Steel Products Prices North America

License Data Shows Decline in Steel Imports

Written by Peter Wright

Rolled steel imports into the United States declined by 12.7 percent in the three-month period from September-November, compared with the prior three months, June-August. Sheet products declined by 11.4 percent on the same basis, according to weekly licensed import tonnages reported by of the U.S. Department of Commerce on Dec. 5.

The data is reported within the Steel Import Monitoring and Analysis system (SIMA). An explanation of the methodology that Steel Market Update uses 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 August was the highest since May 2015. September, October and November progressively declined. The 3MMA in November was 2,376,476 tons, down from 2,498,066 in October, 2,666,799 in September and 2,722,567 in August.

Figure 1 shows the 3MMA through November of licensed tons of semi-finished, flat and long products since January 2004. Imports of semi-finished in November had a 3MMA of 705,152 tons, which was up by 21.5 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 1,122,413 tons in November, which was down by 2.5 percent year over year. Long product imports were rangebound between 519,000 tons and 772,000 tons for 34 months from November 2014 to August 2017 with no evident trend. In September 2017, long product imports broke out of the range to the downside and stayed down through November when the volume was 457,002 tons. Year over year, longs were down by 14.2 percent.  

Figure 2 shows the trend of sheet and strip product imports since January 2004. The total of these products was down by 11.4 percent in three months through November compared to three months through August and down by 0.8 percent year over year. Hot rolled declined by 11.8 percent year over year, cold rolled was up by 0.1 percent, hot-dip galvanized (HDG) was down by 0.9 percent and other metallic coated (mainly Galvalume) was up by 12.2 percent.  

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 2017 with both the three months through July (3M/3M) and the three months through November 2016 (Y/Y).

Table 2 shows the same analysis for long products. The total tonnage of long products was down by 75,596 tons per month Y/Y, entirely driven by a decline in rebar and wire rod volumes. On a 3M/3M basis, the total volume of long products declined by 30.2 percent.

Figure 3 shows the import market share of sheet and long products through September, which is the latest data available. The import market share of sheet products peaked at 24.3 percent in March 2015. The September 2017 level was 20.9 percent. Long product import market share has been considerably higher than for sheet products since early 2015, but in August and September dropped dramatically to 23.3 percent.

Figures 4-7 show U.S. mill shipments to domestic locations, imports and import market share of the four major sheet products. Note: the righthand 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. The import share of OMC declined dramatically from 54.0 percent in June to 40.6 percent in September.

Our analysis is based on the final net import volumes through September (net imports equals imports minus exports). 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 710,205 tons in September, which was the highest since July 2015. Exports increased in the first half of 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 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, 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 licensed data in this current update. The discrepancy declined continuously during 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 of the Department of Commerce collects and publishes data of steel mill product imports. By design, this information gives 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 automated 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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