Imports of steel, which have caused severe damage to the U.S. steel industry, tapered off sharply on a year over year comparison basis in January, according to the American Iron and Steel Institute ("AISI").
AISI – an association of North American steel makers – said that, based on preliminary U.S. Census Bureau data, total steel imports dropped 41% year over year to 2,577,000 net tons in January. Finished steel imports also tumbled 38% year over year to 2,217,000 net tons for the reported month. The sharp decline appears to reflect the punitive actions (in the form of tariffs) taken by the U.S. trade regulators in late 2015 to stem the tide of steel imports.
However, total steel imports rose 10% from the previous month in January. Finished steel imports also went up 8.8% in the reported month from December. Estimated market share of finished steel imports for January was 26%, same as in December.
Major finished steel products that showed a significant import increase on a monthly comparison basis in January are oil country goods (up 107%), standard pipe (up 68%), hot rolled sheets (up 53%), line pipe (up 47%), structural pipe and tubing (up 43%), plates in coils (up 25%) and wire drawn (up 12%).
Biggest volumes of finished steel imports in January were from Turkey with 244,000 net tons (up 34% from December), South Korea with 241,000 net tons (up 2%), Japan with 188,000 net tons (up 31%), Brazil with 154,000 net tons (up 124%), and Germany with 121,000 net tons (down 1%).
Despite some favorable developments on the import front in the recent past, the domestic steel industry still remains under the risk of cheaper imports in the face of a stronger dollar. Unfairly-traded, subsidized imports are still flowing into the American market due to foreign producers’ overcapacity. Finished steel imports captured a record 29% share of the domestic market in 2015.
Low costs of production have enabled foreign producers to sell their products at cheaper rates, leading to an industry-wide price decline, hurting margins of American steel makers. U.S. steel producers 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 worsening gap between supply and demand with barely any signs of recovery.
Notably, 2015 saw accelerated steel exports from China as demand weakened at home amid a cooling economy. China’s total steel exports jumped 20% year over year to 112.4 million tons in 2015 (per customs data), topping 100 million tons for the first time.
Major U.S. steel makers including Nucor NUE, U.S. Steel X, AK Steel AKS, Steel Dynamics STLD and ArcelorMittal USA – a part of ArcelorMittal MT – have taken a series of steps (in the form of anti-dumping and countervailing duty petitions) in the recent past in their ongoing war against low-priced imports from a host of overseas producers including China.
The U.S. Department of Commerce ("DOC"), in Dec 2015, slapped anti-dumping duties on imports of corrosion-resistant steel from China, India, Italy and South Korea including a whopping anti-dumping duty rate of 255.80% on imports of these products from China. The commerce department also levied countervailing duties on imports of cold-rolled steel from Brazil, China, India and Russia including a massive duty rate of 227.29% on China.
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 American steel industry.
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