SMU Data and Models
Will the New NAFTA Be Good for Your Business?
Written by Tim Triplett
October 8, 2017
Steel buyers and sellers appear evenly split on whether the renegotiation of NAFTA will benefit their companies. Responses to Steel Market Update’s market trends questionnaire, emailed to several hundred steel executives earlier this week, suggests that most companies don’t really know if the new NAFTA being pursued by the Trump administration will be good for their businesses.
More of their comments were negative than positive, however:
· “Some of my final customers supply to Mexican manufacturing, which comes back to the U.S. They are very concerned about NAFTA as they feel any change will be negative for their business.” Trading Company
· “If it means higher steel prices, that will be bad for our business because we are competing against similar products made of other materials.” Manufacturer/OEM
· “Unintended consequences will occur if NAFTA is changed.” Manufacturer/OEM
On a more positive note, one service center executive said, “Ross Perot nailed it! And in a decade Mexico built a middle class. Unfortunately, it was a big chunk of ours.” Said another service center, “It should hopefully lead to more manufacturing in the U.S.” Agreed a manufacturer, “but only if Canadian steel products are taxed coming into the U.S.”
Several expressed doubts about the ability of the Trump administration and its trade negotiators:
· “I see it as a non-event, given the current government’s ineffectiveness in moving any initiatives.” Service Center/Wholesaler
· “NAFTA seems to neither hurt nor help us, and I lack confidence in the current administration.” Manufacturer/OEM
· “Nothing the U.S. government has done is good for our business. We all drank the Kool-Aid and we all look stupid.” Service Center/Wholesaler
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
SMU survey: Buyers say mills less willing to negotiate lower sheet prices
Steel buyers report that mills are less willing to talk price on new sheet orders than they were in weeks past, according to our most recent survey data. In contrast, mills’ willingness to negotiate on plate products remains relatively high, now at the second-highest rate of the year.
SMU survey: Steel Buyers’ Sentiment slips to 16-month low
SMU’s Current Steel Buyers’ Sentiment Index fell further week, now at the lowest reading recorded since October 2022
February imports ease from seven-month high
After reaching a seven-month high in January, steel imports fell back 3% in February, according to preliminary Census data released earlier this week.
HR vs CR price gap continues to increase
The dollar premium cold-rolled coil (CRC) carries over hot-rolled coil (HRC) continues to expand according to our latest scope of the market.
Manufacturing indicators hold stable since start of year
Data on US industrial production, capacity utilization, new orders, and inventories remained overall steady and strong through January and February figures, indicating a healthy manufacturing sector. The strength of the manufacturing economy has a direct bearing on the health of the steel industry.