Posted on 31 Oct 2025
Key takeaways:
The temporary shutdown of the US federal government, which began on October 1, could have a lasting effect on the domestic steel industry. Fastmarkets has heard that trade experts are pushing for a speedy resolution of the political stalemate. The government began its shutdown after Republicans and Democrats in the US Congress failed to reach a budget deal before the previous funding agreement expired.
Due to the government shutdown, many US government services were still temporarily suspended as of Wednesday October 29. A reported estimate of 1.4 million federal employees were on unpaid leave or working without pay.
The most immediate and significant consequence of the government shutdown is the inability to get critical steel data through the Department of Commerce’s program. This program is used for tracking steel import licenses, Kevin Dempsey, president and chief executive officer of the American Iron & Steel Institute (AISI), told Fastmarkets on October 28.
“Although Commerce may still be collecting the data, it is not being published. Nor does the steel industry have access to it. Therefore, we do not have the much-needed early-warning system regarding foreign imports,” Dempsey said.
Access to steel data is critical because it could help to curb increased volumes of imports into the US. The biggest hurdle in the domestic industry is led by unfair trade practices. Additionally, the overproduction of steel causes concern, according to the AISI.
“Without the ability to monitor those trade flows in real time, steel imports can surge into our markets undetected,” Dempsey said. “For the sake of American steel jobs, we urge that the current government funding stalemate must end.”
Key data sources used by the steel industry “have gone dark” during the government shutdown. This has removed pertinent insight for market participants, Samir Kapadia, Vogel Group managing principal, told Fastmarkets on October 24.
“The Census Bureau, for instance, has stopped releasing its monthly construction spending report. This report is the primary dataset the steel industry uses to forecast demand. Companies are being forced to make critical decisions without market intelligence,” Kapadia said.
“With trade enforcement agencies furloughed, the US market is vulnerable to a surge of unfairly dumped foreign steel. This situation undercuts domestic producers when they are most vulnerable, if not monitored at scale,” Kapadia added.
The International Trade Administration (ITA), which publishes steel import data by country and product, has not been updated since September 29.
“That type of information [from the ITA] is extremely important, not only for making commercial decisions, but also for trade cases,” Phil Bell, president of the Steel Manufacturers Association (SMA) told Fastmarkets in an interview on October 24. “It is also important for determining further trade policy.”
The construction sector could be one of the industries most negatively affected by the government shutdown, Kapadia said. This is because the sector is the steel industry’s largest customer. Moreover, it is heavily dependent on federal funding.
Due to the government shutdown, new contracts from agencies including the Department of Transportation and the Army Corps of Engineers have been terminated. This paused a significant source of demand for structural steel and rebar on projects. These projects require roads, bridges, and public buildings, Kapadia said.
According to Kapadia, the administration under US President Donald Trump is using the shutdown to “clean house” and cancel projects introduced during the previous Joe Biden administration. This applies particularly to those related to green steel and other clean energy initiatives.
The Department of Energy (DOE) announced the termination of 321 financial awards supporting 223 projects on October 2. This was after determining that these projects did not adequately advance the nation’s energy needs. They were also not economically viable and would not provide a positive return on investment of taxpayer funds.
The awards were issued by the Offices of Clean Energy Demonstrations, Energy Efficiency and Renewable Energy, Grid Deployment, Manufacturing and Energy Supply Chains, Advanced Research Projects Agency-Energy, and Fossil Energy.
Despite the slew of canceled projects intended to boost clean energy in the US, the domestic steel industry will still spearhead clean steelmaking, according to the SMA.
“Although decarbonization is not the priority that it was in the Biden administration, what this administration is focused on is industrial competitiveness,” Bell said on Friday. “We’re already a clean steel industry.”
Steel production in the US is made up of 70% electric-arc furnace (EAF) steelmaking and 30% blast furnace (BF) steelmaking. EAFs emit lower levels of carbon due to their use of electrical power. In contrast, BFs rely on coal.
“We have found a way to make steel that is less energy dependent, that has fewer emissions and that is more competitive,” Bell said. “We’re going to continue to do that no matter where the Trump administration lands on decarbonization. We’ll continue to make the cleanest steel in the world and in the most competitive and efficient way possible.”
Despite the government shutdown, the steel industry is “full steam ahead,” Bell said.
“While some departments have shut down or eliminated non-essential personnel, the departments that we deal with – such as the Commerce Department and the Office of the US Trade Representative – those departments keep going,” Bell told Fastmarkets.
“Steelmakers tend to be able to cope with ambiguity, paradox and uncertainty very well,” he added. “Even despite some of the economic volatility and in some of the policy decisions that we’ve seen, our members remain full steam ahead on their investments, on their projects, on their hiring.”
But what remains to be seen, he added, is the potential effect of the shutdown on the broader US economy. It also remains to be seen how this will affect steel demand subsequently.
Source:Fastmarkets
