How Does COVID-19 Impact the US Steel Industry?
Marketrealist - US steel industry
The US steel industry felt coronavirus jitters before other US businesses. The deadly virus originated in China, which is the largest metal consumer, producer, and exporter in the world. The coronavirus has taken a toll on US steel demand. Leading end users, like the automotive sector, curtailed production. There have also been reports of buyers canceling their orders. Last month, the US steel industry asked the Trump administration to consider it as an “essential” industry. Since the demand has fallen, domestic mills have cut production.
US steel production falls
US steel production fell 12.7% year-over-year in the week ending March 28. The capacity utilization rate also fell to a multiyear low of 71.6%. Incidentally, the Department of Commerce intended to increase the domestic industry’s capacity utilization rate with the Section 232 tariffs. To be sure, the tariffs that President Trump imposed in March 2018 led to a sharp fall in US steel imports. After falling in 2018 and 2019, imports have fallen sharply in the first two months of 2020. However, these are extraordinary times and falling imports mean little for the domestic industry.