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'Happy with tariffs': Steel industry emerges as trade war winner


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Well we have one industry winning :bc:

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'Happy with tariffs': Steel industry emerges as trade war winner

by Matt Egan   @MattEganCNNJuly 29, 2018: 7:18 AM ET

1. Blockbuster profits: The trade war has cast a shadow over parts of Corporate America, but it is bringing a bit of good fortune to the steel industry.

President Donald Trump's metal tariffs have sent steel prices surging and sparked blockbuster profits for steel manufacturers.

Reliance Steel & Aluminum (RS) hauled in record sales, thanks to an 18% spike in prices. Nucor(NUE) recorded the best second quarter in its history. Its profit more than doubled.

"All in all, we're very happy with tariffs," Nucor CEO John Ferriola told analysts earlier this month.

Those words haven't been uttered by many other corporate bosses, who are grappling with sticker shock.

Tariffs levied by the United States and major trading partners are eating into the profits of Harley-Davidson (HOG), General Motors (GM), General Electric (GE), 3M (MMM) and hundreds of other companies. CEOs are scrambling to raise prices and reshuffle their supply chains.

Unsurprisingly, steel companies are feasting on a price spike from Trump's 25% steel tariff. The benchmark price of US-made steel has zoomed 41% higher since the start of the year to $917 per short ton, according to S&P Global Platts.

Tariffs aren't the only factor. Steel demand is strong in an economy that just clocked its fastest growth since 2014.

Following the booming profits from Nucor and Reliance, US Steel (X) and AK Steel are scheduled to report results this week.

Both steel makers are expected to reveal a jump in revenue, though not by as much as their rivals. That's because US Steel and AK Steel (AKS) are locked into annual contracts that have fixed pricing. Those contracts expire later this year, potentially allowing them to capitalize on the price hikes.

Nucor is seizing on the momentum to plow $1 billion back into its business, a huge increase that will mostly go toward expansion.

"What will happen to our great country if we continue to operate with a massive trade imbalance?" Ferriola asked. "We agree with the administration's efforts to address this issue."

Of course, steel customers are less than thrilled.

Material costs have risen by as much as 50% at FJM Ferro, a Brooklyn company that fabricates steel used in Manhattan skyscrapers.

Steel companies may have record profits, but it does hurt the mom-and-pop shops," said Joe Casucci, FJM Ferro's founder and CEO.

Even large companies are getting squeezed. GM slashed its profit outlook last week, warning of a $300 million jump in commodity costs linked to higher steel and aluminum costs.

"You have to be careful with tariffs because there's always a cost," said Philip Gibbs, a steel analyst at KeyBanc Capital Markets.

He pointed out that spiking US steel prices threaten to make American businesses less competitive. Some companies may eventually try to find other ways to get steel into the country.

"It feels good in the short run as prices go up," Gibbs said. "But then all the customers complain."

https://money.cnn.com/2018/07/29/investing/stocks-week-ahead-steel-tariffs-trade/index.html

 

 

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Poor Ben.  This must be hard on him.  :lmao:

Also, hard on CNN.  Luckily, they filled the positives that they absolutely hated reporting with enough negative spin to keep their base happy.  Or unhappy.  Same.

Nice find, Vince!

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6 minutes ago, Zambroski said:

Poor Ben.  This must be hard on him.  :lmao:

Also, hard on CNN.  Luckily, they filled the positives that they absolutely hated reporting with enough negative spin to keep their base happy.  Or unhappy.  Same.

Nice find, Vince!

It's a narrow focus win for Trump.

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1 minute ago, BOHICA said:

Nucor putting a 1 billion $ into US expansion.

Thank you Mr President!

Same with Steel Dynamics....we plan to invest well over 2 billion from last year to next year 

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3 minutes ago, BOHICA said:

Nucor putting a 1 billion $ into US expansion.

Thank you Mr President!

And billions bailout for the farming industry. Thanks Mr trump!

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1 minute ago, Kev144 said:

And billions bailout for the farming industry. Thanks Mr trump!

I posted an article just the other day about farmers not losing cause of the tariffs....  but ya farmers are subsidized in the US....  everything from disaster reliefs, to CRP, to food stamp program...  US government spends a lot on farmers for sure.  

But the steel expansion that is and will be going on will be a boost to America for sure.

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1 minute ago, f7ben said:

Same with Steel Dynamics....we plan to invest well over 2 billion from last year to next year 

Then you can seize the means of production and slaughter the bourgeoisie :lol:

 

  • Haha 1
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All of our raw materials are up, transportation as well.  Capacities across the board are maxed out in many industries.  It is what happens when there is no investment leading up to rapid economic growth.  Prices will  fall as capacity catches up.  For now, if you want it, companies will make you pay for it.

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1 minute ago, Mainecat said:

Plumber friend said supplier warned of 30% increases.

Trump is a loser businessman.....many times on the backs of taxpayers.....now he will put the country in bankruptcy

FAKENEWSMAINECUNT :lmao: nobody is dumber 

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2 hours ago, Mainecat said:

Plumber friend said supplier warned of 30% increases.

Trump is a loser businessman.....many times on the backs of taxpayers.....now he will put the country in bankruptcy

right cause this country hasn't been on the verge of bankruptcy until trump took office SMH

 

trumps been terrible on spending but this trade war thing will either be the pinnacle of his presidency or put him out the door.  I'm not going to bitch about it till it's over and we can see which side it falls on.  

 

 

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1 hour ago, Angry ginger said:

right cause this country hasn't been on the verge of bankruptcy until trump took office SMH

 

trumps been terrible on spending but this trade war thing will either be the pinnacle of his presidency or put him out the door.  I'm not going to bitch about it till it's over and we can see which side it falls on.  

 

 

Whatever it takes to justify your vote :lmao: 

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  • Trying to pay the bills, lol



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