MEPS analysis: Trump re-election ends uncertainty in the US steel market

MEPS, a global provider of steel data analysis, has examined the impact of Donald Trump’s re-election on the United States steel sector, highlighting hopes for renewed demand and policy shifts expected under his “America First” economic strategy. The Republican Party's decisive victory, including regaining control of the Senate, has set the stage for potential trade and manufacturing developments.

Drawing from its International Steel Review, MEPS notes that Trump’s first term saw the introduction of 25% Section 232 tariffs on steel imports. Analysts predict similar protectionist measures in his second term, including a proposed 10% tax on all imports and possible 200% tariffs on vehicles. “Trump’s focus on domestic industry suggests we’ll see continued protectionism, which could strain relationships with key trade partners like China and the EU,” said Jon Carruthers-Green, a MEPS market analyst.

The re-election has also cast doubt over Nippon Steel’s acquisition of US Steel, with Trump repeatedly emphasizing that strategic American businesses should remain domestically owned. In addition, the president’s stance on environmental policy, including a likely withdrawal from the Paris Climate Agreement and increased fossil fuel production, is expected to shape future industrial activities.

Steel Market Sentiment and Expectations for Recovery

Market participants interviewed by MEPS express cautious optimism. MEPS data reveals that US hot rolled coil prices have struggled throughout 2024, with a notable dip in August marking the lowest level since December 2022. Despite some recent price recovery, figures remain 33% below the January peak. Many in the industry are hopeful that Trump's victory will stimulate economic activity.

MEPS steel analyst Michelle Kirton remarked, “Market activity had stalled as companies waited for election clarity. Some sectors will undoubtedly benefit more than others, depending on how policy unfolds, but overall, there’s anticipation of increased steel buying early next year.”

Stuart Gray, another MEPS analyst, added, “We observed a slowdown in new projects, largely attributed to the uncertainty surrounding the election. Now, the focus will shift toward restarting investment, which could lead to upward pressure on steel prices. A ‘Trump boost’ in manufacturing could benefit the industry, but it will depend heavily on how trade policies are implemented.”

Source: MEPS International, Photo: Fotolia