What CECO Environmental Corp. told the SEC could break it.

CECO's air-quality, emissions-control, dust-collection, scrubber and fluid-handling equipment is fabricated primarily from iron and steel. It secures iron and steel sheet and plate directly from steel mills where possible, and other materials from steel service centers, and notes that steel prices have traditionally been volatile (it tries to mitigate via pass-through/hedging). Because steel is the dominant input, swings in steel pricing — amplified by steel/aluminum tariffs — flow into cost of goods and project margins on its large fixed-price equipment contracts. A core steel-commodity input dependence.

“When possible, we directly secure iron and steel sheet and plate products from steel mills, whereas other materials are purchased from a variety of steel service centers.”

CECO procures components and manufactures products globally (51 facilities across 10 countries; ~34% of 2025 revenue international, including operations in China), so trade policy is a direct cost/operations risk. It flags that increased trade restrictions, tariffs or taxes on imports from countries where it procures or manufactures — particularly China and Mexico — could materially adversely affect results, and that the U.S. and China have already imposed significant incremental retaliatory tariffs. Tariff escalation raises input and component costs and can dampen international demand and operations. A specific, already-active trade-policy exposure.

“Changes in laws or policies governing the terms of foreign trade, in particular increased trade restrictions, tariffs or taxes on import from countries where we procure or manufacture products, such as China, could have a material adverse effect on our business and results of operations.”