Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Allegheny Technologies is trying to rally the public in support of tariff exemptions.


The company’s chief executive officer, Robert Wetherbee has claimed in an op-ed that Allegheny may be forced to close its Midland facility because of heavy losses incurred by Section 232’s 25pc tariffs on Indonesian-sourced slab. Moreover, the plant is operating at reduced capacity utilization.


The Midland steel plant opened a couple of years ago expecting a robust environment for steel sales, especially in light of the Trump administration’s promises to protect American industry. Two years forward Wetherbee is claiming input costs are unreasonably expensive. Only three US companies produce the nickel-rick stainless steel slabs needed for processing Allegheny’s end products, with one competitor quoting raw materials costs that are higher than the company’s finished products. 


Wetherbee warns that unless new business for domestic mills is generated, there will be plant closures and workforce reductions.


Allegheny previously filed an exclusion from tariffs on 300,000nt (272,232mt), or approximately 12pc of the US stainless steel market, but was denied the exemption on the basis that it could source alternative slab domestically. The tariff added $40mn to its annual production costs.


The company filed another exclusion late last year requesting 150,000nt of tariff-free slab imports to supplement the majority of its needs. Wetherbee asserts that, if the exclusion is once again rejected, the Midland plant will close within months. 

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