A victorious Donald Trump and Republican allies are likely to focus on stimulating downstream demand for domestically produced steel whilst aiming new aggressive protectionist measures at neighbour Mexico, Kallanish hears from the immediate day-one post-election chatter.

Trump scored a clear Electoral College and popular-vote victory on Tuesday. His fellow Republicans regained control of the Senate and appeared to be in a favourable position to retain a majority in the House of Representatives as of the Wednesday night vote counts.

Because of Trump’s emphasis on employing more tariffs on imported goods, domestic steel interests immediately benefitted from the news of his election win. Shares of publicly traded steelmakers including Nucor, Steel Dynamics and Cleveland-Cliffs each gained at least 15% in Wednesday's trading.

An early steel-related target of the rejuvenated Trump administration is likely to be Mexico. According to Lucas Pipes, managing director at B. Riley Financial and its main metal analyst, the Republicans probably will zero in on Mexico’s cross-border behaviour under the terms of Trump’s own United States-Mexico-Canada Agreement, which replaced Nafta. US domestic steel interests have accused the Mexican steel exporters of accepting Chinese-origin steel upstream and circumventing US trade measures (see Kallanish 10 July).

“I think there will be a review of Mexico in the US supply chain,” Pipes predicts in an interview Wednesday. That may be complicated, however, because “Mexico is making more things consisting of US steel too.”

On the demand side, the new administration will make an effort to address a conundrum regarding its earlier policies and why consumption of domestic steel never measured up to promises.

“Reshoring heavy industry has been a [focus] since Trump’s first term,” Pipes comments. “We have seen some shortcomings for some time.”

One long-steel-consuming industry group, Associated Builders and Contractors (ABC), issued commentary on Wednesday pointing to the potential for downstream stimulus as a result of the Trump triumph.

“This is an exciting day for our industry,” said ABC president and chief executive Michael Bellaman. “ABC is optimistic about the future of America’s construction industry and the opportunities to advance policies that protect free enterprise, reduce regulatory burdens and expand workforce development. With leaders and lawmakers committed to promoting economic growth and supporting the principles of fair and open competition, we are confident that the construction industry will thrive and all workers will be given the opportunity to build America with fewer obstacles."

In a key US Senate race Tuesday, former Senate Steel Caucus chairman Sherrod Brown, an Ohio Democrat, was unseated by Republican businessman Bernie Moreno.