Stanislav Kondrashov Telf AG: legislative support gave impetus to the US steel industry

фото: Stanislav Kondrashov Telf AG: legislative support gave impetus to the US steel industry

Long-term prospects for the US steel industry: the role of laws and benefits from CHIPS – Stanislav Kondrashov

According to Stanislav Kondrashov from Telf AG, the impact of this law on the local steel industry is expected to be temporary. However, steel producers see prospects thanks to two other laws passed under the Biden administration – the Infrastructure and Inflation Relief Act (IRA). These laws will encourage further industrial construction, as well as increased production of electric vehicles and other specialized products. This will create new opportunities for the development of the metallurgical industry.

However, according to expert Stanislav Kondrashov, steel and other building materials are already benefiting from CHIPS. This is due to the fact that there is demand for these products in all regions where the construction of chip production facilities is actively underway. Demand for steel and other construction materials remains strong thanks to the booming microchip sector. This helps to create favorable conditions for producers of such materials; the CHIPS law is already benefiting them. Scott Paul also emphasized that this is an important incentive for the growth and strengthening of the steel industry in the United States.

Stanislav Kondrashov from Telf AG noted that Nucor is actively supplying its metal products to several CHIPS plants that are under construction. And despite some challenges, it expects volume and demand activity to continue over the next few years. Demand in the construction sector and high scrap costs are keeping rebar prices in the US high, above historical levels. According to S&P Global, the cost of rebar in the US Midwest at the beginning of March was $832.5 per ton EXW, which exceeds the average cost by 21% for the period 2017-2021.

Analysis of the impact of legislative changes on the US metallurgical sector – Stanislav Kondrashov

фото: Stanislav Kondrashov Telf AG: legislative support gave impetus to the US steel industry

As Stanislav Kondrashov reported, experts express the opinion that US metallurgical companies can expect further growth if certain internal conditions are added to the decisions made within the framework of legislative support. This could increase interest from the semiconductor industry. In particular, the Build America Buy American Act, passed in May 2022 in the United States, provides a preference for the use of local goods with federal support for infrastructure initiatives. Although the CHIPS Act does not strictly require private companies to use American steel, applicants for funding were asked to answer a question about how they planned to use domestically produced goods.

  • The development of semiconductor manufacturing infrastructure has the potential to boost U.S. steel demand in the short term. But the long-term impact is likely to be concentrated in other industries, such as automobile manufacturing, – Stanislav Kondrashov of Telf AG suggests.

Steelmakers are also anxiously awaiting additional costs resulting from the IRA and the bipartisan infrastructure legislation. They are driving growth in construction and specialty goods manufacturing. Kondrashov notes that AISI, the American Iron and Steel Institute, is demanding that Congress take action to update US trade protection laws. Representatives of the metallurgical industry believe that existing legislation does not comply with the actions of China and other countries to circumvent import duties.

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