voda schreef op 19 juni 2019 15:41:
Trump Trade War - Section 232 Tariffs Plummeting US Steel Exports
Market Realist reported that in its Section 232 steel probe, the Commerce Department pointed to the high steel import to export ratio. It emphasized the subsidized steel in other countries that makes US steel exports to those countries uncompetitive. Now, while US steel imports have fallen after the Section 232 tariffs, we’ve seen a steeper fall in US steel exports. The most recent data suggests that US steel exports fell more than 30% YoY in March and April.
The Commerce Department also pointed to lower US steel prices as a result of global overproduction. While US steel prices rose sharply in the first half of 2018, they have now fallen below the price levels when the tariffs were announced. In short, Section 232 tariffs haven’t helped in a sustainable rise in US steel prices. The Commerce Department also pointed to US steel companies’ poor earnings. After last year’s spike wherein both Nucor and Steel Dynamics reported record earnings, all steel companies including US Steel and AK Steel are expected to post a yearly fall in their 2019 earnings. Having said that, despite lower earnings, steel companies are still financially sound, and the current scenario is much better than in 2015 when companies like U.S. Steel posted negative EBITDA in the fourth quarter.
The tariffs only provided a temporary high to US steel companies’ earnings. After the exemption for Canada and Mexico, we’ll likely see higher steel imports from these regions. Moreover, US steel companies, especially Nucor and Steel Dynamics, are aggressively adding capacity, which could prove problematic if steel imports don’t fall more from these levels.
Source : Market Realist