Blanket US import tariffs set US steelmakers back nearly $39mn in May for seaborne steel feedstocks and ferrous scrap shipments, an Argus analysis of import data found.
The White House imposed 10pc import tariffs on most countries in early April, which raised the cost of imported ferrous scrap, pig iron, and direct reduced iron (DRI) integral to US flat-rolled electric arc furnace (EAF) steelmakers.
US steelmakers in May imported 1.07mn metric tonnes (t) of steel feedstocks and ferrous scrap at a declared value of $386mn, according to US customs data and Argus analysis of manifest data.
As a result, the 10pc tariff cost US steelmakers at least $38.6mn in May for imports of pig iron, DRI produced by Nucor at its Trinidad plant, iron pellet feedstock used at Nucor's Louisiana DRI plant and bulk ferrous scrap from Europe.
Argus excluded steel feedstocks and ferrous scrap imports from Canada and Mexico because they are exempt from the tariffs under the US-Mexico-Canada trade agreement.
Excluding shipments from Mexico and Canada, US steelmakers imported 592,000t of pig iron in May at a value of $268mn, as well as 38,500t of ferrous scrap at a value of $16mn, and 126,000t of direct reduced iron (DRI) at a value of $52mn, according to US customs data.
Nucor imported four bulk vessels of iron ore pellets in May from Brazil to its Louisiana DRI facility, which totaled 314,000t, according to Kpler vessel tracking data. The declared value of iron ore and concentrates imported from Brazil for the month was $161/t, US customs data shows. Argus estimated that the total value of these bulk vessels was $50.6mn.
Electric arc furnace (EAF) steelmaker Nucor largely brushed aside bottom-line impacts from US import tariffs on iron metallics and scrap in its April quarterly earnings call because of its diversified raw materials sourcing strategy and other US trade policies supporting the steel industry.
The import tax encouraged Indiana-based EAF steelmaker Steel Dynamics to lean more heavily on prime and shredded scrap in its flat-rolled melt mix, the company said in April on its quarterly earnings call.
US president Donald Trump dealt EAF steelmakers a few major blows this week after he threatened to place a 50pc tariff on Brazilian pig iron imports and iron ore products and a 30pc tariff on European ferrous scrap on 1 August.
The combination of these new tariffs would further amplify costs for US steelmakers and could prompt them to rejig their international and domestic supply chains. This could shock the domestic ferrous scrap market in the coming months and cause large shifts in global trade flows.
