What some are describing as the Trump Factor appears to be emboldening US steel producers to embark on new capital projects.
Since the November 8 election of Donald Trump as US president, several mills have announced restarts of idled operations as well as major mill upgrades and expansions.
Trump’s steel-friendly administration is boosting confidence on both the supply and demand sides, the former via the likelihood of more or continued import restrictions and the latter by way of a generally more optimistic market and the possibility of huge infrastructure and pipeline projects, not to mention The Wall.
US Steel, whose CEO Mario Longhi is among a group of business leaders selected to advise President Trump on increasing US manufacturing jobs, announced in mid-December it would restart the 3.6 million tons/year capacity hot-strip mill at its Granite City, Illinois works. USS is also reopening its Keetac iron ore mine in Minnesota and has earmarked an extra $200 million this year for asset revitalization in its sheet operations.
Nucor, whose CEO John Ferriola is also in the select group, will spend $335 million to purchase North American pipe maker Republic Conduit and another $130 million to purchase Southland Tube, thereby expanding its presence in the structural tube market
Also announced since Trump’s election:
- ACERO Junction, a newly formed steel company, will restart an idled hot strip mill in Mingo Junction, Ohio, at a cost of $130 million, adding hot-rolled coil making capacity and ultimately, according to local newspapers, as many as 350 jobs.
- Charter Steel will build a $150 million special quality bar mill in Cuyahoga Heights, Ohio to advance its position in the high-value SBQ bar market.
- Commercial Metals Co. will invest in equipment to become the first US-based producer of spooled rebar at its Durant, Oklahoma mill, where it also will begin production of fence posts. CMC also announced it is purchasing seven steel recycling facilities in the southeastern US.
- Steel Dynamics Inc. will spend $28 million to increase by 20% the rolling capacity at it its Roanoke, Virginia rebar mill.
- Dura-Bond will restart a former USS pipe mill in McKeesport, Pennsylvania and expects to hire 200 workers.
- NLMK USA will restart the hot-dip galvanizing line at its sheet mill in Sharon, Pennsylvania, increasing the capacity of its Sharon Coating unit by 43%.
It’s not all smooth sailing for America’s steelmakers. The American Institute for International Steel, representing steel traders, has come out in opposition to Trump’s “Buy America” plans for new pipeline and infrastructure projects, calling the provisions “nothing more than a subsidy.”
Nucor’s CEO said a Trump plan to impose a 20% tariff on imports from Mexico, to build the southern US border wall, could prompt its 50-50 JV with Japan’s JFE Steel to scratch plans for a Mexican sheet processing plant. Nucor said the JV has options to move the project elsewhere.
There are also some general concerns about the new administration’s potential for shape-shifting, but most market observers believe Trump’s presidency will be good for American steelmakers.