AIIS View of October 2015 Steel Imports

The United States imported 2.99 million net tons of steel in October, 5.4 percent more than in September, but nearly one-third less than was imported in October 2014, according to preliminary data from the U.S. Census Bureau. In August and September of this year, imports fell by 8.2 percent and 9.4 percent, respectively.

Brazil and South Korea significantly increased their steel shipments to the United States, compared to September, the former by 54.1 percent to 576,000 net tons and the latter by 26.8 percent to 354,000 net tons. Those totals, though, were 10.9 percent and 35.7 percent below the levels from October of last year. Other major trading partners generally decreased their sales to the United States. Imports from the European Union fell by more than a quarter to 367,000 net tons – almost 40 percent less than last October – while imports from Japan declined 18.4 percent to 170,000 net tons, 38.5 percent less than in October 2014. The 445,000 net tons of imports from Canada marked a decrease of 7.1 percent from September and 18.5 percent from the previous October, while the 246,000 net tons from Mexico marked a month-to-month increase of 2 percent and a month-over-month decrease of 30.8 percent.

Through the first 10 months of the year, imports were down 8.4 percent, compared to 2014, at 33.89 million net tons. Russia accounted for more than two-thirds of the dip in tonnage, with imports from that nation falling 54 percent to 1.85 million net tons. Imports from the European Union were down almost 10 percent to 5.17 million net tons, from Canada down 3.6 percent to 4.91 million net tons, from South Korea down 6.3 percent to 4.3 million net tons, and from Mexico down 23.5 percent to 2.43 million net tons. Year-to-date imports from Brazil increased 12.2 percent to 4.71 million net tons.

Semifinished imports of 729,000 net tons were 27.2 percent lower in October than they were a year earlier. Year-to-date, semifinished imports have fallen 36.2 percent, compared to 2014, at 5.84 million net tons.

In a column last year, The Economist noted, very simply, that, “When companies spend money on new plant and equipment … jobs and economic growth are the result.” This economic truism is a big reason why free trade in steel is so critical to the United States. The competitiveness of the global market enables companies to be more efficient with their capital expenditures, enhancing the impact of each dollar spent. It is also a big reason why steel imports tend to follow the same trend lines as GDP growth over the long-term. October’s increase in imports is mildly encouraging, especially given the numbers from the two preceding months, but steel spending still has a long way to go before it catches up with the totals from a year ago, a time when, not coincidentally, both steel imports and economic growth were peaking.