The Section 232 tariffs have supported a recovery in the US steel market - promoting higher domestic prices, creating “a more level playing field” and driving investment in the US steel industry, according to David Burritt.
“Our domestic industry is recovering from years of unfair trading practices and global overcapacity in large part because of 232 trade remedies that have allowed us to reinvest in our businesses for companies in the United States,” Burritt, who serves president and chief executive officer of U.S. Steel, said on Tuesday May 7.
Since the 232 tariffs were implemented, “the domestic industry has been invested in new technology, research and development, and our people,” he explained.
Looking forward, the steel industry should continue to advocate for “free and fair” trade, but also must address the challenges of an aging work force, changing technologies and societal expectations for environmental stewardship, according to Burritt.
Indeed, U.S. Steel this month announced plans for a more than $1-billion investment, to install a new sustainable endless casting and rolling facility at its Edgar Thomson Plant, along with a co-generation facility at its Clairton Plant – both part of the company’s Mon Valley Works.
Burritt said the investment will add a new facility to expand the company’s current production line to “compete and win in the most attractive markets.”
“This includes cutting-edge, advanced-high-strength steels currently in demand by automakers to reduce vehicle weight [and] meet federal fuel efficiency environmental standards,” according to a video showcased by Burritt during the AISTech event.
But U.S. Steel does not intend to add more steel capacity to the domestic market, Burritt said in response to a delegate question, noting that the investment will allow the company to close the hot-strip mill at its Irvin Plant, also part of Mon Valley Works.
In the months after the Section 232 tariffs against imported steel were implemented, the price for domestic hot-rolled coil surged to a nearly 10-year high - in turn supporting domestic steelmakers in restarting idled capacity and planning new projects.
Several sheet expansions have been undertaken or announced by US mills, which Fastmarkets AMM estimated could boost US flat-rolled capacity by up to 16.5 million tons per year through 2022.
Mills produced 33,698,000 tons of crude steel in the year through May 4, operating at an average capacity utilization rate of 81.7%; that is up by 6.6% from 31,610,000 tons at an average capacity utilization rate of 76.4% in the same period last year, according to data from the American Iron and Steel Institute.
But hot-band prices have since moved downward to levels not seen since before the tariffs were announced, weighed down in part by the additional capacity - and perhaps reflecting a correction after mills “pushed too hard, too fast” during last year’s price surge, sources told Fastmarkets.
Fastmarkets AMM’s daily US Midwest hot-rolled coil index ended Monday May 6 at $31.89 per hundredweight ($637.80 per short ton), down by 27.3% from $43.87 per cwt one year earlier.