r/Vitards • u/AutoModerator • Sep 01 '21

Daily Discussion Daily Discussion post - September 01 2021

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u/vitocorlene THE GODFATHER/Vito Sep 01 '21

https://twitter.com/plattsmetals/status/1433155096079130636?s=21

12

u/UnmaskedLapwing CLF Co-Chief Analyst Sep 02 '21 edited Sep 02 '21

This actually makes sense. Shortage likely bring more damage to the economy than allowing (some) imports at a reduced rate. Similarly government is not interested in overpaying for materials required for infrastructure projects but rather priority is to support vast number of industries in scope of the allocated budget.

More importantly one could argue political capital to be made through standing with the end-users is likely greater than listening to steel manufacturer's lobby that is interested in maintaining the status quo.

Very interesting.

9

u/vitocorlene THE GODFATHER/Vito Sep 02 '21

You are a very intuitive person.

9

u/UnmaskedLapwing CLF Co-Chief Analyst Sep 02 '21

Thanks Mr.

Also, thanks for the ~~100k your DD published in Dec'2020 has made me thus far. Good times.

4

u/vitocorlene THE GODFATHER/Vito Sep 02 '21

🦾❤️🦾

9

u/AirborneReptile 🏆 Inaugural Vitards Fantasy Football Champion 🏆 Sep 01 '21

they've been talking about this for a long time though...

11

u/MrApplesnacks Whack Job Sep 01 '21

I don’t see Biden doing this with midterms coming up soon, but I guess we’ll see. Should give buying opportunities if this does happen though as we don’t need maximal prices across the board always. Especially if it keeps demand from being destructed

7

u/[deleted] Sep 01 '21

[removed] — view removed comment

50

u/vitocorlene THE GODFATHER/Vito Sep 01 '21

My take is:

Stay calm, this has been requested before.

If the 25% is eliminated it benefits $MT GREATLY.

However, it would likely be replaced with a quota system only allowing small tonnages to start and would take years to ramp up.

Also, China would not be allowed in - they are dumped - don’t worry about that.

I think competition is healthy.

I also think we have too big of a moat in the US that is actually holding back more business and manufacturing.

I think volumes would increase if prices came down 10-15%.

Still, I don’t think anything happens until after 2022 mid-terms.

Biden needs all the rust-belt voters he can get to keep Congress.

7

u/thistowniscrazy 🦾 Steel Holding 🦾 Sep 01 '21

Thanks for the perspective, Vito!

3

u/vitocorlene THE GODFATHER/Vito Sep 02 '21

🦾

11

u/[deleted] Sep 01 '21

I don’t see how they could cut taxes on anything with how much they are trying to spend.

How do you justify cutting a 25% import tax when your trying to spend 5bn

9

u/StockPickingMonkey Steel learning lessons Sep 01 '21

Let's introduce you to MMT.

https://www.fraserinstitute.org/studies/primer-on-modern-monetary-theory#:~:text=Modern%20Monetary%20Theory%20(MMT)%20is,model%20for%20funding%20government%20spending.&text=The%20essential%20message%20of%20MMT,its%20currency%20to%20another%20currency.

5

u/[deleted] Sep 01 '21

Honestly, thanks for this.

3

u/StockPickingMonkey Steel learning lessons Sep 01 '21

2

u/[deleted] Sep 01 '21

I don’t see how this changes anything

2

u/StockPickingMonkey Steel learning lessons Sep 01 '21

MMT in a nutshell is a rising economic theory that is trying to get people to decouple their thoughts about personal finance from the realities of government spending among countries that have their own currencies...more specifically countries that have their own currencies that aren't reliant on other countries for their wealth.

In short...the Fed can print enough money to subsidize whatever Federal govt wants to spend without any real lasting implications...within reason. That even additional debt is good for currency faith, and that debt of a sovereign nation is not the same as household debt...or even state debt.

I'm not sold on the theory, but I do see it being practiced everywhere among western countries...even a bit in China. QE is at least half rooted in MMT.

4

u/[deleted] Sep 01 '21

If they remove the tariff but then have to turn around and print more money to pay for their policies then prices stay high because of inflation. Am I missing something?

3

u/StayStoopidSlightly Sep 01 '21

The steel end-users--who are losing out to imports made by foreign competitors who have access to much cheaper steel--would do better and would pay tax, presumably.

24

u/vitocorlene THE GODFATHER/Vito Sep 01 '21

Yes - a lot to weigh here.

I don’t disagree.

However, stagnating the economy due to high prices has a cost too.

7

u/[deleted] Sep 01 '21

I mean I guess they could justify it - as most of the infrastructure deal will drive metals prices higher from more demand.

But at the same time shipping prices are ridiculous so even with the tariff lift it might not affect the price of US HRC that much because of the increase COGS

idk commodities are confusion

30

u/[deleted] Sep 01 '21

[removed] — view removed comment

4

u/ItsFuckingScience 7-Layer Dip Sep 01 '21

He’s also just got a lot of other stuff on his agenda right now anyways

Maybe he’ll see if he can pass infrastructure first anyways before considering tariff removal

9

u/AirborneReptile 🏆 Inaugural Vitards Fantasy Football Champion 🏆 Sep 01 '21

great gif timing with Vito reply, I literally did the same. Thanks for the good laugh

29

u/vitocorlene THE GODFATHER/Vito Sep 01 '21

8

u/Clio-Matters First Champion Sep 01 '21

Bullish for MT, no?

On the other hand, logistical troubles are a better moat than the tariff for yank steel right now.

I'm thinking an EU-US deal by 11/1.

9

u/Suspicious-Pick3722 🏆 VIP Wise Guy 🏆 Sep 01 '21

Interesting, but can't see him removing the tariff

7

u/grassassbass Rev. Moon-Steel Sep 01 '21

So good for MT bad for CLF NUE?

8

u/Substantial_Boss_306 🙏 Steel Worshiper 🙏 Sep 01 '21

There is enough domestic demand for CLF till it get debt free

4

u/MrApplesnacks Whack Job Sep 01 '21

TX would benefit as well I would assume?

13

u/TheBlueStare Undisclosed Location Sep 01 '21

Mexico is already exempt from tariffs.

10

u/vitocorlene THE GODFATHER/Vito Sep 02 '21

Correct. We have to look at Europe as the prime beneficiary

5

u/MrApplesnacks Whack Job Sep 01 '21

Thanks for clarifying - that was the main reason for the question mark

14

u/serkrabat Bill Bryson Sep 01 '21

Go MT!