north american steel market – Imperial Steel Products Ltd.

The Trans Pacific Partnership (TPP) is under negotiation and the impacts for the auto-parts manufacturing industry in North America are of great concern. Under the current North American Free Trade Agreement (NAFTA) requirements, a regional value content (RVC) of 62.5 per cent must be attained for automobile parts and light-duty vehicles and 60 per cent for other segments of the auto industry. This could be decreased to 50 per cent under the TPP.

The impact for not only steel and other auto parts manufacturers but for the automobile industry itself would be extremely detrimental. The decrease in RVC would offer an advantage to producers whose primary supply chain is outside of the TPP region. For steel producers providing products such as tubing and piping to the automotive industry, an RVC disadvantage within the TPP would encourage off-shore sourcing and supply, creating devastating consequences for North American economies.

The Canadian Steel Producers Association has issued a joint press release together with the American Iron and Steel Institute and Mexico’s CANACERO to make governments aware of the impact of this potential decision. A strongly worded letter was released on September 22 addressed to Ed Fast, Canadian Minister of International Trade, Ildefonso Guajardo Villarreal, Secretary of Economy of Mexico; and United States Trade Representative Mike Froman, outlining their concerns.

At Imperial Steel, we support these efforts to ensure a healthy steel industry. Imperial Steel produces piping and tubing products for both the automobile and agricultural industries. These include galvanized, aluminized, welded, hot rolled and cold rolled steel tubing. For more information on our products visit us at imperialsteel.com

You might have heard many business owners moan about seasonal conditions, fluctuation in currency exchange rates and raw material price fluctuations but did you know that they are right in making all the noise because of the significance of all these elements on steel prices. There are many other aspects, which makes it extremely difficult to predict and prepare for the future.

Currency Rates
Regular volatility of currency rates makes it almost impossible for you to predict the value of steel in the coming years. An abrupt increase or decline in currency rates is nothing new, but that can have negative or positive consequences for steel dealers. Currency volatility directly affects the prices of steel. You must also have sound knowledge about factors that bring about changes in currency rates to better anticipate the future.

Seasonal Conditions
When real estate, automotive and agricultural industries thrive in a particular economy, it will automatically have an impact on the market of steel. More steel will be produced and sold. This will suddenly spark a sharp increase in the demand for steel. You cannot completely neglect the time factor when looking at the demand “pull and push” factors because they also play a pivotal role in the complete cycle. For instance, the demand for umbrellas will always increase in cloudy and rainy seasons, while remaining stagnant in other seasons such as spring and summer. Similarly, in some seasons the demand for steel increases while it remains stable during other seasons.

Here at Imperial Steel, we have remained forward-thinking throughout many decades and will continue to conduct business that way so that our clients can reap the benefits of our knowledge of the changeability of the steel industry. Talk to us about your steel needs.