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U.S. Steel Imports Show No Signs of Abating: Up 22% YTD
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Imports of cheap steel continue to haunt the American steel industry. Steel imports have shot up roughly 22% year to date – according to the American Iron and Steel Institute (AISI), an association of North American steel makers.
Per AISI, based on preliminary U.S. Census Bureau data, total U.S. steel imports went up 22.1% year over year to roughly 23.17 million net tons through the first seven months of 2017. Finished steel imports for the same period also increased 17.3% to around 17.94 million net tons. Year to date, finished steel import market share is estimated at 28%, which is higher than 26% clocked in full-year 2016.
Major finished steel products that have showed a significant year-to-date increase in imports on a year-over-year basis include oil country goods (up 254%), standard pipe (up 47%), line pipe (up 39%), cold rolled sheets (up 37%), sheets and strip all other metallic coatings (up 35%), mechanical tubing (up 32%), hot rolled bars (up 26%) and sheets & strip hot dipped galvanized (up 25%).
The biggest offshore suppliers for the seven-month period were South Korea with 2,265,000 net tons (down 5% year over year), Turkey with 1,723,000 net tons (up 14%), Japan with 937,000 net tons (down 12%), Taiwan with 784,000 net tons (up 54%) and Germany with 750,000 net tons (up 7%).
Notwithstanding a series of punitive trade actions in the recent past in the form of heavy tariffs and threats of further future measures, imports continue to make inroads into the American market due to foreign producers’ overcapacity. High levels of imports remain a pressing problem for U.S. steel producers such as Nucor Corporation (NUE - Free Report) , United States Steel Corporation (X - Free Report) , AK Steel Holding Corporation and Steel Dynamics, Inc. (STLD - Free Report) . In particular, Nucor and AK Steel, during their second-quarter earnings call, raised concerns about a renewed flood of subsidized imports this year.
While affirmative rulings in trade cases (resulting in levy of heavy tariffs) against China last year led to an improvement in U.S. steel market conditions, imports from other countries remain at above historical levels.
The Zacks Steel Producers industry, nonetheless, has outperformed the broader market in a year’s time. The industry has gained around 32% in this period, higher than the S&P 500’s corresponding return of around 12%.
Steel stocks, which were in the dumps for the most part of 2016, got a shot in the arm following Donald Trump’s win in November on expectations of significant infrastructure spending under him. However, nothing concrete has materialized from the new administration yet on the infrastructure-spending front.
The Trump administration’s aggressive trade policies are also expected to provide more protection to the U.S. steel industry. Steel stocks also got a big lift in April 2017 after the Trump administration ordered an investigation under Section 232 of the Trade Expansion Act of 1962. The Section 232 probe is aimed at determining whether the imports pose a threat to national security and also gives the President the power to impose broad tariffs or quotas on imported steel.
However, steel imports have surged since the initiation of the investigation with import market share reaching as high as 30% in June 2017. Per a Reuters report, the executives of U.S. steel and steel-related firms including Nucor, U.S. Steel and ArcelorMittal (MT - Free Report) , in a letter, recently urged President Trump to impose immediate restrictions on imports. The appeal comes after a delay in the release of the report on the Section 232 investigation by the U.S. Department of Commerce, which was initially expected at the end of June 2017.
While the findings from the Section 232 steel investigation are due, it goes without saying that a positive outcome from the probe will provide a major thrust to American steel makers.
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U.S. Steel Imports Show No Signs of Abating: Up 22% YTD
Imports of cheap steel continue to haunt the American steel industry. Steel imports have shot up roughly 22% year to date – according to the American Iron and Steel Institute (AISI), an association of North American steel makers.
Per AISI, based on preliminary U.S. Census Bureau data, total U.S. steel imports went up 22.1% year over year to roughly 23.17 million net tons through the first seven months of 2017. Finished steel imports for the same period also increased 17.3% to around 17.94 million net tons. Year to date, finished steel import market share is estimated at 28%, which is higher than 26% clocked in full-year 2016.
Major finished steel products that have showed a significant year-to-date increase in imports on a year-over-year basis include oil country goods (up 254%), standard pipe (up 47%), line pipe (up 39%), cold rolled sheets (up 37%), sheets and strip all other metallic coatings (up 35%), mechanical tubing (up 32%), hot rolled bars (up 26%) and sheets & strip hot dipped galvanized (up 25%).
The biggest offshore suppliers for the seven-month period were South Korea with 2,265,000 net tons (down 5% year over year), Turkey with 1,723,000 net tons (up 14%), Japan with 937,000 net tons (down 12%), Taiwan with 784,000 net tons (up 54%) and Germany with 750,000 net tons (up 7%).
Notwithstanding a series of punitive trade actions in the recent past in the form of heavy tariffs and threats of further future measures, imports continue to make inroads into the American market due to foreign producers’ overcapacity. High levels of imports remain a pressing problem for U.S. steel producers such as Nucor Corporation (NUE - Free Report) , United States Steel Corporation (X - Free Report) , AK Steel Holding Corporation and Steel Dynamics, Inc. (STLD - Free Report) . In particular, Nucor and AK Steel, during their second-quarter earnings call, raised concerns about a renewed flood of subsidized imports this year.
While affirmative rulings in trade cases (resulting in levy of heavy tariffs) against China last year led to an improvement in U.S. steel market conditions, imports from other countries remain at above historical levels.
The Zacks Steel Producers industry, nonetheless, has outperformed the broader market in a year’s time. The industry has gained around 32% in this period, higher than the S&P 500’s corresponding return of around 12%.
Steel stocks, which were in the dumps for the most part of 2016, got a shot in the arm following Donald Trump’s win in November on expectations of significant infrastructure spending under him. However, nothing concrete has materialized from the new administration yet on the infrastructure-spending front.
The Trump administration’s aggressive trade policies are also expected to provide more protection to the U.S. steel industry. Steel stocks also got a big lift in April 2017 after the Trump administration ordered an investigation under Section 232 of the Trade Expansion Act of 1962. The Section 232 probe is aimed at determining whether the imports pose a threat to national security and also gives the President the power to impose broad tariffs or quotas on imported steel.
However, steel imports have surged since the initiation of the investigation with import market share reaching as high as 30% in June 2017. Per a Reuters report, the executives of U.S. steel and steel-related firms including Nucor, U.S. Steel and ArcelorMittal (MT - Free Report) , in a letter, recently urged President Trump to impose immediate restrictions on imports. The appeal comes after a delay in the release of the report on the Section 232 investigation by the U.S. Department of Commerce, which was initially expected at the end of June 2017.
While the findings from the Section 232 steel investigation are due, it goes without saying that a positive outcome from the probe will provide a major thrust to American steel makers.
4 Surprising Tech Stocks to Keep an Eye On
Tech stocks have been a major force behind the market’s record highs, but picking the best ones to buy can be tough. There’s a simple way to invest in the success of the entire sector. Zacks has just released a Special Report revealing one thing tech companies literally cannot function without.
More importantly, it reveals 4 top stocks set to skyrocket on increasing demand for these devices. I encourage you to get the report now – before the next wave of innovations really takes off.
See Stocks Now>>