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 (AKS – Free Report) 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%.
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