Tariffs Boost U.S. Steel Companies' Expansion Plans

Researched by Industrial Info Resources (Sugar Land, Texas)--As the Trump administration rolls out its 25% tariff on steel imports into the U.S., the controversial tariff is aiding U.S. steel companies in their plans for expansion. Trump's intention to institute the tariff was announced on March 1. Initially, some countries and regions were exempted, including Canada and Mexico. On May 31, these countries, along with the European Union, became subject to the tariffs.

Earlier this week, Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana) announced plans to add a 400,000-ton-per-year galvanizing line and perform upgrades to its facility in Columbus, Mississippi. The line is expected to go into operation in mid-2020. The company says the addition will bring it up to 10 galvanizing lines with approximately 4.2 million tons of coating capacity. The line is expected to go into operation in mid-2020. Steel Dynamics also said it would invest $90 million to $100 million to upgrade certain equipment in the plant. For more information, see Industrial Info's project reports on the galvanizing line and upgrades.

Industrial Info is tracking $17 billion in capital and maintenance projects at U.S. steel mills, including new projects announced since the Trump administration stated its intentions to institute the tariff. The Great Lakes market region, with more than $7.6 billion of these projects, leads the U.S. in terms of project value.

Click on the image at right for a breakdown by market region of active projects at U.S. steel mills.

Among the companies that have announced new steel projects in the U.S. recently are Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) and JSW Steel Limited (Mumbai, India). Among Nucor's projects is the expansion of its steel mill in Bourbonnais, Illinois, and the addition of a galvanizing line in Hickman, Arkansas. The projects have a combined estimated total investment value (TIV) of $420 million. For more information, see Industrial Info's project reports on the Illinois and Arkansas projects.

JSW announced plans to triple production at its facility in Texas and purchased a mill in Ohio. At its mill in Ohio, the company plans to restart an electric arc furnace and caster and add an additional electric arc furnace. The equipment is expected to be restarted late this summer, and the arc furnace addition is expected to be completed in 2020. For more information, see Industrial Info's project reports on the arc furnace addition, arc furnace restart and caster restart.

While the tariff may be a boon to U.S. steel producers, other industries may suffer. The Houston Chronicle reports that the chief executive officers of Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) and Chevron Corporation (NYSE:CVX) (San Ramon, California) this week warned that the tariff would raise the costs of oil and gas pipelines and liquefied natural gas production facilities, of which the Trump administration has encouraged the development.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.