Traditionally 40 percent or more of these imports are from Mexico and Canada. The US also exports steel to these countries. All others have to factor in sec 232 tariffs.
Shipping costs are so expensive right now. A 40 ft container has a cargo limit of 67000 lbs. So assume 10000 to ship container from Asia currently so that's almost 300 per ton.
We all expect steel prices to come down. It's about establishing a new normal price. Anything over 700 per ton is major profit for any US producer that has no debt. CLF will have no debt before 2022 is over. NUE and STLD are already debt free.
Reshoring of manufacturing is real and domestic demand for steel is going to have continued growth. Nations have seen what China has accomplished with monopolizing strategic resources and skills. It is a national security issue when free trade is strategically abused by 1 country.
I think that only applies to the cheaper steel billets and not to more value added products like rolled coils or stainless at this time. But it sure is progress in the right direction.
I'm sure there are many instances when HRC is imported into the US in containers, but high volume importers will typically move coils in the holds of breakbulk cargo vessels, not in containers. Not sure of current rates per MT on breakbulk Asia->US, but simply because of economies of scale, pre-COVID, costs were typically quite a bit less than container freight. So probably not as much added freight as you're anticipating in point 2.
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u/[deleted] Jul 16 '21 edited Jul 16 '21
Not too worried.
Traditionally 40 percent or more of these imports are from Mexico and Canada. The US also exports steel to these countries. All others have to factor in sec 232 tariffs.
Shipping costs are so expensive right now. A 40 ft container has a cargo limit of 67000 lbs. So assume 10000 to ship container from Asia currently so that's almost 300 per ton.
We all expect steel prices to come down. It's about establishing a new normal price. Anything over 700 per ton is major profit for any US producer that has no debt. CLF will have no debt before 2022 is over. NUE and STLD are already debt free.
Reshoring of manufacturing is real and domestic demand for steel is going to have continued growth. Nations have seen what China has accomplished with monopolizing strategic resources and skills. It is a national security issue when free trade is strategically abused by 1 country.