NEW YORK — Russel Metals expects that action on the Section 232 investigation into steel imports may have been pushed out as far as November, according to one of the company’s top executives.
“It looks like the (232) can has been kicked down the road, maybe as far as November,” John G. Reid, president and chief operating officer of the Mississauga, Ontario-based distributor—which operates in Canada and the US—said during an earnings conference call on Aug. 3. “I know the G20 (Group of 20) has asked for it to be held that long for them to look at it.”
Indeed, the G20 is expected to announce policy solutions to combat global steel overcapacity by November, following enhanced information sharing and cooperation in August among members of the Global Forum on Steel Excess Capacity, the group said last month.
If the Section 232 probe does result in limitations on imports into the United States, then the nation’s neighbors to the north and south will be impacted, according to Reid.
“If something goes through, Canada will have to look quickly at how they’re going to manage it,” he said. “If (imports) are blocked out of the US, obviously Canada and Mexico become the next routes that are available to bring things into North America.”
When asked about the potential impact of the Section 232 delay on steel prices, Reid said: “Depending on how far it’s pushed down the road, (prices) would be flattish. You might see a slight drop, but I don’t see anything dramatic in either direction.”
However, “at this point, we just don’t know where it’s going, so we’ll continue to manage our business and turn our inventory as normal,” he said. “We’re not taking any long or short positions on that.”
Last month, after President Donald Trump implied that a final decision on the Section 232 investigation should no longer be expected imminently, an analyst predicted that the delay could put downward pressure on steel prices. However, hot-rolled coil prices remained sideways the week ended Aug. 4 after jumping in late July and early August as mills continue to push for higher prices.
National Trade Council director Peter Navarro recently said that the Trump administration is gearing up to deliver "amazing actions" on trade policy in the next six months, despite the delay in the Section 232 investigation results.