SMM11, 28th,: Steel Dynamics Inc.. Plans to build a new steel mill could lead to a new case for the US steel industry and lead to "indigestion" in the market.
Earlier, Trump's import tariffs pushed up steel prices and spurred growth in domestic production. Benchmark US steel prices have fallen from their nearly 10-year highs set in July.
"We see new supply as a major threat to Treasury bond prices and sentiment," Keybanc Capital Markets analyst Phil Gibbs said in a note to investors. Clearly, given the recent restart activity and a series of capacity expansion statements over the past few months, there is no need to further expand US steel capacity.
Steel Dynamics said on Monday that it would spend $1.8 billion to build a new arc furnace with an annual production capacity of about 3 million tons. The company, based in Fort Wayne, Indiana, said it expected to start construction of the plant in 2020 and open it in the second half of 2021. The company said the investment would create about 600 jobs.
President Trump imposed a 25% tariff on all steel imports earlier this year to help boost domestic steel capacity utilization to 80%.
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