The prices for United States steel have been dropping and plant closures continue in the wake of President Donald Trump’s ongoing trade war with China. After a small and brief recovery in June, layoffs and plant closures thanks to bankruptcies have returned.
There have been more job losses in the industry as steel prices have fallen this year. According to Market Realist, Bayou Steel Group filed for bankruptcy on Tuesday and the company laid off 376 workers. U.S. Steel and ArcelorMittal also curtailed some of their facilities. U.S. Steel idled two of its US blast furnaces earlier this year and the company expects those blast furnaces to be idle until at least the end of the year.
According to the Japan Times, Louisiana’s Governor John Bel Edwards said: “While Bayou Steel has not given any specific reason for the closure, we know that this company, which uses recycled scrap metal that is largely imported, is particularly vulnerable to tariffs” In the release, the company said that the bankruptcy was triggered “by severe lack in liquidity at the Company, which resulted in a default with its senior secured lender, and created a situation where the Company could no longer purchase raw materials.”
Last month, U.S. Steel and Nucor released downbeat third-quarter earnings guidance. The earnings could fall more in the fourth quarter because steel prices weakened last month. As more contracts roll over, companies could see their average selling prices deteriorate more.
A severe lack of liquidity coupled with an inability to cope with the additional costs the tariffs have imposed upon businesses has been a running problem in the U.S. economy for most of this year. The bottom line is that steel prices are weaker due to global weakness and tepid U.S. demand and a large part of that is due to the tariffs and trade war.
The bad news continues for large swaths of the American economy and steel is no exception. Businesses have struggled under the weight of added expenses, falling prices, and a lack of demand. None of which can be fixed by using centralized authority to control the trade of people.
What if American goods were made of heirloom-quality materials, rather than designed for obsolescence.
Either, you believe in Bastiat’s Broken Window Fallacy, or high value would create a dignified, honorable market for steel, upholding my standard of living.
I worked in the steel industry (Bethlehem Steel) for several years while attending University. I saw the demise of the steel industry firsthand and its impact upon American workers, families, & taxpayers as the NWO systematically offshored 70,000 American Factories and tens of millions of American jobs to enrich the Uber Rich Investment Class.
“Bayou Steel” is a RE-PROCESSOR, hardly a major steel company, which has been impacted by “global weakness”, “falling prices” and “a lack of demand”; all symptoms of a business downturn after a ten year expansion.
TRUMP TARIFFS have NOTHING to do with the downturn in the steel industry. On the contrary TRUMP’S TARIFFS And his America First policies are designed to return steel production to the United States. Demand for American Steel will rebound in his Second Term as infrastructure rehabilitation begins.
Bayou, specifically, is a “victim” of it’s own bad business & financial management. The company should have retained more earnings to bolster its cash position, established other lines of credit, and bought it’s scrap metal from India where they dismantle and recycle obsolete ships.
I suspect that a closer review of Bayou’s financial statements for the past five years will reveal massive transfers of cash bonus’ to its management team & stock repurchases have led to its liquidity crisis. That’s the typical scenario as management steals from its shareholders. 🙂
The US steel industry was decimated back in the 80’s and 90’s with the exportation of US Jobs, thus went the steel. If the US Transportation Infrastructure program took off, so would jobs and steel manufacturing. Need to diversify and stop subsidizing these one trick ponies. Thus the rust belt.
it seems to me that
“Businesses have struggled under the weight of added expenses, falling prices, and a lack of demand.”
is the real problem. Tariffs were supposed to help the American steel producers by making imported steel prices closer to American prices . America doesn’t export much steel.
I also caught this one
“Bayou Steel has not given any specific reason for the closure, we know that this company, which uses recycled scrap metal that is largely imported, is particularly vulnerable to tariffs”.
That doesn’t sound like a “Domestic” steel producer.
I stream a Midland, TX, radio station(I can only get NPR which I despise). I get the farm prices, oil, and stock prices everyday.
Sounds to me like things are pretty good, at least in TX.
America’s problem is the Governments, Unions, and the Democrat party War against America.
Full disclosure; Most my working life I was in a union.
Just to show how stupid the article is. U S steel has just paid 700 million to buy 49.9% of the steel mil at Oceola Ark. and has a contengencyl plan to buy the remaining 50.1% . And that mill is expanding to double their production.
^ Extra respect is owed to this person, who found things out, on his own.
And here’s a few links for MAC to read up on since all he reads is the propaganda sites- aka lamestream media!
YEP! Trump has OBVIOUSLY decimated the steel industry!!!!!!!
News, the death of the American steel industry started in the
late 1960’s and early 1970’s with the importation of Japanese steel. It was accelerated with the visit of Nixon to China. This is just the final death knell.
Several fake news items, posted over the last month, and they put their name on it, without verifying first.
No wonder this site is dying. Practically every post is BULLSHIT.
NO- Trump didn’t “decimate” the steel industry.
NO- Trump isn’t “killing local farmers due to tariffs”.
NO- Trump isn’t the worst president.
NO- Trump isn’t the reason for all the worlds problems!
NO- Trump’s policies aren’t going to lead to a depression/recession
But according to Mac, all these are true! WTF fucked up reality do you live in anyway??
STOP with these BS opinion posts.
As others have said, this article is pure propaganda, hype and misinformation. How can it be cheaper for a company to import scrap steel from overseas as opposed to buying scrap steel locally??? While there may be profit loss now, if companies actually went back to making and manufacturing their goods in the US it would create a much stronger more healthy economy where not only the CEOs and exec’s profit, but the workers would as well! Say it with me, “Embargo all goods from China!!” Embargo to save America!
Mac pay attention! only 11 post and everyone calling it a bullshit article. Do some fact checking. The stock market is still up. job numbers are up. wages are up. illegal immigration has slowed consederably. catch and release is over. Lamblast the dimocraps. Quit printing half truths and outright lies.