Although the details of the Commerce Department's Section 232 report will be kept under wraps until President Donald Trump decides whether to impose trade restrictions on steel imports, industry groups and domestic producers were upbeat Friday that the report had made it's way to the president's desk.
Commerce Secretary Wilbur Ross late Thursday delivered the results of the department's Section 232 investigation to Trump a few days ahead of deadline. The probe, launched in April of last year, aims to determine if steel imports are a threat to US national security and carries with it the potential for the introduction of tariffs, duties or other measures.
Under the law the president has 90 days from receiving the report to decide on any potential action, bringing the final deadline to April 11. Ahead of the report's delivery, American Iron and Steel Institute CEO Tom Gibson told S&P Global Platts he is hopeful a final decision will be issued sooner than the 90- days allocated.
"We are confident that we have made the case that the repeated surges in steel imports in recent years threaten to impair our national security and we look forward to the president's decision on the appropriate actions to address this critical situation," Gibson said in a statement following the delivery of the report.
Steel Manufacturers Association President Philip Bell said he is confident that Trump will take action and propose remedies that are "broad, meaningful and impactful."
"That is the only way we can begin to significantly reduce the many tons of illegally and unfairly imported steel that finds its way to our shores," he said in a statement.
US Steel on Friday called on Trump to take swift and decisive action on steel imports.
"Our nation cannot afford to allow the continued rise of foreign imports that undermine America's capacity to produce the steel necessary for our country's national and economic security," the company said in a statement. Despite the optimism among the industry that trade restrictions will be put into place, some have questioned whether further restricting imports is necessary, given that market conditions have improved.
In a note issued Friday, KeyBank Capital Markets analyst Phil Gibbs said he sees little reason to protect direct sheet imports given that the significant tariffs placed on many sheet products between 2015-2016 have essentially put a block on direct Chinese imports of cold-rolled and galvanized sheet in the US, fostering some of the best metal spreads the industry has ever seen.
Additionally, Gibbs pointed out that cold-rolled and galvanized facilities in the US are highly utilized as is, signaling the need for continued imports in the market. However, he noted that if energy and industrial pipe and tube imports were to be shielded, it could drive higher demand for hot-rolled substrate.
"That is when capacity restarts, such as US Steel's Granite City operation, would resurface to the top of investor's minds," Gibbs said.
