The Trump administration announced yesterday that it would be delaying its decision on Section 232 tariff exemptions until June 1, but many sources close to SteelOrbis say they believe that quotas may be used in place of tariffs.
The reduction in imports, a source said, could prove to be disastrous in the last months of the year.
“South Korea is already dealing with quotas, and if we’re looking at quotas for Argentina and Brazil, that’s bound to cause some hiccups in the supply chain,” a source said. “The fourth quarter could be a mess. Tariffs are one thing, because yes, we’d all need to pay more, but the supply would still be there. But quotas could really mess up the market, especially toward the end of the year. If people think domestic pricing is high now, just wait until that plays out.”
Current domestic pricing for US J55 ERW casing, he said, which is being heard in a range that spans from $60-$70 cwt. ($1323-$1543/mt or $1200-$1400/nt), could spike to “unprecedented levels if quotas become the law of the land.”
Another source agreed.
“No matter which way you slice it, you’d be talking about a lot of steel that can’t come in. This isn’t about people running around trying to warn that the sky could be falling,” he said. “If you look at the numbers and you assess what’s going to happen if quotas are put in place, things are pretty clear. Quotas cause shortages. That’s what they’re designed to do.”
Looking offshore, the most recently heard J55 ERW OCTG casing pricing from Taiwan in the US domestic market was heard at $50.00-$51.25 ($1102-$1130/mt or $1000-$1025/nt), DDP loaded truck in US Gulf coast ports, which includes the current Section 232 tariff, however, most offshore mills are not currently offering to the US due to current market uncertainty.