Steel Traders Say Flat Rolled Imports to Drop 25% to 50%

Steel trading companies are advising Steel Market Update that we should expect imports of foreign steel to be much lower as we move into the New Year. There are three major reasons for the slowdown in foreign orders: 1) the antidumping (AD) and countervailing (CVD) results fell in favor of the domestic steel mills, thus either eliminating or slowing imports from a number of countries hit by affirmative dumping duties. 2) The second reason according to steel traders is many steel buyers expected domestic steel prices to drop through the end of the year thus slowing their interest in foreign steel with its longer lead times. 3) The third reason is we are seeing a run up in prices in China, Europe and elsewhere. Higher foreign prices shrinks the spread between foreign and domestic and, at this point, some items are actually more expensive to buy foreign than domestic.

Here is how one trader described the situation to SMU on Friday, “Most of the buyers were very nervous until the last price increase announcement. They expected prices to keep on going down thru the end of the year. In the meantime the steel market in Asia, CIS and Europe went on fire.  Prices are still going up.  HRC prices in the EU are reaching Euro 480 to 500, in Turkey $500/mt, CIS $450/mt FOB  etc., same for CRC and HDG.  We should see a dramatic drop of flat rolled imports in Q1 2017. Few orders were booked for January shipments and now foreign mills are quoting March shipment for CRC and HDG.”