Unpredictable U.S. trade policy is complicating long-term investment in stainless steel production. Participants at the Stainless Steel World Americas Conference and Expo noted that import tariffs imposed under Section 232 do not resolve the industry's problems: domestic capacity is insufficient for some products, and buyers are changing their procurement practices.
At a panel moderated by Marcus Kind of Rolf Kind USA, representatives of Alleima, Bollinghaus Steel Americas, TotalEnergies and McDermott discussed how trade measures are affecting supply, investment and procurement strategies. Matthew Cowba, CEO and managing director of Bollinghaus Steel Americas, stressed that it is difficult to plan major investments when trade rules can change.
“You can't have policy changing all the time,” Cowba said, speaking about the need for consistent and predictable decisions.
The tariffs are intended to stimulate U.S. steel production, but panelists questioned whether current conditions give companies enough confidence to expand capacity. Building new facilities and developing metal processing operations require years of investment before they begin to pay off.
Alexandria Kusoffsky, president of Alleima's Tube Americas division, noted that trade measures have had a greater impact on buyers' behavior than on demand for stainless steel itself.
“Trade measures don't necessarily change demand. They change people's behavior,” she said.
According to research by MEPS for the Stainless Steel Report, U.S. buyers have become more cautious about placing orders amid uncertainty over future tariffs and material costs. Cowba said distributors and end users are now less willing to hold several months' worth of inventory.
As buyers shift to short-term purchasing, distributors are playing an increasingly important role in ensuring metal availability. At the same time, financing inventories, transportation and storage are becoming more expensive.
Conference participants also pointed to constraints on domestic production, particularly in specialty grades, sizes and product types. The U.S. produces stainless steel in flat and long products, but supplies of some materials with demanding technical specifications still depend on overseas producers.
TotalEnergies corrosion specialist Jose Comas explained that imported steel cannot always be replaced with domestic alternatives, particularly in refining and other industries with stringent material requirements.
“It's very difficult to change the specification because it depends on the process,” he said.
Changing materials can affect equipment performance, service life and maintenance costs. Any savings on procurement therefore need to be weighed against the potential costs of more frequent shutdowns or premature equipment replacement.
Switching to an alternative supplier requires technical approval, certification and testing. For critical applications, these procedures can take several months, making it difficult to respond quickly to supply disruptions and changes in trade restrictions.
Increasing output requires more than raising steelmaking volumes: additional capacity for rolling, processing and finishing specialty products may also be needed.
Kusoffsky stressed that investment depends on sustained demand and the ability to supply products for a range of applications.
“It's repeat orders across different applications that drive us to invest,” she said.
More accurate demand forecasts and early engagement between producers and end users could help identify where additional capacity is needed. However, buyers are reluctant to make long-term commitments.
Participants also cited labor shortages as another obstacle. Cowba said it is becoming harder for companies to hire and retain employees, and warned that the situation could worsen over the next five years.
“It's already difficult. The next five years will be even worse,” he said.
At the same time, panelists see opportunities to increase stainless steel consumption in energy, infrastructure and data center construction. Cowba noted that the expansion of U.S. data center capacity is increasing demand for specialty long products.
In the view of conference participants, capitalizing on these opportunities and strengthening domestic supply chains will require more than import restrictions. Predictable trade policy, closer cooperation between producers and end users, and investment in specialty production are all important.
