July 2018 UPDATE: Section 232 Steel Tariffs

Prices Are Still On The Rise

Prices have continued to rise in the steel market since the signing of the Section 232 steel tariffs four months ago. Hot rolled, cold rolled, and coated products have all seen increases of 25 to 40 percent over the past few months. Though the increases have been slowing as of late, many in the market are currently wondering if the increases will continue through Q3 and potentially through Q4. Some in the market feel that there are not enough overseas imports to bring the prices down, and early indications are that there are no drastic import booms on the horizon. Others have seen the gap between current import pricing, and that of the domestic mills, as a sign to try to buy more imported material than they have since the new tariffs have come into effect. However, though the gap seems large, after the 25% tariff and freight costs to transport material from the ports, many manufacturers find that the total in-house price of imported steel is comparable in price to that of domestic sources. However, typically the lead time for domestic steel has been several weeks faster than that of imported steel.

The Spot-Buy Steel Market Is Also Seeing the Effects

Another side effect of the new trade tariffs has been the changes to the excess and secondary spot-buy market. Many manufacturers and steel suppliers are having an increasingly tough time at sourcing spot tons on the open market. Though several staples of the industry remain easy to find and readily available, more technical items requiring certification to a particular spec or in tighter gauge ranges have been harder to find or nonexistent on the open market. This likely comes as a direct result of suppliers and manufacturers reacting to both higher prices and longer lead times from the mill. Quickly after the announcement of the Section 232 steel tariffs, many sought relief from the secondary and excess market to cover their needs, hoping that the spike would only last a month or two. Likewise, many steel brokers may be sitting on their inventory, electing to try to ride the wave of price increases from the mill. Jump ahead four months later and the spot-buy steel market has been extremely scarce. Manufacturers should look to source their material several weeks in advance in order to give plenty of time to their purchasers if they are looking to source through secondary channels.

NAFTA Negotiations Hoped To Be Completed By Labor Day

The slowing of price increases may be due in part with the status of current NAFTA negotiations. Several Months back, the White House announced that Mexico, Canada, and the EU would not be excluded from the 232 tariffs. However, these tariffs may be on the negotiating table during these rounds of NAFTA discussions in light of rumors of a retaliatory tariff on US products. As both the largest exporter and importer of steel to and from the US, adding Canada to the list of countries exempt from the tariffs may have a significant effect on domestic pricing. Secretary of Commerce Wilbur Ross has said that he hopes to have these NAFTA negotiations completed by Labor Day. Until then, steel suppliers and manufacturers may have to sit and wait for information on these talks before making decisions about long-term buys.

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STEEL ORDERING PROCESS
HOW BEST TO ORDER STEEL FROM US...

At Hascall Steel we understand that part of being an expert is being able to tailor steel to your needs. With that in mind there are some key areas that will help us fulfill your steel order in a way that is best suited to your company’s capacities. By working with our sales team, we can adjust several aspects of your order to make things easier for your team members. Next are some areas to keep in mind that can improve efficiency and quality.

1. MATERIAL SPECIFICATIONS

Often customers place an order with the following basic information: Quantity/Gauge/Width/Length/Steel Type…

However there are quite a few QUALIFIERS that will help us all get the best value from the informational exchange.

2. TOLERANCES

When discussing material with our Sales Team, be sure to include tolerances for your gauge, width, and length (if applicable). In some cases, Hascall can meet tolerances as low as +/-.001 on gauge, +/-.003 on width, and +/-.015 on length. Specifications – Many steel specifications come with sub categories that can alter chemistries and mechanical boundaries. Be sure to have the full specification when ordering or talk with your sales representative to discuss options.

3. PACKAGING

Proper packaging can help reduce unloading and production time. ID – We offer ID sizes in 16”, 20”, and 24” OD – We are able to provide OD sizes up to 72” Skidding – Standard or custom skidding available, just let us know how you would like your material skidded to best meet your equipment needs.
Paper – Protective paper is standard on all orders but can be applied with standard or full wrapping both with and without Hascall Logos. Max Coil and Skid Weight – Coils can be adjusted to meet your max lift and coil capacities.
Offloading – Material can be shipped skidded or standing and set for Forklift on the side or the rear of the bed. Material can also be shipped ready for sheet lifter or overhead crane offload.

4. DELIVERY

Steel is only good if it gets there when you need it. At Hascall we have an experienced Logistics team that will ensure that your steel arrives on time in the way that best suits your needs. Whether you would like delivery via our in-house Steel Man Transportation service or if you would like to pick up your material personally, our team can set up appointments that meet your schedule. Our Logistics team can also arrange a 3rd party carrier if needed. Delivery dates, times, and address should be discussed with your Sales Representative prior to ordering.

5. THE UNKNOWN

And lastly, we know each customer is unique. There may be special requests that we would love to accommodate. These may range from a sample of the steel attached to the packaging, to increased tag requirements and frequencies. We are happy to work with you in order to be your trusted choice in slit steel coil and blanks.