Imports of steel, which have wreaked havoc on the ailing American steel industry, dropped nearly 4% from the previous month in May – according to the American Iron and Steel Institute ("AISI"), an association of North American steel makers. Total steel imports declined for the fourth straight month in May, an encouraging sign for the beleaguered domestic steel makers.
AISI said that, based on preliminary U.S. Census Bureau data, U.S. steel imports for May was 3,374,000 net tons, a 3.6% decline from a month ago. That number includes finished steel imports of 2,744,000 net tons, which is also down 7.2% from April.
Market share of finished steel imports also fell on a monthly basis in May. Estimated market share of finished steel import for the month was 29%, a decline from 33% in April. But year-to-date finished steel import market share was estimated at 32%, which is still higher than 28% clocked for full-year 2014.
The U.S. steel industry, which directly or indirectly supports over a million jobs, saw imports rise year over year during the first five months of 2015. Total and finished steel imports year-to-date moved up 6% and 20% year over year, respectively, to 18.6 million and 15.4 million net tons, respectively.
Major finished steel products that showed a significant import increase on a monthly comparison basis in May are tin plate (up 101%), sheets and strip galvanized hot dipped (up 17%), hot rolled bars (up 15%), cut lengths plates (up 13%), hot rolled sheets (up 12%) and standard pipe (up 11%).
Biggest volumes of finished steel imports in the reported month were from South Korea with 355,000 net tons (down 30% from April), China with 302,000 net tons (up 3%), Turkey with 222,000 net tons (down 3%), Japan with 184,000 net tons (down 19%) and Germany with 131,000 net tons (up 8%).
Three biggest offshore suppliers for the five-month period were South Korea with 2,745,000 net tons (up 28% year over year), Turkey with 1,446,000 net tons (up 90%) and China with 1,330,000 net tons (up 3%).
Domestic steel producers have been struggling to defend themselves against a deluge of low-priced steel imports from foreign manufacturers, especially from China and South Korea. A recovering economy coupled with a stronger dollar has made the U.S. an attractive market for finished steel imports.
Subsidized steel products are being illegally dumped by foreign steel producers in the American market at unfairly low prices that significantly undercut the prices of U.S. steelmakers. Low costs of production has enabled the overseas producers (especially China) to sell their products at cheaper rates, leading to an industry-wide price decline, hurting margins and earnings power of U.S. steelmakers in the process.
Steel imports jumped 38% year over year in 2014. Domestic producers have suffered heavily due to a surge of cheap steel imports, reflected by declined orders, idling of mills and layoffs across the country.
American steel makers got a much-needed reprieve in Aug 2014 after the U.S. International Trade Commission (“USITC”) imposed anti-dumping orders against six countries (including South Korea) accused for illegally dumping cheap Oil Country Tubular Goods ("OCTG") products that play a pivotal role in building and maintaining America’s energy infrastructure. 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.
In a big move, the nation’s six biggest steel producers including Nucor NUE, U.S. Steel X, AK Steel AKS, Steel Dynamics STLD and ArcelorMittal USA – a part of ArcelorMittal MT – recently filed anti-dumping and countervailing duty petitions with the DOC and the USITC against five countries accused for illegally dumping cheap corrosion-resistant steel.
The petitions charge that a flood of significantly subsidized imports of corrosion-resistant steel from China, India, Italy, South Korea and Taiwan are causing material injury to the U.S. steel industry. These producers exported over $2.2 billion of corrosion-resistant steel to the U.S. market last year.
The American steel industry commended President Obama for signing two major trade bills – Trade Promotion Authority (TPA) and Trade Adjustment Assistance (TAA) – yesterday that should help domestic producers protect their turf against illegally dumped cheap steel products.
U.S. Steel’s CEO Mario Longhi applauded President Obama’s move to strengthen trade enforcement laws and said that the legislation not only opens new markets for American goods and services, but also clarifies the injury standard in dumping and counterveiling duties cases to better protect domestic workers and companies from unfairly traded products.
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.
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