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| US Steel Demand |
Tariff escalation weakens US steel demand and triggers plant closures
US steel demand has sharply declined amid aggressive tariff hikes, directly impacting both domestic production and imports. The Trump administration’s 25% tariff on steel—doubled to 50% in June under Section 232—has destabilized procurement strategies. Market participants report a wave of uncertainty among processors, OEMs, and service centers.
Cleveland-Cliffs idles three plants as structural issues emerge
In response to falling US steel demand, Cleveland-Cliffs idled its Steelton, Conshohocken, and Riverdale plants by June 30. These facilities focused on niche and downstream steel products like rails and specialty plate. However, poor demand and inefficient operations rendered them unsustainable.
Meanwhile, Brazilian slab imports to the US remained high despite tariffs. In June alone, the US imported 752,503 tonnes from Brazil. However, this volume does not resolve the structural slab undersupply, estimated at 5 million tonnes annually. Without sufficient domestic slab, steelmakers struggle to meet needs for defense, energy, and shipbuilding sectors.
Spot plate prices drop; domestic producers face margin pressure
As a result of weak US steel demand, plate prices fell for the second consecutive week by August 5. Cut-to-length carbon plate was priced at $53 per hundredweight, down 1.85% week-on-week. Mills are now offering discounts below listed prices to secure limited orders.
Conshohocken’s closure did not reduce US plate capacity, as it was a finishing plant. Still, the shutdown reflects broader demand malaise. Riverdale’s hot-rolled strip was a niche product now harder to source domestically, pushing some buyers abroad—despite steep tariffs.
ScrapInsight Commentary
The sharp decline in US steel demand highlights how tariff policy can backfire when domestic capacity lacks input resilience. The slab supply gap, inefficient assets, and downstream demand erosion may pressure further plant rationalization. Expect plate pricing volatility and potential M&A activity in Q4 if demand recovery lags.
