CHICAGO — Nucor Corp.’s top executive suggested that President Donald Trump's administration might disappoint the steel industry with its Section 232 investigation into steel imports.
Chairman, chief executive officer and president John Ferriola said during a second-quarter earnings conference call on July 20 that the Charlotte, N.C.-based steelmaker has lobbied in Washington for a “broad-based” Section 232 ruling that includes virtually all steel products from nearly all regions of the world.
But he indicated that the chances of the Section 232 remedy taking that form are not as great as Nucor might like them to be.
“My take on it, frankly, right now, is that it’s probably not going to be everything we hope it to be. But it’s certainly going to be more than we have right now,” Ferriola said.
The prospects for a “holistic” approach to addressing trade issues, as opposed to traditional anti-dumping and countervailing duty cases, are better now than in the past, because Washington has reached a consensus that imports pose a threat to both the economy and national security, Ferriola said.
And “even failing that (Section 232 investigation),” Nucor expects to see continued success on trade cases, such as one it filed vs. foreign cut-to-length plate from 12 nations, Ferriola said. And he stressed the company had “absolutely not” predicated any of its recent investments on receiving trade relief from the government.
“We work on what we can control. ... We can influence what happens in Washington—we cannot control it,” Ferriola said. “The things that happen over the next couple of months in terms of what comes out of Washington ... to me, that is the icing on the cake, that’s gravy.”
That’s because Nucor is seeing stable demand on the nonresidential construction front and improving demand from residential construction—and thus for the appliances new homeowners need.
The company is also continuing to make gains against its competitors in an automotive market that Ferriola acknowledged had plateaued and might be slowing. “We will be getting a bigger share of a smaller pie,” he said.
Ferriola also predicted that scrap prices would be stable in the coming months.
Nucor’s fate doesn’t hinge on the outcome of the Section 232 probe, but it does expect results from the Trump administration, Ferriola said. “President Trump has made some commitments to us. And we expect him to stand behind those commitments,” he said.
Section 232 is part of the Trade Expansion Act of 1962. The Trump administration initiated the Section 232 case against steel imports in April. A separate case was launched into aluminum imports.
The US Commerce Department by law has 270 days from the start of the case to conclude a report determining whether imports threaten national security and—if they are deemed a threat—proposing actions to curtail them.
Commerce initially said it would come to a decision by the end of June. Market sources are now telling AMM they are largely in the dark as to what action will be taken, and when.