decreasing.

What our respondents are saying:

“Threat of tariffs.”

“Taking cut grades out of the supply chain.”

“Lower exports usually drops pricing.”

“Exasperate supply tightness.”

“Zero.”

“Won’t be much.”

“Mild increases recently.”

“Automakers are struggling with high inventories and lower demand, so this could help limit the upside.”

“Export has been a non-event for months in a row. Could be negative impact on price as winter months come to an end, unless domestic demand or export pricing picks up.”

How are the levels of prime industrial scrap shipments into your facility?

For prime levels, 5% saw them improving, 69% thought they were stable, and 26% said they were declining.

What our respondents are saying:

“OEM available tonnage should increase this month and next.”

“Normal during winter months.”

“Don’t see much prime.”

“Slow manufacturing levels reducing generation of prime scrap.”

“Stable but down overall.”

“Manufacturing weak.”

Just the beginning…

Well, there you have it. Just a quick peek at some of our scrap survey data. We had a lot of respondents in this first one, and we’re sure things will ramp up even more as we get rolling in the months ahead.

So, stay tuned for more SMU scrap coverage, especially with the February settle happening as this article is published. Additionally, we’ll be keeping tabs on all things Trump for any tariff updates.

And, finally, we can’t wait for you to participate in our second survey for next month! If you’d like to participate, reach out to us at info@steelmarketupdate.com. It can be filled out in just a few minutes, we promise!

Ishiba echoed Trump’s comments about a major investment. “It is not an acquisition, it is investment,” the prime minister said, according to a translation of his remarks.

The leaders’ comments have been widely reported by mainstream media outlets. You can also find a transcript of the press conference posted by Roll Call here.

Trump and Ishiba did not provide specifics of what a Nippon Steel investment in U.S. Steel might look like.

And it was not entirely clear where things stood with the proposed nearly $15-billion acquisition of USS by Nippon after the press conference. Reuters, for example, reported after the event that Nippon Steel had not withdrawn its bid for U.S. Steel.

Background

Recall that Trump loudly opposed Nippon Steel acquiring U.S. Steel as he courted support from the United Steelworkers (USW) while on the campaign trail.

The USW greeted news of the potential investment by Nippon with caution. “While we await the details of the proposed investment, we encourage President Trump to continue safeguarding the long-term future of the domestic steel industry by instead seeking American alternatives,” USW International President David McCall said in a statement on Friday.

Cleveland-Cliffs CEO Lourenco Goncalves has also opposed the proposed Nippon acquisition. He has said his company still wants to pursue a deal with U.S. Steel. (He has also repeatedly bashed Japan.)

Bedrock Industries CEO Alan Kestenbaum – who sold Canadian steelmaker Stelco to Cliffs – has in addition expressed interest in U.S. Steel. He said during an SMU Community Chat in January that he wanted to “make U.S. Steel great again.”

Tariffs

Trump touched on the issue of tariffs during the press conference with Ishiba. He said the US would probably agree to “reciprocal tariffs” with Japan. The president said details might be announced on Monday or Tuesday.

The guiding principle? “A country pays so much or charges us so much, and we do the same,” Trump said.

Ishiba said consultations with the US on tariffs would continue. “If it is mutually beneficial, tariffs need to be set,” he added.

Nearly half of the steel that entered the US in December was exported from just three countries: Canada (24%), Mexico (15%), and South Korea (10%). Other key suppliers included Brazil, Vietnam, Romania, Germany, Taiwan, Japan, and China. Combined shipments from these ten countries accounted for 80% of December imports.

Import trends

Import data can be analyzed on a three-month moving average (3MMA) basis to better highlight long-term trends (Figure 1, right). From this perspective, December imports fell to the lowest level of 2024 at 2.20 million st. The January 3MMA is currently up to 2.38 million st. For comparison, imports averaged 2.41 million st per month in 2024 and 2.35 million st per month in 2023.

Finished vs. semi-finished imports

Imports of finished steel products also rebounded in December, rising 14% m/m to 1.84 million st (Figure 2). The count through January shows a potential 21% increase to 2.23 million st, which would be an eight-month high. Finished imports averaged 1.89 million st per month in 2024 and 1.83 million st per month in 2023.

Meanwhile, semi-finished steel imports (mostly slabs to be further processed by a mill) fell to a two-year low of 296,000 st in December, down 36% m/m. January licenses currently show a 133% recovery to 691,000 st. Semi-finished imports averaged 515,000 st per month in 2024 and 524,000 st per month in 2023.

Imports by category

Figure 3 shows monthly imports by popular steel product categories. Noteworthy mentions by category include:

• Flat-rolled imports jumped 18% m/m in December following November’s one-year low. January licenses currently show a potential 5% m/m recovery to the highest rate seen in six months.
• Imports of long products rose 11% m/m in December. January licenses are currently up a whopping 60% from December to a two-and-a-half-year high.
• Pipe and tube imports increased 15% m/m in December, the highest rate seen in six months. January licenses are currently up another 25% m/m to a potential 21-month high.
• December stainless imports fell 4% m/m, while January projections are currently up 13% m/m to a six-month high.

Flat-rolled imports

Figure 4 shows flat rolled imports by popular products. Five products saw weakening imports from October to December, while two products increased. January licenses are mixed with some up and some down. Noteworthy mentions by product include:

• Hot-rolled coil imports jumped 68% m/m in December to a 15-month high. January licenses are currently down 22% m/m.
• Cold-rolled coil imports rebounded 10% m/m in December from November’s five-month low. License data through January shows a 26% m/m increase, potentially the highest monthly rate seen since March 2022.
• Galvanized imports fell 14% m/m in December to a 14-month low. Levels have partially recovered through January, with licenses currently up 10% m/m.
• Other-metallic coated imports slipped 17% in December. January licenses are down another 19% m/m to a potential 13-month low.
• Coiled plate imports surged 57% m/m in December to an 11-month high. January licenses are up even further, increasing 22% m/m to a possible year-and-a-half high.
• Cut-to-length (CTL) plate imports fell 32% m/m in December, marking one of the lowest rates seen in the past four years. January license data currently shows a 55% m/m recovery, possibly shifting to a six-month high.
• Tin plate imports rebounded 61% m/m in December to a four-month high. January licenses are up 8% m/m, the highest monthly rate in our limited six-year history.

Imports by product

Table 1 provides further detail into imports by product, highlighting high-volume steel products (click to expand). Explore this steel trade data deeper on the Steel Imports page of our website.

To further explore import data in more detail, visit the International Trade Administration’s Steel Import Monitor.

On Feb. 1, President Trump issued executive orders imposing new tariffs on imports from China, Canada, and Mexico. In doing so, the president cited the “extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl” as a basis for the duties. Specifically, these orders applied a 10% duty to Chinese imports, a 25% duty to Canadian imports (except for energy products, which received a 10% tariff), and a 25% duty to Mexican imports. These tariffs were set to enter into force on Feb. 4.

Almost immediately, Canada announced a series of retaliatory measures, including 25% tariffs on a first tranche of US goods, which were set to apply on Feb. 4. This initial list of Canadian tariffs did not cover primary steel products but did include certain steel household appliances. Canada also announced a plan to impose additional tariffs after a 21-day comment period, which would potentially cover steel and aluminum products, as well as passenger vehicles and trucks and other products. Canada further contemplated non-tariff measures related to critical minerals, energy, and other goods. And individual Canadian provinces started declaring non-tariff retaliatory policies as well. Mexico also vowed to retaliate but did not announce formal measures.

By the morning of Feb. 3, the bluster of the weekend partially subsided, and the Trump administration reached an agreement with the Mexican government regarding increased border commitments that delayed the implementation of the tariffs on Mexico for one month. That afternoon, a similar agreement was reached with the Canadian government. By the end of the day, Trump issued new executive orders, which paused the previously issued Canadian and Mexican tariffs until March 4, but allowed the president to restore the duties immediately if Canada or Mexico were found not to abide by their commitments.

No similar agreement was reached with China. And, as of Feb. 4, new 10% import tariffs have been in effect on all Chinese imports. Notably, these duties are applied in addition to all other tariffs applied to Chinese goods, including Section 232 duties, Section 301 duties, antidumping and countervailing duties, and normal US customs duties.

On Feb. 3, US Customs and Border Protection (CBP) issued guidance on implementing the China tariffs. This guidance confirms that there is no exclusion process and that mail shipments from China must be formally entered, which led to the US Postal Service temporarily suspending Chinese mail for a short period. Notably, CBP issued similar guidance regarding the now-paused Canadian and Mexican duties, meaning that imports from Canada and Mexico may be subject to the same measures if those tariffs are restored next month (or sooner).

Trump’s initial executive order also specified that all Chinese imports are ineligible for duty-free entry under the de minimis program. However, that provision was later clarified in an executive order issued on Feb. 7, which reinstated the de minimis program for all shipments until CBP develops and implements systems to efficiently collect duties on low-value shipments.

In response, the Chinese government announced retaliatory measures, including a 15% tariff on certain types of coal and liquefied natural gas and a 10% tariff on crude oil, agricultural machinery, and certain vehicles. These measures take effect on Feb. 10. China has also announced new export controls on critical metals and related technologies. And as part of its retaliatory measures, China placed two American companies (Illumina and PVH Group) on its unreliable entities list and contemplated antitrust investigations into leading US technology companies.

Where does this leave us?

For all of the back-and-forth, only new Chinese tariffs have entered into force. But this pause is likely little more than an intermission in tariff actions by the Trump administration. Indeed, the Canadian and Mexican tariffs are suspended only for a month and could be reimposed at any time. Trump has also indicated that he might increase the Chinese tariffs unless the Chinese government takes action to stem the flow of fentanyl and its precursor chemicals into the United States. Moreover, this past week, the president commented that “substantial” tariffs targeting the European Union are in the works and that the United Kingdom might also be a target for another round of US tariffs. Trump also recently vowed to impose broad tariffs on key industries, including steel, aluminum, semiconductor chips, pharmaceuticals, and oil and gas.

If there is any certainty in the whirlwind of tariff news of the past week, it is that the Trump administration continues to believe in tariffs as an important tool – both for its trade policy and its other policy goals. In his Senate confirmation hearing, Treasury Secretary Scot Bessent described the administration’s use of tariffs as part of a three-pronged strategy “{o}ne will be for remedying unfair trade practices either in an industry or by a country, like steel and China. Another will be as a revenue source, and third is to use it for negotiations with countries like Mexico for the fentanyl crisis.”

Other administration officials, like Commerce secretary nominee Howard Lutnick and senior trade adviser Peter Navarro, have made similar statements, including stressing the need for reciprocal or balanced bilateral trading relationships.

While this sweeping use of tariffs should come as no surprise given Trump’s campaign promises, it does signal a significant shift in US trade policy. While the administration has reiterated its plans for targeted tariffs, based in part on the analyses ordered by its America First trade policy memorandum, the president and other officials have kept the door open to applying broader, universal tariffs.

For instance, during a press conference with the Japanese Prime Minister on Friday, Trump said he plans to announce reciprocal tariffs as early as next week. He did not elaborate on the potential measures but indicated they could be broad. Likewise, the administration has repeatedly pointed to tariffs as a substantial source of revenue, which it intends to pay for other policy priorities, including the extension and expansion of existing tax cuts.

In fact, linking tariff and tax policy may help address broader imbalances in our trading relationships. Many of the United States’ largest trading partners apply a value-added tax (VAT) to both imports and domestic production. However, since the VAT is often rebated when domestic products are exported, an underlying tax imbalance exists in those markets between imports from the United States (which are subject to the VAT) and exports to the United States (which typically have the VAT rebated). This contributes greatly to the bilateral trade deficit between the United States and these countries. And it is also why when Canada, Mexico, and the EU, for example, claim they apply low tariffs on US imports, they are not telling the full story. While it has not always been framed as such by the Trump administration and others, an aggressive use of tariffs may help rebalance US trade at an even more fundamental level.

It is also clear that the administration views tariffs as a useful instrument for achieving non-trade policy objectives. During a recent interview with Politico, Peter Navarro described the recent round of tariffs on China, Canada, and Mexico as actions in a “drug war, not a trade war.” As this flurry of trade measures exemplifies, Trump will not hesitate to use tariffs as leverage for reaching goals on border security and other policy aims.

Editor’s note
This is an opinion column. The views in this article are those of experienced trade attorneys on issues of relevance to the current steel market. They do not necessarily reflect those of SMU. We welcome you to share your thoughts as well at info@steelmarketupdate.com.

On Jan. 26, 340 members of United Steelworkers Local 8328 ratified a new contract and returned to work.

The union said the labor agreement secured meaningful gains in wages, benefits and working conditions, including a 10% wage increase over three years and a $2,000 signing bonus.

USW Local 8328 President John Manfre praised the resilience of the union members during the cold and challenging lockout.

“We did not back down, and we fought for a contract recognizing our work’s value,” he stated. “Overall, we are happy with the outcome as we came together as a collective to bargain for fairness and respect.”

Welded Tube of Canada said it returned to full operational capacity immediately after the contract’s ratification.

“A work stoppage is always regrettable, but we are happy to have our employees back at work doing what we do best: making great steel tube for our customers,” the company said in a statement to SMU.

The company’s three facilities in Concord, just north of Toronto, have more than 600,000 feet of manufacturing space combined, multiple tube mills, a slitter for coil processing, a warehouse and distribution facility, and other equipment.

In total, Welded Tube of Canada operates five manufacturing and finishing facilities in Canada and the US. They have a combined annual production capacity of 700,000 tons of hollow structural sections (HSS), mechanical ERW tubing, and oil country tubular goods (OCTG).

Evraz NA also said it reserved the right to re-quote any offers that had not been confirmed.

Evraz NA, SSAB Americas, and Nucor have all followed up on their initial price bumps at the opening of their March order books with a second round of increases. Nucor was the first, followed by SSAB, and now Evraz.

Plate prices stand at $910/st on average this week, up $10/st from last week and up $65/st compared to two weeks ago, according to SMU’s interactive price tool.

SMU will next update its plate prices Feb. 11. You can also track mill price announcements here.

Evraz NA is a Chicago-based steelmaker and a subsidiary of London-based Evraz Plc.

Marc Lerman, COO of Steel Warehouse said demand dropped in the second half of 2024 and has recently started to pick up.

“We’re not really looking to see significant improvement until the second half,” Lerman said.

“The best way I can describe 2024 is like, put yourself back in college,” said Drew Gross, president and COO of Alliance Family of Companies. “You’re walking up to the house party and you’re thinking, ‘This is going to be sweet. They got the red cups. They got the keg.’ That was ’21 and ’22; ’23 was the walk home; and ’24 was the morning after.”

Gross said the company is “cautiously optimistic” about 2025.

“It’s going to be a little bit of a slow start, and there’s been a huge change in administration, so we have to see how it plays out,” Gross said. “But as the year progresses, we have a sense of Q1 that we’re battling some of the same stuff from 2024 and Q2 getting a little better.”

Gary Stein, CEO of Triple-S Steel Holdings, said the company sells some flat-roll but is primarily a structural steel company, so it is “not as optimistic as the OEM support companies.”

“The only bright spots are construction of new energy projects – data centers, chip plants, new car plants, batter plants – and those are going to be very, very massive builds that are happening, and most of that steel does run through service centers,” Stein said.

But Triple-S is a little less bullish as higher interest rates remain in place, which tamps down speculative and commercial development.

Re-shoring

Asked about the effort in recent years for companies to re-shore supply chains and manufacturing, the panel said some progress has been made, but challenges remain.

“I think currently, we got some holes, we got some problems,” Gross said, adding that Washington, D.C. must be held accountable for helping the industry address these problems.

“We can do a lot better,” Gross said. “I think this administration is going to be challenged to really do that for us. I would love to see re-shoring happen in a way that we anticipated, post-Covid.”

Stein noted that labor will be a concern going forward.

“If we deport 10 million people, we’re not going to have people staff those factories,” Stein said. “We’ve had two shipments that were canceled by customers because their workers weren’t there. So there are really complicated issues, and we’re not seeing re-shoring in any significant amount in our markets.”

Lerman pointed out that manufacturing isn’t just an American issue, but it’s important for Mexico and Canada as well.

“We do better if we thrive as a group of countries,” Lerman said. “It’s helpful to have thriving neighbors.”

“The reason why some companies went to Mexico is because they couldn’t fill positions here,” Lerman said.

Gross said there “needs to be a conscious effort to streamline and increase the flow of legal immigration.”

But automation also will come into play, he said.

“Investing in further automation that can help alleviate some of that, and that’s certainly a route that we’ve gone down,” Gross said. “We’re highly robotic and that’s just part of adaptation.”

At the Tampa Steel Conference 2025 on Feb. 4, SMU Senior Analyst David Schollaert had a Fireside Chat with Gilmore. They touched on the current tariff situation, as well as Gilmore’s college past as a basketball player, among many other issues.

(While the presentation is not available on video, some of Gilmore’s SMU Community Chats are.)

Worthington Steel first year

Gilmore noted that in its first year, “the company came out strong” and earnings have been “solid quarter over quarter.”

“You look at our performance in the stock market, and it’s outperformed our peers during that time,” he added.

Hoop dreams

As for his start in steel, Gilmore said he went to Valparaiso University in Indiana on a basketball scholarship.

On the advice of a friend who worked at Worthington’s Porter, Ind., facility, Gilmore interviewed and got hired in inside sales. And 27 years later, he’s still with the company, albeit in its new Worthington Steel form.

Opinion on Trump tariffs

Back at SMU Steel Summit in Atlanta, Gilmore had said the tariffs were negotiating tactics, and he’s still basically on board with that opinion.

“We’ve managed and operated successfully through the prior Trump administration, and so I think the approach he’s taking is not unusual,” Gilmore said.

He noted he wasn’t surprised really to see Trump come out taking a tougher line with Mexico and with Canada.

“I do feel like he had specific areas that he ran out and made promises, and it’s the border and it’s illegal immigrants and then it’s fentanyl,” Gilmore said. “And those are two borders that he feels have not been protected, and those two countries haven’t done enough to help with that situation.”

Gilmore believes these tariffs were a means of Trump bringing those countries to the negotiating table, and they “flinched.”

Additionally, he said there is a lot more room to maneuver with the USMCA agreement, which is up for review in 2026. That is, Trump suspects both countries are now “on their heels, and that’ll be a good opportunity to approach that subject.”

Tariff fallout?

Looking out over the audience in Tampa, Fla., Gilmore said, regarding the potential tariff impact: “I think for this group, probably the easiest place to start is on the supply chain. And if these tariffs were to take effect, how does that impact our supply chains?”

He noted that at Worthington Steel, almost everything they source is local, “and that’s on purpose.”

“That’s been our strategy, and that will continue to be our strategy – and that protects us in these types of situations,” he said.

“Certainly, there could be impacts to costs, and those have to get passed through the supply chain, and then, ultimately, if it gets to the consumer, that’s where we could have some difficulties.”

However, Gilmore doubted the possibility of an extended action between the three USMCA countries.

“Personally, I find it very hard to believe that we would be in a trade war with Mexico and Canada for more than a few months at any given time,” Gilmore said. “I don’t know how Mexico and Canada could survive that. That’s a recession for them. That’s a few points off GDP for us – my opinion.”

In the end, though, Gilmore is upbeat on the resilience of the US steel industry.

“This industry is used to dynamic situations,” he said. “We have faced every economic shock that exists over the last several years.”

In the face of weak demand and an “unsustainably low” pricing environment, GrafTech International posted another quarterly loss to close out 2024.

President and CEO Timothy Flanagan highlighted in the latest earnings report that the company continues executing its plan to regain market share.

Its sales volumes of 103,200 metric tons showed a 13% rise year over year. And despite industry-wide headwinds, GrafTech expects “a low double-digit percentage point year-over-year increase” in volumes again this year.

Still, the Brooklyn, Ohio-based graphite electrode producer hasn’t posted a profit since the fourth quarter of 2022. It’s been struggling since it was forced to close its Monterrey, Mexico, facility from September to November of that year. Former CEO Marcel Kessler also stepped down in November 2022; previously CFO, Flanagan has led the company since.

GrafTech is taking measures to improve its order book, he said. An example is a shift in its geographic mix to regions with a better chance of achieving higher average selling prices.

Additionally, the company is increasing its prices by 15% on volumes not yet committed for 2025, said Flanagan.

With geopolitical and economic uncertainty continuing to constrain global steel production, GrafTech expects electrode demand to remain flat in its key regions.

It also repeated what it’s said in previous earnings reports: “Longer term, we remain confident that the steel industry’s efforts to decarbonize will lead to increased adoption of the electric-arc furnace method of steelmaking, driving long-term demand growth for graphite electrodes.”

The US rig count is 586, up by four from the prior week. It’s worth noting that in late January, US activity fell to the lowest rate recorded since late 2021. US drilling activity has remained at reduced levels since June 2024.

Breaking a four-week streak of consecutive gains, Canadian activity slipped by nine rigs this week to a total of 249. Recall that the previous week’s count of 258 was the highest rate seen since March 2018. Historically, Canadian counts tend to surge through February before declining as warmer weather and thawing ground conditions limit access to roads and drill sites.

The international rig count is a monthly measure that was updated this week, now totaling 905 in January. This is down by four from the December count and 60 fewer than the same month last year.

The Baker Hughes rig count is significant for the steel industry because it is a leading indicator of oil country tubular goods (OCTG) demand, a key end market for steel sheet.

For a history of the US and Canadian rig counts, visit the rig count page on our website.

Though not a major US coal importer, the value of shipments of metallurgical coal from the United States increased by almost a third to $1.84 billion (€1.77 billion) in 2024, according to customs data.

China’s measures will take effect on Feb. 10 and will also include 15% tariffs on liquified natural gas (LNG) and 10% on crude oil, farm equipment and some cars from the US.

The tighter export controls apply to molybdenum, tungsten, tellurium, bismuth and indium. Companies must seek approval from authorities to ship them out of China, the commerce ministry said, describing the measures as being necessary for the country’s national security and interests.

This was first published by CRU. To learn about CRU’s global commodities research and analysis services, visit www.crugroup.com.

We always knew that collecting solid waste and burying it in big holes in the ground was a lucrative business. These numbers validate that. The question is how we shift some of that emphasis to recycling, which is badly needed.

Key takeaways on recycling

The company expects to begin generating higher operating EBITDA from its past investments in recycling automation and growth projects.

EBITDA of $53 million in 2024 is expected to rise to $120 million-$130 million in 2025 and more than double in 2026 to $250 million-$260 million. Guidance for 2027 is $290 million-$300 million.

Capex in the segment will decline from $443 million in 2024 to $65 million-$85 million in 2026 as the company moves from aggressive growth capitalization to “harvesting” those investments.

The company’s 2025 forecast for EBITDA is predicated on an average single stream commodity package (e.g., aluminum/steel-old corrugated cardboard, plastics, mixed paper) of $85 per short ton. And 2026 sees an aggressive revenue increase of $125 per short ton, or 47%.

WM’s sensitivity analysis says that for every $10 per short ton change in the commodity package, there is a $25 million impact on EBITDA.

Aluminum remains the linchpin behind single stream recycling

Aluminum has always been the economic driver behind single-stream curbside collection. Although it represents only 2.7%-3% of the total material generation (paper at 40%, cardboard at 14%, steel 3%, plastics the rest), aluminum represents about 50% of the revenue stream.

Aluminum’s outsized influence on that aggregate commodity package price is one of the reason’s that US curbside operators such as WM, Republic, Waste Connections and Casella get alarmed by the threat of new deposit legislation.

Why curbside recyclers fear deposit

Curbside recyclers believe the introduction of deposit legislation in states that they operate in would divert the aluminum into redemption centers. This would reduce their revenue stream and turn their material recycling facilities (MRF) into the red. There is some logic in that argument.

However, the available data on recycling rates and MRF within the existing deposit states offers some intriguing arguments that might change opposition.

The table below shows the redemption rates in the 10 existing deposit states. Clearly the $.05 per can deposit in nine states and $.10 in one (Michigan) are not enough of a financial incentive for people to turn the cans in for the deposit.

State	Redemption Rate (%)	Unredeemed Deposit Recipient
California	77	100% state
Connecticut	47	45% state, 55% beverage distributors
Hawaii	55	100% state
Iowa	62	100% beverage distributors
Maine	83	100% state
Massachusetts	74	100% state
Michigan	76	75% state, 25% beverage retailers
New York	61	80% state, 20% beverage distributors
Oregon	82	100% beverage distributors
Vermont	59	100% state

Source: Ball 50 States of Recycling 2021

It is important to note that many MRF operate within these 10 states now. In fact, the largest MRF in the US is operated by Sims Recycling in Brooklyn. Eight of the top 20 largest MRF in the US and Canada operate within deposit environments. They are surviving just fine.

Why are they able to co-exist? The simplest reason is the consumer is too lazy to take their cans back to redemption centers for the $.05-.10 deposit refund. The redemption rates above only capture what is redeemed for deposit, not what be captured by the MRF in these states through curbside, single stream programs. MRF in these states are clearly getting enough aluminum back to underwrite their entire curbside programs or else they would not be operating them.

Unredeemed deposits are the key to eliminating MRF opposition

Here is where this gets interesting for both incumbents in deposit states and possible new states.

The table above shows who gets to keep the unredeemed deposits. It is the states, and, in some cases, the distributors. That’s “serious found money.” Here is some perspective. It is estimated that the California Beverage Container Fund holds $819 million in unredeemed deposits. That represents the equivalent of nearly 250,000 metric tons of aluminum.

Now, imagine the following idea. What if a core tenet of any new deposit bill allowed the MRF operators in each state to claim the deposit back for what came through their system via curbside programs? That $.05 per can or $1.50 per pound would bump up revenue enormously. Used beverage containers today are worth $1.13-1.15 per pound based upon their intrinsic value. A MRF operator would not only earn the intrinsic value but also this $1.50 for the deposit.

This “super-charging” of revenues would allow MRF to potentially expand the scope of their curbside services to more communities in each state and increase recovery.

Allowing MRF to claim unredeemed deposits is an effective way to defuse single stream operator opposition and get badly needed deposit legislation expanded into states with high population and can consumption.

Editor’s note
This is an opinion column. The views in this article do not necessarily reflect those of SMU. We welcome you to share your thoughts as well at info@steelmarketupdate.com.

Every other week, we poll hundreds of steel buyers on how they rate their companies’ chances of success in today’s market, as well as their future business expectations for the next three to six months. This data is used to calculate our Current and Future Steel Buyers’ Sentiment Indices, metrics tracked since SMU’s 2008 inception.

Current Sentiment

SMU’s Current Buyers’ Sentiment Index jumped 14 points from mid-January to +49, marking the highest measure recorded since early June 2024 (Figure 1). Prior to this survey, Sentiment had hovered near multi-year lows since July 2024. In 2024, Current Sentiment averaged +48, while this time last year it was significantly stronger at +66.

Future Sentiment

Future Sentiment rose one point this week to +67. While slightly lower than most readings seen since October, Future Sentiment remains historically strong (Figure 2). Future Sentiment averaged +65 across 2024 and was slightly lower at +62 this time last year.

What SMU survey respondents had to say:

“It went from ‘wait for the election’ to ‘wait for the new year’ to ‘wait for inauguration’ to now just ‘wait.’ Not ideal out there.”

“We have solid contractual customers and see some moderate upside to upward pricing pressure.”

“We continue to be profitable, but at volumes that are below expectation.”

“I wish our backlogs were a bit stronger, but we’re doing OK.”

“Expect higher future volumes will mean much better results.”

“Still favorable raw material prices.”

“If prices spike as result of tariffs, the OEM/manufacturing space may be squeezed.”

Sentiment trends

When analyzed as a three-month moving average, both Sentiment Indices saw gains this week compared to two weeks prior (Figure 3). The Current Sentiment 3MMA rose to a six-month high of +41.26 as of Feb. 5, and the Future Sentiment 3MMA jumped to a 13-month high of +69.54.

About the SMU Steel Buyers’ Sentiment Index

The SMU Steel Buyers Sentiment Index measures the attitude of buyers and sellers of flat-rolled steel products in North America. It is a proprietary product developed by Steel Market Update for the North American steel industry. Tracking steel buyers’ sentiment is helpful in predicting their future behavior. A link to our methodology is here. If you would like to participate in our survey, please contact us at info@steelmarketupdate.com.

But I’ll do my best. I’m also going to preview some of the results from our latest steel market survey, which we’ll release to our premium subscribers tomorrow.

Keep an eye out for that survey. The steel market has been mostly flat since last summer. This time is different. We’ve got a clear picture in these latest results of prices inflecting upward – even if there are still a lot of questions about just how high and for how long that upturn might last.

Survey shows Timna’s ‘Trumplications’ are in the house

As Wolfe Research’s Timna Tanners put it in her opening talk at Tampa on Monday afternoon, we’re living in a world of “Trumplications” now. That probably means – at least in the short term – higher scrap costs, lower imports from countries hit or threatened with tariffs, and higher steel prices.

SMU data reflects that. Scrap went up in January. More than 75% of the respondents to our more recent survey expect scrap to go up again February, maybe by a lot. Lead times, meanwhile, have been ticking higher this month. It started with hot-rolled coil and plate earlier this month. Now we’re seeing coated lead times extending too.

About two-thirds of folks who responded to our survey expect lead times to continue to extend. Meanwhile, nearly 25% of respondents now think that HR prices will get to $800/st or higher. (Several mills are already targeting that level.) A month ago, only 5% thought anything with an eight-handle was in the cards.

A lot has changed since early January, of course. The year started out a little slower than many had hoped it might. Some of that resulted from bad weather. We didn’t see anything as catastrophic as Snowmageddon in early 2021. But a lot of shipping days were lost here and there. And that adds up.

Now, that Arctic weather is gone. And so, too, are any doubts about whether Trump would threaten tariffs.

Put IEEPA on your radar ASAP

As Wiley trade attorney Tim Brightbill told Tampa attendees Monday afternoon – as we were all finding out in real time that Canada had received a 30-day tariff reprieve – you should add a new acronym to your vocabulary ASAP. Namely, “IEEPA”, which is short for the International Emergency Economic Powers Act.

IEEPA allows Trump to invoke a national security emergency – with China, Canada, and Mexico, that emergency was illegal immigration and fentanyl. That emergency then allows him to impose tariffs without going through Congress.

And Trump still has all the sections at his disposal too: Section 301 tariffs, which he deployed against China in his first term. Section 232, which he used to hit foes and allies alike with 25% tariffs on imported steel and 10% tariffs on imported aluminum. And let’s not forget good, old-fashioned AD/CVD cases – which walloped some imports of coated flat-rolled steel this week.

Whether you agree that immigration or fentanyl are national security emergencies or not (reasonable people might disagree, and that’s OK), the policy pattern that’s emerging seems clear enough: Use IEEPA to threaten tariffs, extract concessions, and move on to the next region the US might have a beef with.

And Trump has made it clear in public remarks that more IEEPA tariff threats are coming.

Maybe the European Union is next. Trump might say that Europe is not spending enough on defense to support NATO. And that’s a national security threat. Perhaps he’ll single out Taiwan and say advanced semiconductors are a national security threat. The BRICS (Brazil, Russia, India, China, and South Africa) should also have their IEEPA radar active. Because Trump really doesn’t like the idea of them backing a currency that might rival the greenback.

You could hire a political scientist and get them to determine the risk profile of each nation or region from which you might want to source steel. Or maybe Ryerson CEO Eddie Lehner said it best during a thoughtful, heartfelt fireside chat to close out the Tampa Steel Conference on Tuesday – the US is the best risk-adjusted place in the world to do business in.

What’s it mean for foreign steel suppliers?

What’s a mill in Mexico or Canada to do until there is more clarity on tariffs? If you’ve got operations on both sides of the border, maybe you can serve US customers mostly from US mills and customers in your home country from mills there.

If you don’t have operations on both sides of the border, then it might get tricky. Canada, for example, (and as our parent company, CRU, highlighted last week) relies on the US for 90% of its steel exports. There are no good options if tariffs are imposed. Meanwhile, 25% is a lot to “eat” – even if you somehow share some of the tariff with your customers.

This isn’t just a North America story. I’ve heard that major overseas mills have recently pulled offers. Is that because they’re about to increase prices along with US mills? Because of tariff risks? Or both?

What happens downstream?

That brings me to some of the things that Tom Derry, CEO of the Institute for Supply Management (ISM), said about supply chains and potential tariff- or immigration-related inflation.

Automotive companies, for example, already had a very tall task making long-term plans when US policy might swing wildly every four years depending on whether a Democrat or Republican was in the White House. Now, policy is shifting by the day, by the hour, and even by the minute (as we learned this week), often on live TV or social media. How do you make a business plan around that?

In fact, the biggest concern of ISM members is tariffs on imports. That’s not to say that things are grim out there. As Tom noted, manufacturing activity has been picking up recently after tough times in 2023 and throughout most of 2024.

As ISM sees it, the US was in a manufacturing recession for 25 months. That’s historic, even if it didn’t get many headlines. The Great Recession in 2008-09 led to a manufacturing recession of 18 months. (For you history buffs, the recession of 1982 led to a manufacturing recession that lasted for 19 months.) Things should get better from here. Assuming no major shocks.

Manufacturing is a key part of our economy. But it’s a smaller part of it than it used to be. And it should be a more important piece of economic activity going forward, as Eddie noted. That said, and as Tom warned, the one thing you really can’t do in a consumer-driven economy is overwhelm buyers with high prices.

It looks like we’ve gotten a reprieve from expensive beer (whether you like Corona or Molson) and avocados ahead of the Super Bowl. What about a few months from now when it comes to complicated manufactured goods like cars and trucks?

Tim noted that there was a new, radical mood in D.C. A lot can change in a situation like that. Will the Trump administration tear down trade policy as we know it and build back something better? Or will it lead to supply-chain chaos, as we saw during the pandemic shutdowns?

Well, whatever you might think about the president, he has given us no shortage of things to write about.

Scrap survey coming soon to an inbox near you!

SMU will send out its inaugural ferrous scrap survey on Friday. We think you’ll be able to draw a lot of useful insights from it. We also thank those of you who participated (a lot more than we expected!) for your time.

Like our steel survey, our scrap survey will be available only to our premium subscribers. If you’re an executive member, information like this is a great reason to upgrade to premium. And if you’d like to upgrade from executive to premium, please contact SMU Sales Executive Luis Corona at luis.corona@crugroup.com.

And thanks again, from all of us at SMU, for your continued business.

The EAF should achieve a full ramp-up in volumes “roughly 12 months from today,” Mittal said on an earnings call on Thursday.

The announcement and call came alongside the release of the global steel giant’s fourth-quarter and full-year 2024 earnings report and news on the construction of a new electrical steel facility in Alabama.

With weak demand across 2024, ArcelorMittal believes the steel industry is at a cyclical low point. “Headwinds should ease in 2025,” it noted in an earnings presentation, and demand growth is expected.

“Whilst near-term demand remains subdued, inventory levels are low, especially in Europe, so the company is optimistic that restocking activity will supplement real demand improvement, in time,” it said.

Mittal commented that the company will focus on completing the Calvert EAF’s commissioning and completing the electrical steel line before starting on adding a second EAF at Calvert.

The company has been planning to double the capacity at its hot-briquetted iron plant in Corpus Christi, Texas. However, Mittal said they will reevaluate the expansion after completing the Calvert projects. This delay is linked to ArcelorMittal’s decarbonization plans in Europe, which have slowed, awaiting more supportive policy and market environments.

Highlights from the company’s North American operational results are included below.

ArcelorMittal North America

Fourth quarter ended Dec. 31	2024	2023	Change
Net sales	$2,625	$2,942	-10.8%
EBITDA	$289	$437	-33.9%
Flat steel shipments (mt)	1,883,000	2,185,000	-13.8%
Year ended Dec. 31
Net sales	$11,896	$12,978	-8.3%
EBITDA	$1,819	$2,452	-25.8%
Flat steel shipments (mt)	8,022	8,220	-2.4%

The company said declining steel prices were the main cause of lower earnings results for its North American operations.

Volumes continued to recover in Mexico following the months-long shutdown of the Lazaro Cardenas mill last year, the company said. Crude steel production at the mill continued to normalize in Q4’24, with a full recovery in output anticipated in the current quarter.

AM/NS Calvert

Fourth quarter ended Dec. 31	2024	2023	Change
Net sales	$1,010	$1,114	-9.3%
EBITDA	$134	$90	48.9%
Shipments (mt)	941,000	1,015,000	-7.3%
Year ended Dec. 31
Net sales	$4,544	$4,860	-6.5%
Net earnings (loss)	$614	$374	64.2%
Shipments (mt)	4,232	4,469	-5.3%

Weaker demand and lower shipments drove a 4.1% sequential decline in AM/NS’ fourth-quarter sales, while lower costs pushed EBITDA 7.0% higher, according to the earnings report.

Remember, AM/NS Calvert is a joint venture of ArcelorMittal and Nippon Steel.

Domestic HR is now theoretically 9.7% more expensive than imported material, up from 6.6% last week. Recall that US prices were ~12% cheaper than imports last July.

In dollar-per-ton terms, US HR is now, on average, $71/st more expensive than offshore product (see Figure 1). That’s roughly $24/st higher vs. the prior week but still up about $143/st from late July – when US tags were ~$72/st cheaper than offshore material.

The charts below compare HR prices in the US, Germany, Italy, and Asia. The left side highlights prices over the last two years and the right side zooms in to show more recent trends.

Methodology

This is how SMU calculates the theoretical spread between domestic HR coil prices (FOB domestic mills) and foreign HR coil prices (delivered to US ports): We compare SMU’s weekly US HR assessment to the CRU HR weekly indices for Germany, Italy, and East and Southeast Asian ports. This is only a theoretical calculation. Import costs can vary greatly, influencing the true market spread.

We add $90/st to all foreign prices as a rough means of accounting for freight costs, handling, and trader margin. This gives us an approximate CIF US ports price to compare to the SMU domestic HR coil price. Buyers should use our $90/st figure as a benchmark and adjust up or down based on their own shipping and handling costs.

If you import steel and want to share your thoughts on these costs, please get in touch with the author at david@steelmarketupdate.com.

Asian HRC (East and Southeast Asian ports)

As of Thursday, Feb. 6, the CRU Asian HRC price was $445/st, flat vs. the week prior. Adding a 25% tariff and $90/st in estimated import costs, the delivered price of Asian HRC to the US is ~$646/st. As noted above, the latest SMU US HR price is $725/st on average.

The result: Prices for US-produced HR are theoretically $79/st higher than steel imported from Asia – roughly $25/st higher week over week (w/w). The premium is still significantly lower than about a year ago when US HR was as much as $281/st more expensive than Asian products.

Italian HRC

Italian HR prices were just $1/st higher this week at $568/st, according to CRU. After adding import costs, the delivered price of Italian HR is, in theory, $658/st.

That means domestic HR coil is theoretically $67/st more expensive than imports from Italy. With Italian and US tags no longer trending in the same direction, the spread is $24/st higher w/w. Recall that US HR was $297/st more costly than Italian hot band a year ago.

German HRC

CRU’s German HR price was largely flat, also up just $1/st to $569/st this week. After adding import costs, the delivered price of German HR coil is, in theory, $659/st.

The result: Domestic HR is theoretically $66/st more expensive than HR imported from Germany, up $24/st from last week. Stateside hot band was at an $18/st discount about four months ago. At points in 2023, in contrast, US HR was as much as $265/st more expensive than imported German hot band.

Notes: Freight is important when deciding whether to import foreign steel or buy from a domestic mill. Domestic prices are referenced as FOB the producing mill. Foreign prices are CIF, the port (Houston, NOLA, Savannah, Los Angeles, Camden, etc.). Inland freight, from either a domestic mill or from the port, can dramatically impact the competitiveness of both domestic and foreign steel. It’s also important to factor in lead times. In most markets, domestic steel will deliver more quickly than foreign steel. Effective Jan. 1, 2022, Section 232 tariffs no longer apply to most imports from the European Union. It has been replaced by a tariff rate quota (TRQ). Therefore, the German and Italian price comparisons in this analysis no longer include a 25% tariff. SMU still includes the 25% Section 232 tariff on prices from other countries. We do not include any antidumping (AD) or countervailing duties (CVD) in this analysis.

The average lead time for hot-rolled steel is just under five weeks. Tandem product lead times range from six and a half to seven weeks. Plate lead times now average four and a half weeks.

Table 1 summarizes current lead times and recent trends.

Compared to our Jan. 22 market check, all of our lead time ranges have shifted this week:

• Hot rolled: Our range widened from four to six weeks to three to seven weeks.
• Cold rolled, galvanized, and Galvalume: The shortest lead time in each range increased from four weeks to five weeks.
• Plate: The shortest lead time in our range rose from two weeks to three weeks.

Future predictions

The majority of the respondents we surveyed this week (62%) foresee longer lead times two months from now, up from 51% two weeks ago. Just over a third (36%) expect production times to hold steady, down from 47% previously. A small remainder continues to believe lead times could contract further. (The full results of our survey are available here for our Premium members).

Here are some of the comments we collected:

“There must be a little pent-up demand that will cause prices and lead times to increase in the next few months.”

“Prices and lead time usually go in lockstep. As prices increase, lead times are likely to edge out, but I expect movements to be moderate.”

“If prices rise and more orders are placed lead times could extend.”

“As prices go up, mill leads should extend. If they don’t, price increases will not stick.”

“Extending, demand increase with less supply from offshore.”

“I think lead times will extend in the next month and then flatten.”

“We have not been able to get any mill to quote [galvanized] pricing or lead times in the past week. Everyone has been waiting for the market to react to tariffs (and now the lack of immediate tariffs).”

“Too much open capacity currently with more slated to come online.”

“Domestic lead times are still short in historical terms and mills seem hungry too.”

Trends

To smooth out variability seen in our biweekly data and highlight trends, lead times can be calculated on a three-month moving average (3MMA) basis. Through this week, 3MMA lead times for both sheet and plate products saw little movement from January. Overall, 3MMA lead times have trended lower across the past year, flattening out in the last few months, and remaining at or near one-year lows (Figure 2).

The hot rolled 3MMA is now at 4.77 weeks, cold rolled at 6.57 weeks, galvanized at 6.69 weeks, Galvalume at 6.94 weeks, and plate at 4.09 weeks.

Note: These lead times are based on the average from manufacturers and steel service centers participating in this week’s SMU market trends analysis survey. SMU measures lead times as the time it takes from when an order is placed with the mill to when it is processed and ready for shipping, not including delivery time to the buyer. Our lead times do not predict what any individual may get from any specific mill supplier. Look to your mill rep for actual lead times. To see an interactive history of our steel mill lead times data, visit our website. If you’d like to participate in our survey, contact us at info@steelmarketupdate.com.

“You don’t have to look that far. Just look at the headlines on Hyundai Steel,” Tanners said, noting that Hyundai Motor Group is reportedly considering building a sheet steel mill near Baton Rouge, La.

“Why wouldn’t you? If you can’t beat them, join them. Stop fighting over tariffs and just build in Louisiana,” Tanners said. “Louisiana wants you. They want to have those high-pay jobs.”

Storms on the horizon

Tanners said the ongoing ‘sheet storm’ will last until the end of the decade for a few reasons. One is that inventories are high, and demand is struggling against elevated rates. Another is that mills are running at about 74% utilization, meaning there’s a lot of production waiting to come back to the market while more capacity is also being added.

Additional volumes are coming from U.S. Steel’s Big River 2 expansion, Steel Dynamics Inc.’s Sinton ramp-up, and EAF projects at Algoma Steel and AM/NS Calvert.

Rebar is growing as well.

“We have one and a half million tons of rebar added by the end of the year. I don’t see any reason that there’s a surge of extra demand coming for rebar. So you have to have imports reduced,” Tanners said. “Why are you adding capacity that you can’t find a market for?”

Meanwhile, more galvanized steel capacity will be coming online as well.

“One of the reasons I think our numbers are lower than others in the market is because we assume galv margins are going to be lower for longer,” Tanners said. “Because you can’t add that much galv supply. There’s not that much of galv demand, considering how much is coming to market. I think a couple years ago, when galv margins blew out, everyone and their mother, to be cliche, decided to add a new galv line, and it’s all coming in at once.”

On the raw materials side, there’s expected to be about 10 million tons of extra scrap/scrap substitute demand by the end of the year.

“That’s a lot of scrap,” Tanners noted. “The US is already only a 70-million-ton market, so you’re talking 15% more.”

“This is a rare occurrence that was isolated to a small area of the plant, and there is no risk to the community,” she added.

The Pittsburgh-based steelmaker stated it followed all safety and environmental protocols and is conducting a thorough investigation.

“Some employees were taken to a local hospital where they underwent evaluations. They were released and allowed to return to work,” the spokeswoman said.

She noted that over the last five years, U.S. Steel has invested over $750 million in improvement projects at its Mon Valley Works facilities. This includes roughly $100 million annually being spent at the Clairton facility on environmental compliance.

“The increase is applicable to all new spot orders and all recent quotations that have not yet been accepted by AMUS—AM/NS Calvert. We reserve the right to modify any outstanding quotations,” the company said in the letter.

Recall that AM/NS Calvert is a joint-venture sheet mill between Luxembourg-based ArcelorMittal and Japan’s Nippon Steel. It is located in Calvert, Ala.

The company in addition said in the letter that it was accepting March contract orders for HR and April orders for tandem products.

ArcelorMittal also announced a hefty price hike at ArcelorMittal Dofasco, its sheet mill in Hamilton, Ontario.

The target prices at Calvert are well above where SMU assessed spot prices earlier this week. We’re at $725/st on average for HR, $950/st on average for CR, and $910 on average for galvanized base. We’ll next update prices on Tuesday.

Negotiation rates by product

Negotiation rates were highest this week on coated and plate products, while hot-rolled and cold-rates slipped to multi-month lows (Figure 2). Negotiation rates by product this week are:

• Hot rolled: 56%, down 14 percentage points from Jan. 22 and the lowest rate seen in 10 months.
• Cold rolled: 62%, up two percentage points (previously at a 10-month low).
• Galvanized: 79%, down seven percentage points and the lowest rate seen since last September.
• Galvalume: 82%, down six percentage points to a three-month low.
• Plate: 83%, up one percentage point (previously at a two-month low).

Steel buyer remarks:

“EAFs negotiable [on hot rolled], integrated mills are not.”

“Only negotiable on larger coated orders.”

“[Hot rolled] is already at the lowest point and will now start to rise.”

“Dependent on [hot rolled and plate] grade/thickness, still holes out there.”

“Mills seem to be firmer than previous months.”

“Tonnage still moves the needle.”

“Yes [on plate] but with much less wiggle room.”

“I’ll still say negotiable [on plate], but they’re actively in ‘try to raise price’ mode too.”

Note: SMU surveys active steel buyers every other week to gauge their steel suppliers’ willingness to negotiate new order prices. The results reflect current steel demand and changing spot pricing trends. Visit our website to see an interactive history of our steel mill negotiations data.

Looking at the historical curve changes from Dec. to Feb 3, there has been a modest shift, with a delta of $50 per short ton (st). This reflects a rate of change of $25/st per month, equating to a 3.3% change per month when considering M1 futures prices.

While one might expect more substantial fluctuations in times of heightened market stress – especially with tariff headlines in the mix – the HRC market has yet to see significant volatility. The underlying HRC Index has remained below $700/st, aside from the potential print expected this Wednesday.

Absent major price action, especially outside of trades from H2’25, the market is still seeking a clear catalyst. However, it’s important to note that futures markets are quick to react to new data points, and a shift could occur with little notice.

CME HRC commodity curve structure change Dec. 10, 2024. to Feb. 3, 2025

Source: Bloomberg

One significant factor driving the strength at the back end of the curve is Feb.’25 scrap strength, a result of winter weather conditions and limited mill flows. Prime scrap for Jan.’25 rose approximately $20/st.  Feb.’25 physical trades are in the midst of negotiations which basis price action in BUS & BCH indicate further strength. 

Tariffs remain a key focus, but as yet, there have been no significant price movements in the physical market. Cleveland-Cliffs’ offer level remains steady at $800/st, as first published on Dec. 13, while Nucor raised its offer by $15/st on Feb. 3, to $775. Considering the short month of February, a $44/st average on the weekly CRU print will be needed to bring futures and index prices in line.

An interesting development is the relationship between Chicago and Midwest Busheling contracts. Since January 2019, the spread between these contracts has fluctuated between -$7.91 per gross ton (gt) (Chicago over Midwest) to +$40.97/gt (Midwest over Chicago).

Currently, the spread stands at approximately $15/st, with Midwest Busheling priced higher than Chicago futures. This dynamic presents a potential opportunity for market participants to capitalize on shifts in these spreads.

CME BUS/BCH curve structure Feb. 3, 2025

Source: Bloomberg

For those looking to trade futures, the BUS/BCH arbitrage strategy stands out as a potential avenue to express a view on the expansion or contraction of underlying price spreads. Additionally, positioning a BUS/BCH trade against the HRC market could allow participants to capture the mill spread, providing a further layer of potential profitability.

In summary, the market remains relatively quiet. However, there are underlying shifts that present opportunities for those willing to watch the futures pricing closely. The interaction between CME HRC and CME Busheling contracts is likely to evolve further, as traders monitor the changing dynamics of the scrap and tariff landscape. With a few key developments still on the horizon, the market could see significant movement should these factors trigger a more pronounced shift.

CME HRC – CME BCH price curve Feb. 4, 2025e

Source: Bloomberg

Marex CDD Report Disclaimer:

This report was approved and issued by Marex Financial, a company within the Marex group. Marex Financial is incorporated under the laws of England and Wales (company no. 5613061 and VAT registration no. GB 872 8106 13), is authorised and regulated by the Financial Conduct Authority (FCA registration number 442767) and is a member of the London Stock Exchange. Marex Financial’s registered address is at 155 Bishopsgate, London, EC2M 3TQ. Nothing in this report constitutes (i) an offer of services, (ii) an offer to purchase or sell investments or any other product or (iii) investment, tax or legal advice. The report has been approved and issued on the basis of publicly available information, internally developed data and other sources believed to be reliable. It has been prepared for the general information of Marex’s institutional clients, is not directed at retail customers and does not take into account particular investment objectives, risk appetites, financial situations or needs. Recipients should make their own trading decisions based upon their own financial objectives and financial resources. This report is a marketing communication. It is not investment research and has not been prepared in accordance with legal requirements designed to promote investment research independence. The report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Whilst reasonable care has been taken to ensure that facts stated are fair, clear and not misleading, Marex does not warrant or represent (expressly or impliedly) their accuracy or completeness. Any opinions expressed are those of the author of the report as at the date of the report and not necessarily those of Marex and, in any event, may be subject to change without notice. Marex accepts no liability whatsoever for any direct, indirect or consequential loss or damage arising out of the use of all or any of the data or information in this report. This report is not intended to be an offer to buy or sell any securities of any company referred to herein nor any other transaction or investment. This report is not intended for use by any other person than the addressee. If you are not the addressee, please delete it and immediately notify the Group Compliance department at Marex. This report may not be distributed in any jurisdiction where its distribution may be restricted by law. Additional material relating to any security, transaction or investment referred to in the report may be made available on request. No part of this report may be redistributed, copied or reproduced without the prior written consent of Marex. You must not distribute any part of this report to any other person without attaching a copy of this information.

The ArcelorMittal Calvert plant will have an annealing pickling line, cold-rolling mill, annealing coating line, packaging and slitter line, and other specialized equipment. It will be wholly owned by the Luxembourg-based steel conglomerate.

Production is slated to begin in 2027. The mill will be able to make up to 150,000 metric tons (165,350 short tons) of non-grain-oriented electrical steel (NGO or NOES) each year, ArcelorMittal said.

NOES production is highly technical, requiring advanced manufacturing capabilities and demanding quality control. The steel produced has magnetic and mechanical properties that must meet precise specifications. It is considered a critical material for the production of electric vehicles and other energy applications.

The NOES market is in a deficit, CEO Aditya Mittal said on an earnings call on Thursday. He noted the 150,000 mt of output at the Calvert facility will basically cover import volumes.

He also stressed that the market continues to grow, as NOES goes into both all-electric and hybrid vehicles.

Securing domestic supply chains

Various stakeholders praised the project for promoting job creation, spurring economic growth, reducing imports, and ensuring a solid domestic supply of high-quality NOES.

“We recognize the importance of creating a resilient, sustainable domestic supply chain for this critical material,” said John Brett, CEO of ArcelorMittal North America. 

Peter Leblanc, ArcelorMittal North America’s chief marketing officer, highlighted how the mill will help its customers solve their supply chain challenges “by providing a steady domestic supply of high-quality NOES, enabling them to produce superior products and avoid material shortages, extended lead times and cost volatility associated with overseas supply chains.”

Alabama Senator Katie Britt praised the project for strengthening the state and nation’s national security capabilities, commenting that “Onshoring critical supply chains is imperative to fuel a powerful new era of Made in America excellence.”

ArcelorMittal expects to create up to 1,300 jobs during the construction phase and the completed mill to have over 200 permanent positions.

Recall that the tariff implementation received a commutation rather than a full pardon from President Trump over the weekend. 

Both Mexico and Canada offered up enough proactively on immigration and drug enforcement to earn a stay of execution. 

It is only 30 days, but most players do not think tariffs will rear their heads again that soon. It remains to be seen if 10% tariffs on China will be active for very long. 

The general question is whether an increase of $20/gt was enough to draw out the necessary tons in a scrap-short, underpriced, and logistically challenged mid-winter marketplace. 

There are several organizations predicting an increase of $30-50/gt. Meanwhile, a few steelmakers are saying they would rather cut back production than pay more than up $20 for steel scrap.   

Now that the initial bids have been offered, it will be interesting to see if these healthy price jumps permeate throughout the other steelmaking districts.

For the full-year 2024, shipments stood at 86,130,780 st, down 3.6% from 89,338,472 st the previous year.

Comparing full-year 2024 shipments to full-year 2023 shows: cold-rolled sheet, up 3%; corrosion-resistant sheet, unchanged; and hot-rolled sheet, down 7%.

China immediately retaliated with tariffs on US products: 15% on coal and liquefied natural gas and 10% on crude oil, agricultural machinery, and large-engine cars. On Wednesday, it went further and took its complaint to the World Trade Organization, requesting dispute consultations with the US over the new levies.

Stakeholders across the steel and manufacturing supply chains spoke out after Trump’s Feb. 1 executive order announcing the Feb. 4 tariff start. Some companies and associations cheered the tariffs, while others couldn’t hide their frustration with them.

The situation remains fluid, but here’s a roundup of where some stand… for now.

North American steel associations

The American Iron and Steel Institute (AISI), the D.C.-based trade group representing some but not all American steelmakers, said it supports the tariffs on China.

“Tariffs are a legitimate tool for governments to use to boost manufacturing and address a range of difficult and important issues,” AISI President and CEO Kevin Dempsey told SMU. “My hope is that the governments of the three USMCA countries will continue to work together to address the challenges we all face.”

And China is one of those common challenges. AISI has long called attention to its unfair trade practices that harm US steel producers.

“We appreciate the administration’s commitment to addressing the challenges from China and support the president’s tariffs on China and his America First Trade Policy to address these issues, especially the growing problem of transnational subsidies,” Dempsey said.

The Canadian Steel Producers Association and Mexico’s steel chamber Canacero expressed deep frustration with Trump’s tariffs, lamenting the disruption they’d cause to the highly integrated North American supply chains.

Largest US steelmaker is vocal

Nucor, the largest American steelmaker, cheered the tariffs after the executive orders were signed.

“Nucor applauds the first steps taken by President Trump in his America First Trade Agenda. We look forward to working with President Trump to enforce our trade laws and strengthen American manufacturing!” said a Feb. 1 statement signed by Leon Topalian, Nucor’s chair, president, and CEO.

Manufacturers

Many organizations opposed to tariffs believe they will have far-reaching negative impacts on the highly integrated North American supply chains – the very ones that have allowed US manufacturers to be globally competitive, pointed out Jay Timmons, president and CEO of the National Association of Manufacturers (NAM).

Timmons said manufacturers would bear the brunt of the tariffs.

“The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs,” he added.

NAM said it stands ready to work with Trump on “a trade strategy that reinforces American strength — holding bad actors accountable while preserving the gains of the successful USMCA and advancing policies that sustain manufacturing growth here at home.”

Similarly to NAM, the United Steelworkers (USW) called for a reconsideration of tariffs on Canada to maintain the stability of industries and supply chains.

The Association of Equipment Manufacturers (AEM) said the tariffs jeopardize American competitiveness.

“Levying tariffs on goods that US equipment manufacturers depend on not only jeopardizes the President’s agenda, including the Trump administration’s plan for a stronger, more competitive America, but drives up costs for U.S. equipment manufacturers, disrupts our supply chains, and exposes our customers to retaliatory tariffs,” commented Kip Eideberg, AEM senior vice president.

Appliance

The Association of Home Appliance Manufacturers (AHAM) said in an email to SMU that it fully supports “a strong, integrated North American market, including a revised USMCA.”

With millions of people relying upon its members’ appliances every day, AHAM said it is monitoring the details of all proposals. “Just as people in every home depend on their appliances, manufacturers are relying on lawmakers to develop common-sense policies that enable innovation,” it added.

Automotive

Aggressive tariff action is a good first step in protecting American manufacturing jobs, according to the United Auto Workers (UAW). However, “we do not support using factory workers as pawns in a fight over immigration or drug policy.”

“If Trump is serious about bringing back good blue-collar jobs destroyed by NAFTA, the USMCA, and the WTO, he should go a step further and immediately seek to renegotiate our broken trade deals,” the union commented.

“Any tariff action must be followed with a renegotiation of the USMCA, and a full review of the corporate trade regime that has devastated the American and global working class,” UAW stated.

According to the Alliance for Automotive Innovation (AAI), the “seamless” North American automotive trade generates $300 billion in economic value.

“It not only keeps us globally competitive, it supports auto industry jobs, vehicle choice and vehicle affordability in America,” added AIA President and CEO John Bozella in a Feb. 1 statement.

The Canadian Vehicle Manufacturers’ Association (CVMA) opposes the levies and said every effort should be made to avoid their implementation.

“Tariffs on vehicles and parts will reduce North American vehicle production, increase vehicle prices, and lead to job losses at manufacturing facilities across the continent,” said Brian Kingston, CVMA president and CEO.

Construction

The Associated General Contractors of America (AGC) is concerned about the tariff situation. With over 27,000 member firms, the association bills itself as the voice of the construction industry.

“Increasing the cost of a range of construction materials will prompt contractors to raise bid prices, potentially undermining future demand for projects,” commented AGC CEO Jeffrey Shoaf.

He said AGC is working to explain to the new administration the negative impacts inflation has had on the construction industry, particularly over the last few years.

“Hopefully, the administration will be able to rapidly resolve the underlying concerns driving the new tariffs so our members can help build an even stronger economy,” said Shoaf.

Raw materials

The US recycling industry is a net exporter that helps to reduce the US trade deficit, said the Recycled Materials Association (ReMA), pointing out that “US recyclers benefit greatly from the North American market access that the USMCA provides, access that these tariffs will put at risk.”

“Each year, more than $8 billion in recycled materials cross the U.S.-Canada border, while nearly $3.3 billion of recycled products cross the U.S.-Mexico border,” said ReMA President Robin K. Wiener.

“These new tariffs, and any retaliatory measures they may provoke, will only reduce the competitiveness of our industry and the manufacturers that rely on recycled materials,” Wiener warned.

“SSAB Americas reserves the right to re-quote any open offers not confirmed by an SSAB order acknowledgment. All other terms and conditions of sale remain unchanged,” the letter read.

The move comes after SSAB announced an increase of at least $60/st last week, mirroring Nucor’s increase made earlier that week.

Plate prices stand at $910/st on average this week, a $10/st increase from last week and a $65/st rise compared to two weeks ago in response to repeated mill price hikes, according to SMU’s interactive price tool. You can also track mill price announcements here.

SSAB Americas is a subsidiary of Swedish steelmaker SSAB. The company operates plate mills in Mobile, Ala., and Montpelier, Iowa.