The Steel Manufacturers Association (SMA) held a press conference Thursday to discuss the state of the US steel market, featuring remarks from Dave Sumoski, SMA Chairman and EVP at Nucor; Mark D. Millett, SMA vice-chairman and Co-Founder, President and CEO of Steel Dynamics, Inc.; Tracy Porter, SMA immediate past chairman and EVP at Commercial Metals Company; and Philip K. Bell, SMA President.
The conference focused mainly on trade and tariffs, with Sumoski noting an increase in circumvention probes and trade law enforcement. “I’m pleased with the outcome so far,” Sumoski said, adding that he considers enforcement of coated sheet products a “high priority to keep an eye on.”
When asked whether market conditions still require the “open-ended” Section 232 tariffs to remain in place, Bell said the underlying factors that led to Section 232 still exist: global excess capacity, foreign government subsidies, and “bad actors.”
Bell said it’s “undeniable” that tariff measures in places are helpful, increasing capacity utilization and increasing the amount of investment for capital expansions. Plus, Bell said, tariffs have kept imports down.
When asked about overcapacity, both globally and within the US market, Millett disputed that there was overcapacity in the US, noting that the US is one of the countries in the world with an inadequate domestic supply of steel, which explains the “high level of imports.” Millett said growth in the US is 1-2% year-over-year, and there is “ample demand to absorb the additional capacity.
As for the overall economy, Millett said there is still an uncertainty hanging over the US “for a variety of reasons,” but the two largest steel consuming industries—construction and automotive—are “increasingly healthy.”
However, Millett noted that industrial manufacturing is struggling, along with the energy sector, and he doesn’t see an improvement in demand until 2020. Porter said that if legislators could get an infrastructure bill through congress, that would help with demand.