AZZ sees tariffs boosting demand for US-made coating solutions

Specifically, the company sees an opportunity in the tariffs in that they will make imports more costly, and thus domestic material more attractive.

David Nark, chief marketing communications and IR officer, said that “prepainted imports, in particular, account for about 10% of the volume that comes in,” which equates to about 800,000 tons annually.

“We do believe that a portion of that will be looking for domestic supply,” Nark continued. “And, obviously, being a leading coil coater here in North America as they source domestically, it stands to reason that we’ll pick up some tailwind from that this year.”

Zinc not hit by tariffs

“Currently, our zinc-contained supplies have not been impacted by the tariffs,” Ferguson said.

Nark pointed out that at the moment zinc is, in fact, exempt from the current tariff regime.

“As we look at zinc, one of the things, I think the biggest thing to note, is that it is listed on the Annex 2 list that came out from the administration as something exempt from the tariffs,” Nark said.

So while the US is a net importer of zinc, “the vast majority of ours comes from North American sources. And again, it’s not an impact for us, because it’s on the exempt list.”

Still dealing with inflation

However, Ferguson said the Fort Worth, Texas-based firm is pushing prices up, even as their suppliers have also noted that they don’t have any tariff-related concerns yet.

Ferguson cited as a reason that “while we’re not impacted on the zinc and paint side from a cost perspective, a lot of other things we have seen inflation on, whether that’s due to tariffs, or just due to suppliers taking opportunities.”

While their biggest inputs, paint and zinc, have not been affected by Trump’s tariffs, CFO Jason Crawford said that more broadly, “I think it’s hard to believe that there’s any company out there that’s not been impacted by tariffs.”

Ferguson gave as examples things like wire additives and chemicals.

“So those secondary supply items in both segments, have been impacted,” Ferguson said. “But like I said, we’re trying to push price and also negotiate.”

He added: “And in a lot of cases, we’re still fairly large customers, for certain of those items. So we’re in a reasonably good position, and have not seen much negative impact at this point, if any.”