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US Steel Imports Drop in April as Trade Actions Bear Fruit
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Imports of steel, which have caused significant damage to the U.S. steel industry, dropped on a monthly comparison basis in April, according to the American Iron and Steel Institute ("AISI"). The decline appears to reflect the punitive actions (in the form of tariffs) taken by the U.S. trade regulators in the recent past to repel the tide of steel imports.
AISI – an association of North American steel makers – said that, based on preliminary U.S. Census Bureau data, total steel imports fell 5.6% from the previous month to 2,456,000 net tons in April. Finished steel imports also declined 4.1% sequentially to 2,014,000 net tons for the reported month.
Total steel imports for the first four months of 2016 dropped 34% from the same period a year ago. Finished steel imports for the same period also went down 33% year over year. Estimated market share of finished steel imports was 24% for April (same as in March) and 25% year to date.
Major finished steel products that showed a significant import increase on a monthly comparison basis in April are line pipe (up 38%), hot rolled bars (up 35%), structural pipe and tube (up 27%), standard pipe (up 17%) and cold rolled sheets (up 15%).
Biggest volumes of finished steel imports in April were from South Korea with 337,000 net tons (up 20% from March), Japan with 140,000 net tons (down 6%), Turkey with 123,000 net tons (down 56%), Germany with 88,000 net tons (up 22%) and China with 68,000 net tons (down 2%).
The AISI also noted that annualized total and finished steel imports in 2016 would be 29.9 million net tons and 25.3 million net tons, respectively, down 23% and 20% year over year, respectively.
While the latest import data paints an encouraging picture, the domestic steel industry still remains under the risk of cheaper imports. Unfairly-traded, subsidized imports are still flowing into the American market due to foreign producers’ overcapacity.
Low costs of production have enabled foreign producers (notably China) to sell their products at cheaper rates, leading to an industry-wide price decline, hurting margins of American steel makers. U.S. steel producers including Nucor (NUE - Free Report) , U.S. Steel (X - Free Report) , AK Steel , Steel Dynamics (STLD - Free Report) and ArcelorMittal USA – a part of ArcelorMittal (MT - Free Report) – have suffered heavily due to high levels of cheap steel imports, reflected by declined orders, idling of mills and layoffs across the nation.
China, which accounts for around half of global steel output, continues to pose a threat to the U.S. steel industry. The Chinese steel industry continues to reel under massive excess steel capacity and sluggish domestic demand amid a cooling economy. The country’s steel exports jumped 7.6% year over year in the first four months of 2016 (per customs data), indicating sustained demand weakness at home. China’s economy rose at an annual rate of 6.7% in the first quarter of 2016, its slowest in seven years.
Major U.S. steel makers have taken a series of steps (in the form of anti-dumping and countervailing duty petitions) in the recent past in their ongoing battle against low-priced imports from a host of foreign producers.
The U.S. Department of Commerce ("DOC") slapped final anti-dumping duties on imports of corrosion-resistant steel from China, India, Italy, South Korea and Taiwan yesterday including a massive anti-dumping duty rate of 209.97% on imports of these products from China.
The DOC, last week, also levied a whopping final anti-dumping duty rate of 265.79% on imports of cold-rolled steel from China. The commerce department also imposed a hefty final countervailing duty rate of 256.44% on Chinese imports.
Moreover, the regulator levied preliminary anti-dumping duties on imports of certain hot-rolled steel flat products by seven countries in Mar 2016. These actions are expected to help American steel makers defend their turf against illegally dumped steel products.
Steel market conditions in the U.S. have somewhat improved of late, driven by favorable rulings on steel trade cases in the recent past. Domestic steel makers continue to actively press the U.S. regulators to stop unfair trade practices and enforce new trade laws to rescue the crisis-hit U.S. steel industry.
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US Steel Imports Drop in April as Trade Actions Bear Fruit
Imports of steel, which have caused significant damage to the U.S. steel industry, dropped on a monthly comparison basis in April, according to the American Iron and Steel Institute ("AISI"). The decline appears to reflect the punitive actions (in the form of tariffs) taken by the U.S. trade regulators in the recent past to repel the tide of steel imports.
AISI – an association of North American steel makers – said that, based on preliminary U.S. Census Bureau data, total steel imports fell 5.6% from the previous month to 2,456,000 net tons in April. Finished steel imports also declined 4.1% sequentially to 2,014,000 net tons for the reported month.
Total steel imports for the first four months of 2016 dropped 34% from the same period a year ago. Finished steel imports for the same period also went down 33% year over year. Estimated market share of finished steel imports was 24% for April (same as in March) and 25% year to date.
Major finished steel products that showed a significant import increase on a monthly comparison basis in April are line pipe (up 38%), hot rolled bars (up 35%), structural pipe and tube (up 27%), standard pipe (up 17%) and cold rolled sheets (up 15%).
Biggest volumes of finished steel imports in April were from South Korea with 337,000 net tons (up 20% from March), Japan with 140,000 net tons (down 6%), Turkey with 123,000 net tons (down 56%), Germany with 88,000 net tons (up 22%) and China with 68,000 net tons (down 2%).
The AISI also noted that annualized total and finished steel imports in 2016 would be 29.9 million net tons and 25.3 million net tons, respectively, down 23% and 20% year over year, respectively.
While the latest import data paints an encouraging picture, the domestic steel industry still remains under the risk of cheaper imports. Unfairly-traded, subsidized imports are still flowing into the American market due to foreign producers’ overcapacity.
Low costs of production have enabled foreign producers (notably China) to sell their products at cheaper rates, leading to an industry-wide price decline, hurting margins of American steel makers. U.S. steel producers including Nucor (NUE - Free Report) , U.S. Steel (X - Free Report) , AK Steel , Steel Dynamics (STLD - Free Report) and ArcelorMittal USA – a part of ArcelorMittal (MT - Free Report) – have suffered heavily due to high levels of cheap steel imports, reflected by declined orders, idling of mills and layoffs across the nation.
China, which accounts for around half of global steel output, continues to pose a threat to the U.S. steel industry. The Chinese steel industry continues to reel under massive excess steel capacity and sluggish domestic demand amid a cooling economy. The country’s steel exports jumped 7.6% year over year in the first four months of 2016 (per customs data), indicating sustained demand weakness at home. China’s economy rose at an annual rate of 6.7% in the first quarter of 2016, its slowest in seven years.
Major U.S. steel makers have taken a series of steps (in the form of anti-dumping and countervailing duty petitions) in the recent past in their ongoing battle against low-priced imports from a host of foreign producers.
The U.S. Department of Commerce ("DOC") slapped final anti-dumping duties on imports of corrosion-resistant steel from China, India, Italy, South Korea and Taiwan yesterday including a massive anti-dumping duty rate of 209.97% on imports of these products from China.
The DOC, last week, also levied a whopping final anti-dumping duty rate of 265.79% on imports of cold-rolled steel from China. The commerce department also imposed a hefty final countervailing duty rate of 256.44% on Chinese imports.
Moreover, the regulator levied preliminary anti-dumping duties on imports of certain hot-rolled steel flat products by seven countries in Mar 2016. These actions are expected to help American steel makers defend their turf against illegally dumped steel products.
Steel market conditions in the U.S. have somewhat improved of late, driven by favorable rulings on steel trade cases in the recent past. Domestic steel makers continue to actively press the U.S. regulators to stop unfair trade practices and enforce new trade laws to rescue the crisis-hit U.S. steel industry.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>