Imports of steel – a major concern for the ailing American steel industry – fell nearly 4% from the previous month in April – according to the American Iron and Steel Institute ("AISI"), an association of North American steel makers. But market share of finished steel imports remained at an alarmingly high level.
AISI said that, based on preliminary U.S. Census Bureau data, U.S. steel imports for April was 3,483,000 net tons, a 3.7% fall from a month ago. That number includes finished steel imports of 2,938,000 net tons, which is also down 7.8% from March.
But the U.S. steel industry, which directly or indirectly supports over a million jobs, still remains rattled by a torrent of cheap steel imports. Total and finished steel imports for the first four months of 2015 climbed 13% and 27% year over year, respectively, to 15.2 million and 12.6 million net tons, respectively. Estimated market share of finished steel import for April remained high at 33%, albeit a decline from 34% in March. That level is still higher than 28% clocked for full-year 2014.
Major finished steel products that showed a significant import increase on a monthly comparison basis in April are standard pipe (up 30%), heavy structural shapes (up 26%), cold rolled sheets (up 21%) and sheets and strip all other metallic coatings (up 14%).
Biggest volumes of finished steel imports in the reported month were from South Korea with 511,000 net tons (down 9% from March), Turkey with 214,000 net tons (down 48%), China with 293,000 net tons (up 8%), Japan with 226,000 net tons (up 25%) and Taiwan with 123,000 net tons (down 27%).
Three biggest offshore suppliers for the four-month period were South Korea with 2,389,000 net tons (up 52% year over year), Turkey with 1,210,000 net tons (up 98%) and China with 1,028,000 net tons (up 5%).
U.S. producers including U.S. Steel X, Nucor NUE, AK Steel AKS, Steel Dynamics STLD and Commercial Metals Company CMC are struggling to defend their turf from a flood of low-priced steel imports from foreign manufacturers, especially from South Korea and China.
In particular, low costs of production in China has enabled the local producers to sell their product at cheaper rates, leading to an industry-wide price decline, hurting margins and earnings power of U.S. steel makers in the process.
U.S. steel imports shot up 36% year over year in 2014. Despite the U.S. steel industry’s depressed capacity utilization, imports continue to make inroads in the domestic market due to foreign producers’ overcapacity. A recovering economy coupled with a stronger dollar has made the U.S. an attractive market for finished steel imports. Domestic steelmakers have suffered heavily due to a surge of subsidized steel imports, reflected by declined orders, idling of mills and jobs losses.
American steelmakers got a much-needed respite in Aug 2014 after the U.S. International Trade Commission (“USITC”) confirmed the imposition of anti-dumping orders against six countries accused for illegally dumping cheap steel products into the U.S. market.
In a big move, the USITC voted to levy anti-dumping duties on imports of Oil Country Tubular Goods (OCTG) products on six of the alleged nine nations including South Korea, which accounted for over 90% of the unfairly priced imports that flowed into the U.S. market. The ruling allowed the U.S. Department of Commerce (DOC) to go ahead with the issue of countervailing and anti-dumping duty orders on OCTG imports.
OCTG products play a pivotal role in building and maintaining the nation’s energy infrastructure. Intense dumping of subsidized OCTG products by these overseas suppliers caused significant harm to the American market and workers.
U.S. steel producers continue to actively press Congress to stop unfair trade practices and enforce new trade laws to rescue the domestic steel industry.
The nation’s biggest steel companies and United Steelworkers union told the members of the Congressional Steel Caucus in March that the alarming inflow of imported steel products into the American market has caused plant shutdowns and layoffs across the country with thousands of jobs are currently at risk. CEOs of leading U.S. steel firms have asked the Congress to take tougher actions to stop illegal foreign trade practices.
While the steel market environment is expected to remain difficult in the U.S. in 2015, strength in the automotive market and a rebound in construction activity augur well for steel demand in the country, providing a much-needed thrust to the domestic steel industry.
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