In every market there are ebbs and flows of normal market conditions, but once prices rise all producers need to produce more because there is more money to be made, then there is a surplus and prices fall. In every market as long as it is reasonably healthy, there is expected demand that should be needed, then there is government incentives to do more. For example, the previous Biden government passed the Infrastructure Act to repair and replace bridges and roads and other things needed for cement, steels and asphalt. This would tend to push up demand for the products as the ability to do the work comes forth. The Infrastructure Act has helped steel prices rise, which is good for the industry.

President Trump has imposed tariffs on steel and aluminum, which he said he would and thinks it would be a good idea. With all ideas, there are some positives and negatives.

One side effect is what should the non-domestic exporters do? In an article by Heekyong Yang and Byron Kaye of Reuters, two South Korean steelmakers are considering investment options in the US, while Europe’s steel mills warn of a flood of surplus metals.

The 2 companies are POSCO and Hyundai Steel. A steel maker needs a base of customers to support it operations, however Hyundai Steel is considering a plant in southeast US. POSCO is looking at both India and the US for upstream steel processes.

In Europe, the expectation is if the US market is closed off, steel that would be sent to the US would go to Europe. The biggest steel maker in Europe is Thyssenkrupp Steel, and they said it would not be good for Europe in the long term. Another Germany steel maker, Salzgitter said protective measures in Europe would be needed immediately.

Luxembourg-based Aperam called for talks because neither the company nor its US customers would benefit from a prolonged trade conflict.

Austria’s Voestalpine said its revenues would fall and it is having discussions about price increases.

ArcelorMittal, the world’s second largest steelmaker, has operations in the US and plans to ramp up production.

Australia’s BlueScope produces 3 million tonnes of steel a year at its plant in Delta, Ohio says with higher steel prices, it will be good. In 2022, it spent $700 million to increase production with the help of the State of Ohio and local economic development agencies.

Late last year, Japan’s Nippon Steel wanted to buy US Steel, but was only allowed an investment.

The largest steel maker in the world is China Baowu Group with made 13,284 million tonnes of steel, then ArcelorMittal with 6,889 followed by China’s Ansteel Group with 5,565, Nippon Steel of 4,437 and Shagang Group of China 4.4145 and HBIS of China 4,100. The US companies are Nucor Corp with 2,060, Cleveland-Cliffs 1,680 and US Steel 1,449.

Linking to dividend paying stocks, with all government policies there are advantages and disadvantages and some unintended consequences. Tariffs may sound good, but all industries have their complexities which is why companies like stability.

There are more questions than answers, till the next time – to raising questions.