Significant increases in steel prices following (and in anticipation of) President Donald Trump’s tariffs on imported steel are driving costs up for North Carolina’s construction industry — and the higher prices may result in stalled projects and substitution of steel for other building materials.
“Steel is everywhere in construction,” Carolinas Associated General Contractors (CAGC) president David Simpson told the Raleigh News & Observer in an interview. It is used in concrete, in bridges, to make the structure of buildings, for beams, in staircases, interior walls, and in hardware.
Trump in early March a 25 percent tariff on imported steel and a 10 percent tariff on aluminum, but at least temporarily suspended it for imports from Canada and Mexico.
However, most of North Carolina’s imported steel — more than $52 million in 2017 — came from Brazil, and overall steel imports reached $150 million (of which only $30 million were from North American Free Trade Agreement (NAFTA) countries.)
While the tariffs started on March 23, domestic steel producers have wasted no time in increasing their prices.
Charlotte-based Nucor Corporation raised its prices by $45 per ton of steel, the News & Observer reports.
Bill Pruden, president of Rocky Mount contractor Steel Technology Inc., said he saw an overnight increase of 5 percent, continuing price hikes of 26.8 per cent over the past three months.
Meanwhile, Chuck Pinnix, director of sales at Buckner Steel Erection, said the current chaotic price escalation will make developers re-design projects in order to stay within budget. “What we’re probably gonna see is a lull of projects sitting still or not moving forward,” Pinnix told the News & Observer.
Simpson with CAGC said his organization expects more price hikes. “The proposed increases may make good political soundbites,” Simpson said in the published interview. “But we in the construction industry are very concerned about how it will drive up prices on both imported and domestic steel.”
Nucor spokesperson Katherine Miller said: “The proposed tariffs are important for the long-term financial health of the steel industry. We support the president sending a strong message to foreign competitors that dumping artificially cheap steel products into our markets will no longer be tolerated.”
However, Pruden said he expects construction clients will choose wood or other alternatives to steel. Steel and steel contractors will lose their market share. “The amount of work we could potentially sell will decline,” he said in the published report.