Section 232 Tariffs Lead to Dramatic Recovery of Kentucky's Steel Sector

SEATTLE (Scrap Monster): The decision by the Trump administration to impose 25% tariffs on imported steel has eased the steel crisis and has resulted in overall recovery in nation’s steel sector. Kentucky has witnessed dramatic recovery, reporting notable jump in capacity utilization by steel mills. It has also led to reopening of several shuttered steel plants by steel majors, thereby bringing back jobs in the region.

The imposition of tariffs has lifted the capacity utilization at U.S. domestic mills to levels exceeding 80%- a level not seen over the past decade. Also, rough estimates indicate that steel import volumes have declined by more than 50% during the period from April 2018, when the tariffs became effective, until December 2018. Also, steel shipments from the country surged higher by 5%. Additionally, the share of imported steel has fallen drastically from 29% in April 2018 to as low as 19% in Dec ’18.

The improved steel market conditions have led to several companies announcing their decision to invest in construction of new mill and expansion of existing mills. Recently, Nucor had declared to make an investment of approximately $1.35 billion in constructing a new state-of-the-art steel plate mill in Brandenburg, Kentucky. This project is expected to create 400 jobs. The company had also announced its decision to expand its steel mill near Ghent.

Incidentally, the Kentucky steel industry generates over $11 billion in industry output, supporting nearly 40,000 well-paid jobs in the state.