SMU Data and Models
SMU Market Trends: Is Infrastructure Next?
Written by Tim Triplett
December 21, 2017
In addition to the tax overhaul passed by the Republicans this week, President Trump has promised a trillion-dollar infrastructure overhaul. Given the possible $1.5 trillion cost of the tax cuts, will the public have the stomach for another big bill to fix the nation’s aging roads and bridges?
Respondents to Steel Market Update’s market trends questionnaire this week were evenly split on whether to expect an infrastructure package out of Washington that will boost steel demand next year. Their comments fall into four groups: those who are hopeful for at least some additional infrastructure spending, those who believe there is no way Congress will tackle another big spending package, those who point out there will be no effect on steel demand next year even if an infrastructure bill is passed, and those who see politics preventing anything positive. Following is a sampling of comments from steel buyers.
From the hopeful:
- “Not sure how big, but they will pass something on infrastructure.”
- “They will try, but it will likely be trimmed down.”
From the doubtful:
- “After the tax bill is signed, how will the federal government finance a big infrastructure bill? Increase the deficit even more? Not going to happen.”
- “Infrastructure is the one legislation that both parties can agree on, although they would argue over the total amount and how to fund it [given the tax bill’s passage].”
From the pragmatic:
- “Even if passed quickly, it will be 18 months to two years before it will effectively change demand. Will it cause a blip in pricing? Sure, but no effect on demand for a while.”
- “Even if they do pass a bill, it will take time before steel demand is impacted in a positive way. 2019 would see the new demand from a bill if passed in 2018.”
From the disillusioned:
- “I do not expect this administration to get much accomplished.”
- “Tough to get any Democrats to support any initiative by the Trump administration.”
- “I have no faith in Washington to move any cohesive agenda forward.”
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
SMU’s June at a glance
A look at SMU data for the month of June.
SMU Survey: Buyers’ Sentiment rebounds from multi-year low
Both of SMU’s Steel Buyers’ Sentiment Indices edged higher this week. Current Sentiment rebounded from a near five-year low, while Future Sentiment rose to a two-month high
SMU flat-rolled market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members.
SMU Survey: Sheet lead times pull back after early-June blip, plate holds
Following the uptick seen two weeks ago, lead times eased this week for all four sheet products tracked by SMU, while plate lead times held steady, according to this week’s market survey.
SMU Survey: Pricing power abruptly shifts to steel buyers
The majority of steel buyers responding to our latest market survey say domestic mills are more willing to talk price on sheet and plate products than they were earlier this month. Sheet negotiation rates rebounded across the board compared to early June, while our plate negotiation rate hit a full 100%.