(Bloomberg) -- What a difference a year or so makes.
Starting in 2018, U.S. President Donald Trump has been touting the restorative value of the tariffs his administration imposed on imports that March. “Steel is coming back fast!” he said in a tweet a year ago. In another comment, he said, “These industries, it’s incredible what’s going on. U.S. Steel is building many plants and expanding many plants.”
But fissures have appeared in those declarations. And on Tuesday U.S. Steel Corp., one of the beneficiaries of the president’s metal tariffs, announced that it will be idling two blast furnaces in the U.S., and one in Europe, until “market conditions improve.”
The decision comes amid falling steel prices in the U.S. due to worries of a glut from new capacity planned for the coming years. Major U.S. producers that had announced expansions or restarts include Nucor Corp (NYSE:NUE)., Steel Dynamics Inc., Commercial Metals Co., as well as U.S. Steel.
“In the United States, we began a planned maintenance outage on the Great Lakes B2 blast furnace last week,” the Pittsburgh-based company said Tuesday. “Based on current market conditions, we expect the B2 blast furnace to remain idled after the completion of the planned outage. In addition, we expect to temporarily idle a south blast furnace at our Gary Works facility.”
To be sure, the tariffs did provide an adrenaline rush of energy to the industry. Nucor, the country’s largest steelmaker, and U.S. Steel were among companies that saw significant profit gains in 2018. But on the whole, investors have reason to feel short-changed. The S&P Supercomposite Steel Index has dropped 29 percent in the past year, with U.S. Steel’s 60% drop among the worst of the gauge’s 13 companies.
