Quotas could replace steel tariffs, Northeast petchem investment grows, China recovery expected in Q2
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Quotas could replace steel tariffs—Steel Dynamics
Quotas on imported steel could replace steel tariffs, Steel Dynamics CEO Mark Millett said on the company's first-quarter earnings call.
The analysis comes as the U.S. trade war with China finalizes and the United States Mexico and Canada Agreement inches toward ratification.
Imported steel has been subject to a 25% tariff for more than a year.
The New York Times recently reported that the Trump administration is in favor of permanent limits on the amount of steel and aluminum [Mexico and Canada] export to America each year.
ArcelorMittal USA CEO John Brett told the U.S. Congressional Steel Caucus in March that quotas could serve a similar purpose as tariffs in bolstering the U.S. steel industry with the right conditions.
Supporters of quotas see such provisions as protection from "dumping" of cheap steel into the market.
Recovery in China expected in Q2—Clariant
Tariffs and a sluggish economy have hit demand for specialty chemicals.
Clariant expects demand to recover in China this year after sales there fell 18% during the first quarter, Chief Financial Officer Patrick Jany said in the company’s first quarter earnings call.
“Businesses which are more linked to GDP like plastics and coatings have suffered from the environment which has been deteriorating since the third quarter,” Jany told Reuters.
US expansion positive for next year—NABE
The US economic expansion should last for at least the next year, according to a survey by the National Association for Business Economics (NABE).
The NABE conducted a poll of 116 business employees in private firms and trade groups.
Materials input costs remain elevated at respondents’ firms, especially goods-producing firms.
More than half of survey respondents reported shortages of skilled labor at their firms. Tight labor market conditions continue to push firms to raise wages, increase training and consider additional automation.
More than half of survey respondents (52%) report shortages of skilled labor at their firms. This is an increase from the 45% who reported shortages a year ago.
Regarding the US-China trade dispute, the net impact of tariffs on American companies is not positive, and the negative impacts are especially noted within the goods-producing sector, said Kevin Swift, president of the NABE and chief economist at the American Chemistry Council (ACC).
Goods-producing panelists report tariff impacts have most influenced higher costs (67%), higher selling prices (50%), and negative sales (42%).
Goods-producers also report the most common adjustment to plans for hiring and investing at their firms are changes in sourcing and supply chain shifts.
Petchem investment in Ohio grows
Investment in the shale sector in eastern Ohio continues to grow, reaching $74 billion since 2011, according to a report commissioned by JobsOhio.
The quarterly report, done by Cleveland State University’s Energy Policy Center shows that about two-thirds of that investment has been in drilling, land acquisition, building roads and other expenses tied to the upstream portion of oil and gas production.
The rest has been spent on activities such as collecting and gathering the oil and gas along with transmission lines and investments in natural-gas power plants and other uses.
The study represents investment through the first half of 2018. It comes just weeks after researchers at IHS Markit released estimates that show by 2040, the Utica and Marcellus shale regions in Ohio, West Virginia and Pennsylvania will supply 45% of U.S. natural gas production. That’s up from 31% this year.