The US Commerce Department's Section 232 investigation into the impact of steel imports on national security will result in a positive finding for domestic steelmakers, Nucor's chairman, CEO and president, John Ferriola, predicted in an interview with S&P Global Platts.
"I'm confident that the Commerce Department will come out with a different finding [than the steel-related investigation in 2001] simply because of the [current] threats of global steel overcapacity and the resulting surge of illegally traded imports," he said Monday night.
In 2001, Commerce investigated the impact of iron ore and semifinished steel imports under Section 232 of the Trade Expansion Act of 1962, but recommended no action.
Ferriola's confidence in a favorable recommendation for domestic industry stems, in part, from the vibe he picked up at the White House when President Trump signed the executive memorandum directing the investigation.
"When we met with President Trump on this -- and I was there for the signing -- one of the questions he asked was 'Why now? What's different about it now?'" Ferriola said. "It was a rhetorical question, because he went on to answer it himself and he said, 'Never before has our steel industry been so threatened with its very existence.'"
Ferriola recalled that the broader industry was also discussed at the White House, not just the impact on domestic steel producers, but much of the steel supply chain -- mining, steel consumers such as service centers, equipment manufacturers, appliance makers, automotive, the electrical grid and more.
Ferriola said of his White House visit, "I thought I'd just be a backdrop" for a photo op. "But after the signing [the president] asked many questions. He was very interested in what we thought about the impact of this and how it should be applied," Ferriola said, adding, "I found his questions to be very thoughtful, and it said to me that he had a true concern about this issue."
Still, such an investigation on national security grounds is a seldom-used tool. Before the ones announced by the Trump Administration in April for steel and aluminum, there were just 26 similar investigations over the past 53 years. In 19 of those, either the Commerce report or the president determined that no action was necessary to adjust imports.
"I believe this time, the difference in the world -- the steel global overcapacity, the way the domestic industry has shrunk -- is a real danger that exists today," Ferriola emphasized. "When was the last time the world had 600 million to 700 million tons of overcapacity? Never."
He also pointed to the fact that "30-something steel companies have gone bankrupt," in the past 20 years. "Bethlehem Steel, for example, is gone. It made the shell casings for battleships. Such companies are no longer around to produce the steel."
Ferriola admits to being very passionate about 232. "Anyone who argues against the fact that you must have a robust steel industry to have a robust national defense, frankly, is a fool," he said.
The Commerce Department received the directive to investigate on April 20, and has 270 days from then to make recommendations to the president. Commerce Secretary Wilbur Ross has said it should not take that long. President Trump would then have 90 days to review the recommendations.
