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NYC Aluminum Distributors Already Feeling Impact of New Steel Tariffs

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In anticipation of the White House’s proposed 25 percent surcharge on foreign steel and 10% on aluminum, builders and distributors are already feeling a surge in the prices of the metals needed for building sites. The actual collection of tariffs will not begin till March 23. President Donald Trump tried to provide some reprieve last week, as he announced that Canada and Mexico would be temporarily exempted and that other countries may be spared as well, though the other exempt countries have not yet been revealed. For steel and aluminum parts not available from U.S., such as the high-strength steel rod used to make tire belts producers, Trump has rolled out an exclusion. Still, users may need to wait up to 90 days for the exclusion to take effect, paying the tariff in the meanwhile, as per a Commerce Department document.

The work of US Steel Corp in Michigan

As reported by Crain’s NY, foreign shipments of the metals have already shrunk, giving domestic producers full control over the market and the ability raise prices. The market has not experienced a freedom from competition since similar tariffs were established by former Republican President George W. Bush. “We haven’t seen anything like this in 16 years,” said Darren Kahn, head of East Coast sales for Triad Metals International, a distributor that sells steel to local fabricators and developers. “It’s like I’m selling gold right now.” He says that he is now selling steel tubing for about $62 per hundred pounds, whereas in November he as selling them for $38.90. Fabricators and builders have expected an even more dramatic increase, and some are stocking up even at these higher prices. Construction costs in NYC are already the highest in the world, overtaking Zurich, as per a report by Turner & Townsend last year.

Since November, Plate steel prices have risen roughly 15% in NYC. At the same time, the price of beams, which is the most common product sold in the city and the biggest metal expenditure for a typical steel-skeleton skyscraper, rose at a rate of approximately 10% or more over the same period.

Last week, Crain’s had speculated that NYC’s five boroughs would not see much change in prices, as most buildings are produced domestically anyways. However, as fabricators and distributors argued, U.S. steel mills had been lowering prices low to compete with cheaper foreign products, and they will be free to raise prices once the tariffs were enforced.

By Ilana Siyance

 

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