The Peter Zeihan Podcast Series The Fire Hose of Chaos: Steel and Aluminum
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May 7, 2025 Delve into how tariffs have disrupted the steel and aluminum markets, turning them into chaotic landscapes. Discover the stark contrasts between recycled and virgin steel and how policies shape these industries. The conversation highlights the struggles of boosting production amid rising costs, along with the broader implications for the American economy. Buckle up for a fiery discussion on the wildfires and smoldering supply chains!
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Recycled vs Virgin Steel Uses
- About 75% of US steel is recycled but recycled steel is "ugly" and used mainly for strength.
- Cold rolled virgin steel, made from iron ore, is required for advanced manufacturing and electrical regulation.
Steel Supply vs Tariff Impact
- The U.S. needs to roughly double its steel industrial plant capacity to meet demand.
- Tariffs on imported steel raise costs and slow supply while domestic capacity buildout can take a decade.
Aluminum Production and Tariffs
- US produces about 45% of the aluminum it uses, mostly recycled, but virgin aluminum needs to come from bauxite.
- Tariffs increased prices before domestic smelting capacity expanded, slowing supply and driving costs up.