New York — The S&P Global Platts daily price assessment for US-made hot-rolled steel coil -- the benchmark, bellwether product -- gained $10.50 Tuesday, closing at $810.50/short ton, as a 25% steel tariff on US imports loomed. The price assessment is up $40.25, or more than 5%, compared to $770.25/st a week ago.
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* Tuesday's price level represents the highest mark since May 2011, based on Platts historical market data.
* In October 2016, just before the presidential election, the same product's price was assessed by Platts at $475/st. It has increased 71%, up $335, since then to the current $810.50/st.
* California Steel Industries is asking President Donald Trump to exclude semi-finished steel slabs from the proposed blanket tariff on steel imports.
* The US relies on steel imports to meet both qualitative and quantitative demand. The biggest import product category is semi-finished steel, which is used exclusively by American steel producers. "Semis" give domestic mills production flexibility and can shave production costs when processed into finished steels.
* Of 38 million st imported last year, 8.2 million -- or nearly 22% -- was semi-finished products including slabs, billets and blooms.
* US apparent consumption of steel in 2017 was about 118 million st. This was comprised of nearly 91 million st shipped by US producers, plus imports of 38 million st, less exports of almost 11 million st.
* Metals processor and supplier Ryerson said on its earnings call Tuesday that tariffs won't impact demand, but there is much uncertainty around supply continuity. Officials told of reports that metals warehouses are being cleared out and customers are buying in advance, perhaps ahead of their current demand needs, to secure pre-tariff material. Ryerson handles carbon and stainless steel, as well as aluminum.
* For the week ended March 3, the domestic steel industry's utilization rate was nearly 79%, highest in more than three years, according to American Iron and Steel Institute data. The US Commerce Department maintains that an 80% utilization rate is the threshold for the domestic industry's long-term viability.
S&P Global Platts US Projected Steel Output (million st, based on AISI weekly raw steel data; assumes annual capacity of 121 million st)
Weekly Utilization Weekly Production Annualized Production 79% 1.83 95.16 80% 1.86 96.79 85% 1.98 102.84 90% 2.09 108.89
* US producers melted and finished nearly 90 million st in 2017, up 4% over 2016. They are ahead of that pace.
* Trump said he would order tariffs on steel and aluminum imports this week.
* The White House has been reviewing the recommended import restrictions submitted in January by the US Commerce Department under Section 232, part of the Trade Expansion Act of 1962, which is used to determine the impact of imports on national security.
* Since Trump was sworn in, the price of US-made, hot-rolled coil has averaged $639/st, based on Platts Market Data.