The Association of Washington of Business (https://www.awb.org/) toured us yesterday & we are featured (at 1:52) on their latest video.
*Update on the steel industry and section 232. *
The section 232 quotas and tariffs that first threatened our industry in the first quarter of 2018 had a steep price on steel supplies, both in terms of pricing and lead times. Although pricing climbed steeply through the second quarter it has remained steady over the last few weeks. This is not expected to continue.
On June 1st tariffs and quotas on Canada, Mexico and other NAFTA countries went into effect. There is now a 25% tariff on hot roll steel products and a 10% tariff on aluminum products from these countries. Canada accounts for about 40% of the import for US suppliers.
Industry experts had been thinking that pricing and lead times would begin to soften a bit through the summer as they typically do. However, with this new development they are changing their stance on this. Right now, it is looking like we will see another round of price increases. Beam mills have already increased pricing by 5.00/CWT. Domestic mills have imposed higher transportation costs across the country. We could be looking at another 6.00-10.00 per CWT increase through the summer months. If Canada holds true to its threat of retaliatory tariffs on imports from the US beginning July 1st, we could see even higher increases.
The immediate affect will likely be longer lead times for hot roll and aluminum products as suppliers are not going to want to quote material until they know what is going to happen over the next month. We, at Greer, are dedicated to providing our customers the best service and products. We will continue to do what we can to keep costs down for our customers. And continue to keep you informed with what is going on in our industry.
*David Kapla * *General Manger Greer Steel Inc. *
Dear valued customers,
We wanted to alert you to a recent development in the steel industry.
On Friday, February 16th, Secretary Wilbur Ross released the U.S. Department of Commerce report detailing the impact to our national security from imports of steel mill products. This investigation was carried out under Section 232 of the Trade Expansion Act of 1962. The Department of Commerce found that the quantities and circumstances of steel imports “threaten to impair national security” as defined by Section 232.
President Trump has until April 11th to make a ruling on the recommendations of Secretary Ross. The recommendations include tariffs and quotas on imported steel which could raise steel prices significantly. Although a final decision has yet to be made, the report has caused new challenges in the steel market. Some mills are not taking new orders, while others are not quoting prices. There also has been speculation that some products may be subject to allocation.
Because of the uncertainty regarding both price and availability, Greer Steel Inc. reserves the right to review all existing quotes prior to acceptance of an order. Acceptance of orders will be based on the best available market information. We understand this impacts your business as well as ours and we will do our best to mitigate the impact of these market disruptions.
Greer Steel Inc. will continue to communicate further developments in the current market. Thank you for your business and we look forward to working with you.
*David Kapla *
*General Manager Greer Steel Inc*