US Steel Industry: Strong Results Despite Market Changes

Steel Price Rises Boost US Mills’ Financial Performance

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Steel Price Rises Boost US Mills’ Financial Performance

The US steel industry is benefiting from strong financial performance. President Donald Trump’s tariffs on steel imports are helping. By reinstating the 25% Section 232 tariffs, Trump aims to strengthen the domestic steel sector. The goal is to reduce imports, encourage investment, and increase steelmaking capacity utilization. As a result, US steelmakers are showing solid financial results despite price fluctuations.

Financial Stability Despite Challenges

The US steel sector has shown resilience in recent years. Steel prices surged during the pandemic due to supply chain disruptions. This led to strong profit margins. For example, the sector’s average profit margin peaked at 21.2% in Q3 2021. By comparison, the average from 2001 to 2019 was just 1.3%. However, in 2024, steel prices and demand dropped, leading to a lower profit margin of 1.8% in Q4.

Despite this drop, steelmakers built cash reserves and invested in new capacity. As of Q4 2024, the industry had nearly USD10 billion in cash. The long-term debt-to-equity ratio remained low, reflecting financial strength.

Price Rises and Investment Challenges

The recent rise in steel prices may slow the industry’s profit decline. Prices for flat products have risen by over 40% this year. MEPS predicts prices will drop in the second half of 2025. Long product prices are expected to finish the year about 10% higher than in January.

However, US steelmakers may hesitate to expand further. They face uncertainty about tariffs and the risk of a recession. President Trump’s administration is encouraging foreign investment by offering a “fast-track” process for steel projects. Hyundai Steel recently pledged to build an EAF-based steel mill in Louisiana. The mill will produce 2.7 million short tons of automotive steel annually.

While the financial outlook for the US steel industry is positive, tariff uncertainty and fluctuating demand could limit investment in the coming years.