U.S. steel prices are rising due to announced tariffs, now exceeding $900 a ton, reflecting a nearly 25% increase this year. Domestic prices have surpassed import prices as producers leverage tariff uncertainties. The influx of imported steel continues despite reduced demand owing to high borrowing costs, while Canadian and Mexican producers face order pressures amidst market oversupply.
Recent tariff threats from U.S. President Donald Trump are significantly increasing costs for U.S. buyers of steel. Anticipating a forthcoming 25% levy on imported steel, domestic steel prices have surged to $900 per ton, marking almost a 25% rise this year. Analysts indicate that this increase has pushed U.S. prices higher than imported steel prices, contradicting Trump’s intended outcomes.
Major steel producers, such as Nucor Corp. and U.S. Steel Corp., have reacted to these tariff rumors by elevating their prices. Currently, domestic hot-rolled coil steel is over 23% pricier than imported steel. While steel imports from countries like Malaysia and Vietnam continue to flow into the U.S., domestic demand remains sluggish due to high borrowing costs affecting construction and manufacturing projects.
Simultaneously, Canadian and Mexican steelmakers are declining new orders from customers due to increased pressure on their order books. The Canadian Steel Producers Association emphasizes the industry’s dependency on U.S. exports amidst a saturated global steel market. As the U.S. represents the dominant market for Canadian steel, industry players face difficult pricing discussions that benefit neither side under the current tariff climate.
In summary, tariff threats from President Trump are contributing to an escalation in domestic steel prices, increasing costs for U.S. consumers and impacting import strategies from international suppliers. With a stagnating domestic demand coupled with high production costs, the volatility in the steel market presents a significant challenge for both manufacturers and consumers alike as they navigate the implications of these tariffs.
Original Source: www.thestar.com.my
