Imports of steel, a pressing problem faced by the ailing American steel industry, dropped roughly 23% from the previous month in November, according to the American Iron and Steel Institute ("AISI"). The decline, a positive for the domestic steel industry, follows a roughly 5% rise in October.
AISI – an association of North American steel makers – said that, based on preliminary U.S. Census Bureau data, total U.S. steel imports for November was 2,351,000 net tons, a 22.7% decline from a month ago. That number includes finished steel imports of 1,921,000 net tons, which also fell 15.6% from October.
Market share of finished steel imports also fell on a monthly basis in November. Estimated market share of finished steel imports for the month was 25%, down from 26% in October. Year-to-date finished steel import market share was estimated at 29%, just ahead of 28% recorded for full-year 2014.
The U.S. steel industry saw a year over year decline in finished steel imports for the first eleven months of 2015. Finished steel imports for the period went down 5% year over year to 29,375,000 net tons. Total imports for the same period also fell 11% to 36,294,000 net tons.
Major finished steel products that showed a significant import increase on a monthly comparison basis in November are cut length plates (up 42%) and oil country goods (up 12%).
Biggest volumes of finished steel imports in November were from South Korea with 298,000 net tons (down 16% from October), Japan with 164,000 net tons (up 20%), Turkey with 147,000 net tons (down 50%), Brazil with 125,000 net tons (down 13%), and Germany with 86,000 net tons (down 8%).
Three biggest offshore suppliers for the eleven-month period were South Korea with 4,602,000 net tons (down 9% year over year), Turkey with 2,632,000 net tons (up 29%) and China with 2,238,000 net tons (down 25%).
While the November import data paints an encouraging picture, the U.S. steel industry still remains under the risk of cheaper imports in the face of a stronger greenback.
A recovering economy coupled with a mightier dollar has made the U.S. a dumping ground for unfairly-traded, subsidized steel. Domestic producers have suffered heavily due to high levels of cheap steel imports, reflected by declined orders, idling of mills and layoffs across the country.
Steel products are being illegally dumped by foreign producers (driven by overcapacity) in the U.S. market at unfairly low prices that significantly undercut the prices of domestic steel makers. Low costs of production have enabled overseas producers to sell their products at cheaper rates, leading to an industry-wide price decline, hurting margins of 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.
China, which has built up a massive excess steel capacity, continues to pose a threat to the U.S. steel industry. China’s move to devaluate its currency has triggered accelerated steel exports from the country amid waning domestic demand.
China’s steel exports swelled 22% year over year to 101.7 million tons in the first eleven months of 2015, per the General Administration of Customs. China – the world’s top steel producer – accounts for around half of global steel output.
Major U.S. steel producers have taken a series of steps (in the form of anti-dumping and countervailing duty petitions) in the recent past in their ongoing efforts to stem the flood of cheap imports.
The U.S. Department of Commerce ("DOC"), in Nov 2015, imposed countervailing duties on imports of corrosion-resistant steel from China, India, Italy and South Korea after concluding that these countries are benefiting from unfair government subsidies. Earlier this month, the DOC also levied countervailing duties on imports of cold-rolled steel from Brazil, China, India and Russia.
Moreover, the DOC recently concluded that China, India, Italy and South Korea have been illegally dumping corrosion-resistant steel into the U.S. market and therefore, are subject to anti-dumping duties. The commerce department has levied a massive duty rate of 255.80% on imports of these products from China.
These punitive actions are expected to help American steel makers defend their turf against these illegally dumped steel products and rescue the beleaguered domestic steel industry.
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