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In a regulatory filing, US Steel has announced layoffs. At a rally last week, President Trump asserted that the US steel industry was "prospering" because of its tariffs.
US Steel has announced layoffs
Reuters reported that US Steel (X) had stated in a regulatory document that it was considering firing some employees from its Michigan plant. The company plans to lay off fewer than 200 employees. In June, US Steel announced the temporary closure of three blast furnaces. The company announced the removal of two blast furnaces in the United States and one in Europe. In the United States, the company idled a blast furnace from the Great Lakes and Gary Works facilities, respectively. US Steel said: "Through these footprint measures, we plan to reduce the monthly production capacity of blast furnaces by about 200,000 – 225,000 tons from July."
Bottom footprint
The announcement of the US Steel layoff should not be a surprise. The company has adjusted its production levels due to the sharp drop in steel prices in the United States. Prices peaked in the first half of 2018 after President Trump's tariffs under Article 232. However, prices have corrected sharply since then. Steel prices in the United States hit troughs of several quarters in June. US mills have joined US Steel shutdown announcement and announced price increases due to anticipated supply discipline US steel prices have seen some traction since the closure of US Steel. its factories.
Trump visited the American factory
Last year, President Trump visited the US facilities in Granite City in the United States. The company slowed the blast furnace in 2015 as steel prices in the United States fell. US Steel has announced the restart of two blast furnaces at Granite City last year in order to take advantage of the rising price of steel in the United States. Overall, life has been wrapped up for American steel. After last year's expansion, the company is considering production cuts and layoffs.
The dismissal announcement comes at the wrong time
The announcement of the US Steel layoff comes at a bad time for President Trump. Last week, he claimed that the US steel industry "thrives" under his presidency. He also said that "the United States Steel and all the others, they are growing everywhere. However, the announcement of the US Steel layoff corrects the claim. Previously, US Steel announced the closure of two blast furnaces the same day that President Trump launched his 2020 campaign.
Asset and steel
US steel stocks, including the United States, AK Steel (AKS) and Nucor (NUE) fell sharply last year, despite President Trump's tariffs. Steel stocks appeared weak this year. However, on several occasions, President Trump said that his tariffs had revived the US steel industry. Last year, President Trump tweeted, "Our steel industry is the topic of global conversation. He has received a new life and is booming. Billions of dollars are spent on new plants across the country! "
On the other side of the coin
The US steel companies have obtained several new projects since the announcement of tariffs. Even foreign steel companies are investing in new US plants. Australia's BlueScope recently confirmed $ 1 billion worth of investment in its US operations. However, some analysts believe that the growing capacity of US steel is a long-term bearish factor in US steel prices.
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