But the pause will probably prove temporary, especially if US hot-rolled coil prices reach $1,000 per ton - at that price, duties could be paid with plenty of room left over for profits, market participants said.

American Metal Market’s price assessment for foreign HRC has increased to $720-745 per ton from $660-715 per ton previously. A 25% increase would bring that range to $900-931.25 per ton.

“We’re going to be back in business once the decision is made and we know what we’re dealing with,” one steel trader predicted.

Imports down, but not for long

The US was licensed to import 2.21 million tonnes of steel in February, down 15.4% from 2.61 million tonnes in January and off 10.5% from 2.47 million tonnes in February 2017, according to US Commerce Department figures.

That trend is expected to continue through at least early July because of uncertainty surrounding the 232 tariff implementation, market participants said. Before the tariffs were signed into law, relatively few deals were being transacted for offers for foreign steel slated to arrive at US ports in June or July.

Some customers booked those tons, with traders agreeing to deals on the condition that the buyers pay for any tariffs that may be imposed. But others have instead opted to cancel orders, and some traders and foreign mills pulled offers ahead of the 232 signing, sources said.

“It is very difficult to know what will happen… This is still a moving target,” one foreign mill source said on Thursday March 8, speaking before Trump's scheduled meeting at the White House.

Imports are likely to ramp up again in August and September. Steel offered after the 232 announcement will not arrive at US ports until then; and those offers, unlike those for June-July arrival, are likely to see takers, sources said.

“The end result will be very high prices for American buyers for a while, and then the same amount of imports - so it will be a short cycle,” a second steel trader predicted. “The manufacturers are the ones that are going to pay for this [volatility].”

The potential for such volatility has already pushed some US steel buyers to the sidelines. The market environment resembles that of 2008, when steel prices soared ahead of a deep recession, some sources warned.

One US East Coast distributor recalled ordering foreign cold-rolled coil in 2008 for about $1,200 per ton, a number that seemed attractive when he made the deal. By the time it arrived, US prices had fallen to $600 per ton. “I think we are closer to 2008 than people realize,” he said. “[Current US pricing] makes no sense. And I don’t want to get caught on the downside.”

As a result, his company plans to sell from inventory it had built up earlier this year and to limit buys - perhaps buying only a few truckloads at a time - for as long as possible until the market regains a sense of stability.

Prices still rising
In the meantime, import prices are on the rise. That is thanks to stronger demand in Asia and Europe, as well as generally higher prices for raw materials - with the exception of a recent decline in iron ore tags.

American Metal Market’s price assessment for foreign plate has increased to $760-780 per ton from $680-725 per ton previously.

That material is available from Mexican suppliers at lead times similar to or shorter than those from US mills. But offshore suppliers are either not shipping or are insisting that customers pay any 232 duties that might be owed if they get caught with material on the water.

Prices for imported CRC  increased to $820-830 per ton from $770-810 per ton previously. Those numbers are available for Asian material slated for arrival in the Houston area in August and September, industry sources said.

Meanwhile, the price assessment for imported hot-dipped galvanized (HDG) material with a G30 coating in thicknesses of 0.012-0.015 inches has increased to $980-1,000 per ton from $930-990 per ton previously.

Other coated items, notably Galvalume, could see shortages as a result of the 232, sources warned.