Hot-rolled steel coil futures were hovering around $940 per tonne, holding near the 14-month high of $945 reached on March 12th, reflecting a 30% increase year-to-date.
Steel coils in US surge to one-year high
The surge in steel prices comes as mounting tariffs on steel imports to the US continue to strain the outlook for local producers facing limited capacity. President Trump’s threat to impose tariffs of up to 50% on all steel goods from Canada, before settling on 25% levies from all countries, added significant pressure to the market. This is in addition to the series of restrictions on Chinese steel products from his first term, which were designed to reduce competition from foreign suppliers and protect domestic producers.
Protectionist measures increase competition
These protectionist measures were expected to increase competition for the already limited steel material available from US mills and furnaces, giving domestic producers greater leverage to raise prices. With imports constrained and local supplies tightening, the domestic steel market has been able to maintain higher price levels. Moreover, the demand for steel has been bolstered by the recovery and growth within the US manufacturing sector, which heavily relies on coil production for various industrial applications.
US factory activity expanded in February
The latest data from the Institute for Supply Management (ISM) revealed that US factory activity expanded for the second consecutive month in February, further fueling expectations for continued strength in demand. As a result, steel prices have been buoyed by both supply constraints and improving economic conditions within the manufacturing industry. This combination of factors has positioned steel futures on an upward trajectory, with no immediate signs of significant relief from tight market conditions.
