The steel market across the globe, not only in America is directly influenced by the overall market conditions. Any sort of change pertaining to the economic growth or recession has an effect on the steel industry. Since the year 2014, China’s steel industry has been at loggerheads with the American steel industry in terms of exports. This lead to the U.S. imposing 25% tariffs on Chinese goods worth $16 billion in August 2018. Donald Trump’s move lead to a reactionary step from the Chinese authorities as they too imposed a similar 25% tariff on US goods worth $16 billion. Escalating skirmishes between the two technical giants over steel goods has lead to trouble for steel importers and exporters in America.
According to the World Steel Association (WSA), the average weight of an American car is 55% due to the steel invested in it. A building in the USA on an average holds almost half of the steel component in it. Right from steel manufacturing to steel production, procurement, supply, and usage solutions, the American standard of living and economy is highly dependant on steel.
According to the Steel market forecast, London’s steel industry fell in mid-June and mid-July in the year 2018 by as low as 6,000 dollars per tonne while China’s Shanghai Futures Steel (ShFE) observed a drop in the price of copper by 12%. In China, the steel industry has been afloat as it is observing a positive growth rate of 16%. A similar trend has been seen in the US with the prices seeing an upward rate of 3%. Globally, the steel industry has risen by 4.6% since its inception with an annual growth increment of 1.84 billion tonnes.
Who Will Gather The Industrial Advantage And Who Will Reap The Disadvantage?
In the game of tariffs and sanctions, American steel industries remain clear winners. The administration and the Public Relations departments have successfully lobbied legislation that acts in their favor. American industries have a history of relying on importing 18% of steel for infrastructure and vehicular requirements.
However, they may have to face some troubles with steel procurement in the near future. On the less profitable side are the companies that use steel as a backbone for their productions. Industries that function in the production of cars, planes, heavy-duty automobiles, and other equipment may have to face problems in procurement. This is because the import industry for heavy steel has become more expensive.
What’s Next For The American Steel Industry
If on one side, the steel employment and industries are growing at a rapid rate, environmentalists observe a blatant decrease in the share of raw materials required in the manufacturing of steel as an alloy and then further using it in various types of equipment.
With soaring demand for steel in the USA and the country’s high dependence on the alloy, factors like employment rate, environmental sustainability, and a general macroeconomic consciousness are important to keep the demand-supply equilibrium.