Steel Products Prices North America

Flat Rolled Steel Imports Down

Written by Peter Wright

Total rolled steel imports declined by 5.8 percent in the three months through September, compared with the three months through June. Sheet product imports were down by 3.9 percent on the same basis.

The final license data for September was reported by of the U.S. Commerce Department on Oct. 3. The data is reported within the Steel Import Monitoring and Analysis system (SIMA). An explanation of the methodology used to analyze the trade data is given at the end of this piece, together with notes describing SIMA. All volumes in this analysis are reported in short tons. We prefer not to dwell on single-month results because of the extreme variability that can occur in individual products. In the comments below, we use three-month moving averages to give what we believe is the most accurate picture.

The three-month moving average (3MMA) of rolled product import volume in July was the highest since May 2015. August and September both declined. The September volume was 2,456,804 tons, down from 2,658,499 in August and 2,722,567 in July.

Figure 1 shows the 3MMA through September licensed tons of semi-finished, flat and long products since January 2004. Imports of semi-finished in September had a 3MMA of 686,814 tons, which was down by 1.8 percent year over year. “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 was 1,162,775 tons in September, which was down by 4.3 percent year over year. Long product imports were range bound between 519,000 tons and 772,000 tons between September 2014 and August 2017 with no particular trend evident. In September 2017, long product imports broke out of the range to the downside with a volume of 508,459 tons.

Figure 2 shows the trend of sheet and strip product imports since January 2004. The total of these products was down by 3.9 percent in three months through September compared to three months through June and down by 0.2 percent year over year. The four major product groups all declined in the latest data, while electrogalvanized and tin plate increased slightly.

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 September 2017 with both three months through June (3M/3M) and the three months through September 2016 (Y/Y). All sheet products except hot rolled were down in the three-month comparison. On a year-over-year comparison, hot rolled was down by 23.2 percent and HDG was up by 13.6 percent. The other sheet products fell between those two extremes. Plate was down by 21.9 percent year over year, but tubulars were up by 124.9 percent.

Table 2 shows the same analysis for long products. The total tonnage of long products was down by 120,942 tons per month year over year, entirely driven by a decline in rebar volume. On a 3M/3M basis, the total volume of long products declined by 21.3 percent.

Figure 3 shows the import market share of sheet and long products through July, which is the latest data available. The import market share of sheet products peaked at 24.3 percent in March 2015. The July 2017 level was 21.8 percent. Long product import market share has been considerably higher than for sheet products since early 2015 and in July was 28.5 percent, the highest since May 2015.

Figures 4 through 7 show U.S. mill shipments to domestic locations, imports and import market share for the four major sheet products. Note: the right-hand import share axes are the same to give true comparability. HRC has the lowest import share followed by HDG, CRC and OMC, which is by far the highest.

Net imports equals imports minus exports; our analysis is based on the final volumes through July. We regard this as an important look at the overall trade picture and its effect on demand at the mill level. Figure 8 shows net sheet product imports on a 3MMA basis to be 682,816 tons in July, which was the highest since September 2015. Exports have increased in 2017 driven by the depreciation of the U.S. dollar on the international foreign exchange markets. Net sheet steel imports are high by historical standards.

Explanation: 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 website. The early look, the latest of which you are reading now, has been based on three-month moving averages (3MMA) using the latest license 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 actual receipts, close enough we believe to confidently include license data in this current update. The discrepancy declined continuously during the course of the 12-month evaluation as a longer time period was considered.

Statement from the Department of Commerce: The Steel Import Monitoring and Analysis (SIMA) System, under the Department of Commerce, collects and publishes data of steel mill product imports. By design, this information provides stakeholders valuable information on steel trade with the United States. This is achieved through two tools: the steel licensing program and the steel import monitor. All steel mill imports into the United States require a license issued by the SIMA office. The SIMA Licensing System is an on-line automatic system for users to register, apply for, and receive licenses in a quick and timely manner. This on-line system allows importers to process imports with minimal effort and added efficiency. In addition to managing the licensing system, SIMA publishes near-real-time aggregate data on steel mill imports into the United States. These data incorporate information collected from steel license applications and publicly released Census data. The data are displayed in tables and graphs for users to analyze various levels and changes in steel trade involving the United States. Additionally, SIMA provides data on U.S. steel mill exports, as well as imports and exports of select downstream steel products.

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