VERTICAL FOCUS | Metals
Steel and Aluminum Tariffs: What’s Happened So Far
To help make sense of the confusion around current steel and aluminum tariffs, IHS Markit offers this timeline.
- March 23, 2018: President Donald Trump imposes import tariffs on steel and aluminum.
- June 1: Significant–and supposedly final– changes are imposed.
- June 15: President Trump approves tariffs on Chinese goods, including a 25% tariff on USD50 billion of Chinese exports to the United States. The U.S. administration was also instructed to prepare an additional list of imports for China worth $200 billion.
- June 19: The U.S. Commerce Department announces a preliminary finding that Chinese common alloy aluminum sheet imports had been sold at below-market prices and assigns anti-dumping duties of over 100% on selected Chinese producers.
- June 22: After the Trump administration's announcement that the EU would face a 25% tariff on steel and a 10% tariff on aluminum, EU member states condemn the U.S. action and implement retaliatory measures with “rebalancing” tariffs on a range of U.S. imports.
- July 18: The European Commission imposes its own safeguard measures, levied upon 23 steel products.
Metal Thieves Show Their Mettle
On July 13, 2019, thieves pulled off a bold heist in Georgetown, South Carolina. The culprits floated up the Sampit River to the 3V Sigma USA chemical plant around midnight. 3V Sigma USA manufactures specialty chemicals, from synthetic polymers to organic chemistry molecules.
Authorities believe that the thieves knew what they were looking for, because by 1 a.m. the pair had made off with four 100-pound drums filled with $300,000 worth of palladium, a precious metal. The chemical plant didn’t report the heist until five days later.
Palladium ($1,336 per ounce as of Aug. 27, 2019) is nearly as valuable as gold ($1,534 per ounce), but it could be hard to move—you can’t just bring it to the local scrap yard or jeweler. Palladium is commonly found in catalytic converters and its high value has led to an uptick in converter thefts across the world. The metal is primarily sourced from mines in Russia and South Africa, but it is also mined domestically in Montana.
As of press time, the carefully planned heist remains unsolved.
Isn’t it Iron-ic?
Iron is the most commonly used metal worldwide, often as the main ingredient in steel. Thus, the supply of iron ore is an important factor for the global economy. Based on the production of usable iron ore, Australia and Brazil are some of the largest producers in the world. In 2018, Australia produced an estimated 900 million metric tons of iron ore, while Brazil’s production came to an estimated 490 million metric tons.
Steeling a Glance at Supply and Demand
- Steel production had been too strong in early 2019, given that demand is soft.
- Steel is a buyers’ market and should remain so through 2019.
- Lead times are short, new orders at mills are falling, and prices are easing despite higher input costs.
- Official prices eased in the second quarter of 2019 and bargaining can lead to even better deals.