The recent announcements by President Trump regarding tariffs on imported steel and aluminum under Section 232 are having a major impact on pricing in the market and we expect it to continue over the next few months.
The new tariffs that are set to go into effect on March 23rd are:
- 25 percent on imports of steel
- 10 percent on imports of aluminum
As these tariffs go into effect, we expect importers to immediately absorb the full cost of these tariffs into their costs. On top of the new tariffs, the domestic mills have already increased their pricing due to a spike in demand; as imports have fallen off the last couple of months due to the tariff talk.
Due to these price increases, we will be adjusting our pricing accordingly and all quotes older than 7 days will need to be re-quoted. Wherever possible, our sales staff will try to keep the pricing offered. Unfortunately, there will be situations where we will not be able to do so.
The supply situation is likely to be very volatile for the near future. At the Tampa Steel Conference last month, John Anton, who does steel analytics for IHS Markit, said that he believes that Section 232 as written will likely reduce imports by 37%. If so, then many believe that we will continue to see price increases as domestic mills increase capacities and push utilization rates higher to meet the demand voided by imports.
We will keep you informed of any changes or new developments, and we encourage you to monitor your lead times and needs over the next few months to best manage the expected price variations. Despite the current uncertainty, we are continuing to acquire inventory regardless of the higher prices to ensure that we always have an adequate supply for you our customers.