At AK Steel, President Trump’s tariffs on metals imports boosted prices this spring even more than Chief Executive Officer Roger Newport predicted.
The West Chester, Ohio-based company said Monday that it was able to charge $1,101 per ton of flat-rolled steel in the three months through June, a 5 percent increase from the beginning of 2018. Newport, who has praised the White House’s move to protect the U.S. steel industry, had told investors in April that prices would rise to at least $1,075 per ton.
Total revenue, meanwhile, climbed 12 percent to $1.75 billion as the producer joined rivals including Charlotte, N.C.-based Nucor benefiting from one of Trump’s initial forays into protectionism. Escalating tariffs against both allies and competitors in the months since have left the U.S. at odds with a number of other nations and prompted significant retaliation that economists and some Republican lawmakers say could undermine the benefits from last year’s tax cuts.
“We continue to support the administration’s actions to address global steel overcapacity and unfair trade practices,” Newport said on an earnings call Tuesday morning. “We believe that other countries with whom the U.S. is negotiating must take similar decisive actions to address the problem of Chinese steel overcapacity.”
In the meantime, demand from AK Steel customers is strong, Newport said, and he expects the healthy business environment “will result in improved performance in the second half of 2018, compared to the first half.”
Earlier this month, Steel Dynamics and Nucor both reported doubling profit in the second quarter, noting higher demand for American-made metal after Trump’s tariffs. While the duties are widely unpopular outside the steel industry, the White House has said they’re necessary to level the playing field with competitors. Steel Dynamics’ net income of $362 million compared with $154 million a year earlier, while earnings at Nucor reached $683 million.
The U.S. steel market is reaping the benefits of a “reduction in unfairly traded imports entering our country as a result of years of successful trade cases, and the broad-based tariffs,” Nucor CEO John J. Ferriola told investors in mid-July.
Imports fell more than 7 percent in the first half of the year, he said, as the U.S. sent a clear message that it’s through “asking nicely for compliance with the rules of trade and is serious about demanding changes in the trade practices of other countries.”
AK Steel fell 9 percent to $5.36 after the close of regular trading, broadening its decline so far this year to 5.3 percent, as net income dropped 27 percent to $56.6 million. Its profit of 18 cents on a per-share share basis trailed the 21-cent average from analysts surveyed by FactSet.
