Steel Products Prices North America

Flat, Long, and Semi-Finished Imports through November 2016

Written by Peter Wright

Licensed data for November was reported by the Steel Import Monitoring System of the US Commerce Department on December 6th. An explanation of the methodology that we at SMU use to analyze the trade data is given at the end of this piece.

All volumes in this analysis are reported in short tons. Total rolled product licensed imports in the single month of November were 2,157,223 tons with a three month moving average (3MMA) of 2,120,210 tons. We prefer not to dwell on single months results because of the extreme variability that can occur in individual products. In the comments below we use only three month moving averages because normally this presents a more representative picture.

Figure 1 shows the 3MMA through November licensed tons of semi-finished, flat and long products since January 2004.

 Imports of semi-finished in November were 52,860 tons with a three month moving average of 535,470 tons. February’s import volume of semis was an outlier, since then the volume has recovered to a level typical of 2015. “Flat” includes all hot and cold rolled sheet and strip plus all coated sheet products plus both discrete and coiled plate. The 3MMA of flat rolled imports peaked at 1,634,000 tons in November 2014, fell to 1,009,000 tons in April this year, climbed back to 1,218,000 tons in August and in November had fallen back to 1,149,000 tons. Long product imports have been range bound between 519,000 tons and 772,000 tons since March 2014 with no particular trend evident. In November the 3MMA of long product imports was 544,210 tons.

Figure 2 shows the 3MMA trend of sheet and strip products since January 2004.

The total of these products was down by 2.7 percent in three months through November compared to three months through August. HRC was down sharply in October and November and CRC and HDG were both higher than HRC in November on a 3MMA basis which was very unusual. Other metallic coated, mainly Galvalume and tin plate have been trending up this year and tin plate imports are now higher than at any time since January 2004. Electro-galvanized is up significantly from this time last year but the volumes are small.

Table 1 provides an analysis of major product groups and of sheet products in detail.

It compares the average monthly tonnage in the three months through November 2016 with both three months through August (3M/3M) and three months through November 2015 (Y/Y). On a Y/Y basis the 3MMA of the total of all rolled products was up by 49,245 tons or 2.4 percent, as total sheet products were up by 8.5 percent. Tubulars were up by 6.2 percent. Semi-finished slabs, blooms and billets were down by 13.0 percent and long products were down by 3.0 percent. There were big differences between the individual sheet products. HRC was down by 25.8 percent and CRC and HDG were up by 31.9 percent and 29.4 percent respectively. On a 3M/3M basis the total volume of hot worked products was down by 7.0 percent also with a big difference between products. HRC was down by 21.2 percent as CRC and HDG were up by 8.7 percent and 13.5 percent respectively. Table 2 shows the same analysis for long products.

The total tonnage of long products was down by 17,085 tons per month Y/Y. Rebar was down by 9.4 percent and light shapes were up by 25.4 percent as heavy structurals were up by 14.1 percent. On a 3M/3M basis the total volume of long products decreased by 18.5 percent.

Figure 3 shows the import market share of sheet and long products through October which is the latest data available for total steel supply.

The import market share of sheet products peaked at 24.3 percent in March 2015 and was less than 20 percent for each month of 2016 until August when it rose to 20.3 percent on a 3MMA basis. Import share in both September and October was 21 percent. Long product import market share peaked at 29.4 in April 2015 but has only had two months since then below 25 percent. Import share of longs in October was 26.4 percent.

Net imports equals imports minus exports and our analysis is based on the final volumes through October. We regard this as an important look at the overall trade picture and its effect on demand at the mill level. Figure 4 shows net sheet product imports on a 3MMA basis at 622,673 tons in October which was down from 663,825 in September as imports declined slightly and exports increased by a similar amount.

The total net sheet imports was down by 1,331,000 tons YTD through October. Compared to imports, exports have been relatively consistent for almost eight years. Net sheet steel imports are still high by historical standards. If as expected the Fed raises interest rates this month (December), the US $ will appreciate against the currencies of the steel trading nations and this in turn will tend to drive imports higher and exports lower in 2017.

Explanation: The SMU publishes several import reports ranging from this very early look using licensed data to the very detailed analysis of final volumes by product, by district of entry and by source nation which is available on the premium member section of our web site. The early look, the latest of which you are reading now has been based on three month moving averages (3MMA) using the latest licensed data, either the preliminary or final data for the previous month and final data for earlier months. We recognize that the license data is subject to revisions but believe that by combining it with earlier months in this way gives a reasonably accurate assessment of volume trends by product as early as possible. We are more interested in direction than we are in absolute volumes at this stage. The main issue with the license data is that the month in which the tonnage arrives is not always the same month in which the license was recorded. In 2014 as a whole our data showed that the reported licensed tonnage of all carbon and low alloy products was 2.3 percent less than actually receipts, close enough we believe to confidently include licensed data in this current update. The discrepancy declined continuously during the course of the twelve month evaluation as a longer time period was considered.

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