Amazon build cuts could hit US steel industry

: Coking coal, Metals
22/06/02

The US steel industry could face further headwinds in the coming months as internet giant Amazon plans to cut back on warehouse investments.

Several metals service centers have reported customers seeing cuts in order backlogs, with one reporting that Amazon-based jobs for conveyor and equipment manufacturers have been pushed back to the fourth quarter or cancelled.

A plate supplier said the Amazon cuts are the first negative fundamental in the plate market in two years, when prices started increasing.

While much of the steel consumption at warehouses is in the form of structural beams and concrete reinforcing bar (rebar), the massive structures Amazon builds also require large amounts of metal siding and other steel materials.

US steel prices have been under pressure in recent months as persistent oversupply and low lead times have dogged the market. The Argus US hot rolled coil (HRC) Midwest ex-works assessment has fallen by 17pc since hitting a near-term peak of $1,500/short ton (st) in April down to $1,250/st. Lead times have hovered around 3-4 weeks for more than a month.

In its first quarter earnings from April, Amazon said it has "excess capacity in our fulfillment and transportation network" and that in 2020 and early 2021 the company made the decision "to not let space be a constraint on our business."

The company now is working to cut back on its warehouse expenditures after overbuilding, after Amazon spent approximately $18bn on fulfillment center warehouses in the 12 months leading to 31 March.

Some steelmakers have recently made downstream investments in businesses that produce products for such warehouses.

Electric arc furnace (EAF) steelmaker Nucor has spent nearly $4.45bn on downstream businesses involved in metal buildings and warehouse services. On 16 May, the company announced it would spend $3bn on overhead door company CHI Overhead Doors. The overhead door market was valued at $5.1bn in 2021, according to a Nucor investor presentation.

The company also bought two steel racking companies and an insulated metal panels manufacturing business.

On top of this, the US is on track to add 6.3mn st/yr of new flat-rolled and plate steelmaking capacity in 2022.

By Rye Druzin

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25/05/08

Trump to grant partial tariff relief to UK

Washington, 8 May (Argus) — The US will carve out import quotas for UK-produced cars and, eventually, reduce tariffs on UK steel and aluminum, under a preliminary deal US president Donald Trump and UK prime minister Keir Starmer announced today. The Trump administration will allow UK car manufacturers to export 100,000 cars to the US at a 10pc tariff rate, instead of the 25pc tariff to which all foreign auto imports are subject. The US and the UK will negotiate a "trading union" on steel and aluminum that will harmonize supply chains, US commerce secretary Howard Lutnick said. The US commended the UK government on taking control of Chinese-owned steelmaker British Steel last month. As a result of that action, under yet to be negotiated arrangements, the US would reconsider the UK's inclusion in its 25pc tariffs on steel and aluminum, the White House said. Starmer, speaking after the ceremony, told reporters that US tariffs on the UK-sourced steel and aluminum would, in fact, fall to zero. Trump announced the deal during a ceremony at the White House, with Starmer phoning in. The two leaders suggested that their preliminary deal was as significant as the end of World War II in Europe, 80 years ago. But that deal, which Trump described as "full and comprehensive" hours before its announcement is anything but that. Under the "US-UK Agreement in Principle to negotiate an Economic Prosperity Deal", the US will maintain the 10pc baseline tariff on nearly all imports from the UK that went into effect on 5 April, Trump said. The UK, Trump said, would lower the effective rate on US imports to 1.8pc from 5.1pc. The actual details of the agreement are yet to be negotiated. "The final deal is being written up" in the coming weeks, Trump said, adding that it was "very conclusive". Boeing, beef and biofuel The UK would commit to buying $10bn worth of Boeing airplanes, Trump said. He described the UK market as "closed" to US beef, ethanol and many other products, and said that the UK agreed to open its agricultural markets as a result of his deal. US ethanol exports to the UK, in fact, rose by 23pc year-on-year in March. Under the deal, the UK would expand market access to US ethanol, creating $500mn more in US exports, the White House said. The UK will reduce to zero the tariff on US-sourced ethanol, the UK Department of Business said, adding that "it is used to produce beer". Trump previewed the preliminary deal with the UK as the first of the many trade agreements the US administration is negotiating with many other countries. Trump contended today that there are trade talks underway with the EU and expressed confidence that the US-China trade discussions expected over the weekend would produce results. But Trump added that he will not lower the high tariffs on imports from nearly every US trade partner he imposed last month and described the UK's 10pc tariff rate as a favor to that country. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

India-UK FTA cuts tariffs on Indian auto imports

25/05/08

India-UK FTA cuts tariffs on Indian auto imports

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US Fed holds rate, awaits 'clarity' on tariffs: Update

25/05/07

US Fed holds rate, awaits 'clarity' on tariffs: Update

Adds Powell comments, CME, GDP data. Houston, 7 May (Argus) — US Federal Reserve policymakers kept their target interest rate flat today for a third time this year, noting that economic "uncertainty" has increased, while signaling they would continue to monitor the impacts of the new US administration's policies before adjusting monetary policy. The Fed's Federal Open Market Committee (FOMC) held the federal funds rate unchanged at 4.25-4.50pc. The Fed has held the target rate unchanged this year after three rate cuts late last year lowered the target rate by 100 basis points from a two-decade high of 5.25-5.5pc after the Fed sharply hiked rates from near zero to battle inflation that topped 9pc in 2022 during the overheated recovery from the Covid-19 slump. "If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment," Fed chair Jerome Powell told reporters after the decision. "All of these policies are still evolving however, and their effects on the economy remain highly uncertain." Powell also noted that "we are entering a new phase where the administration is entering into beginning talks with a number of our important trading partners and that has the potential to change the picture materially." US economic growth contracted by an annual 0.3pc in the first quarter of 2025 following 2.4pc growth in the fourth quarter. It was the first quarter of negative growth in three years and raised concerns that the US may be entering a recession amid a raft of poor consumer and business confidence surveys. But Powell pointed out that the driver of the first-quarter contraction was a "distortion" caused by a spike in imports, which subtracts from GDP growth, as businesses stocked up on inventory from abroad to get ahead of the tariff impacts. Overall, he said, "the economy is growing at a solid pace, the labor market appears to be solid. Inflation is running a bit above 2pc. So it's an economy that's been resilient and in good shape." The Fed earlier penciled in two likely quarter point rate cuts this year, but the administration of President Donald Trump's chaotic rolling out of tariff and federal spending policies has continued to push back the likelihood of cuts to the federal funds rate, as measured by the CME's FedWatch tool, to the back half of the year. FedWatch, after Wednesday's decision, sees a 23.3pc probability of a quarter point cut at the June Fed meeting, down from 30.5pc Tuesday. Odds of a quarter point cut in July were little changed at 57pc from the prior day. "Ultimately we think our policy rate is in a good place to stay as we await further clarity on tariffs and ultimately their implications for the economy," Powell said. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US Fed holds rate steady, keeping eye on tariffs

25/05/07

US Fed holds rate steady, keeping eye on tariffs

Houston, 7 May (Argus) — US Federal Reserve policymakers kept their target interest rate flat today for a third time this year, noting that economic "uncertainty" has increased while signaling they would continue to monitor the impacts of the new US administration's tariffs and other policies before adjusting monetary policy. The Fed's Federal Open Market Committee (FOMC) held the federal funds rate unchanged at 4.25-4.50pc. The Fed has held the target rate unchanged this year after three rate cuts late last year lowered the target rate by 100 basis points from a two-decade high of 5.25-5.5pc. "Uncertainty about the economic outlook has increased further," the FOMC said in its statement. Policymakers "will carefully assess incoming data, the evolving outlook, and the balance of risks" in considering additional adjustments to the target rate, the statement said, echoing language from prior statements. Fed funds futures markets early Wednesday gave a 73pc probability the Fed's first rate cut of 2025 would be at the July meeting. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

High sulphur prices pressure Indonesian buyers

25/05/07

High sulphur prices pressure Indonesian buyers

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