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SIMA: Rolled Steel Imports Continue Decline in June

Written by Peter Wright

Flat rolled steel imports into the United States continue to decline. The three-month moving average (3MMA) for rolled product imports into the U.S. year over year was down by 11.3 percent as of June, according to Steel Market Update’s latest analysis of Commerce Department license data.

This is an early look at June’s import volume based on the license data (see explanation below). The analysis evaluates the pressure that imports are having on individual products at the national level, but gives no indication of regional differences. SMU also has developed a new series of regional reports for the six main flat rolled sectors. They show that the differences between the changes in import levels at the regional level are in some cases huge compared to the changes at the national level.

Total rolled steel product imports in June were down by 19.7 percent from May’s volume and on 3MMA basis declined by 6.9 percent.

Beginning in January, we have expanded this import analysis to include all major steel sectors: sheet, plate, longs and tubulars, with a total of 18 subsectors, and we now publish an import market share analysis for the same 18 steel product groups. Together, these two reports should give an accurate view of the effect of the Section 232 trade legislation. All volumes in this analysis are reported in short tons. We use three-month moving averages rather than single-month results to smooth out the variability.

Figure 1 shows the tonnage of total rolled steel and semi-finished imports through June on a 3MMA basis. The 3MMA of total rolled product import volume in February 2018 had a recent low of 1,977,871 tons. This was the first time it dipped below two million tons since May 2016. The 3MMA of rolled product imports increased in March through May to reach 2,485,072 tons before declining in June to 2,312,846 tons. On a 3MMA basis, the import volume of semis in June was the highest since August last year.

There are three tables in this report. In each of them, we show the 3MMA of the tonnage in June 2018 and 2017 with the year-over-year change. We then calculate the percentage change in volume in the most recent three months with the previous three months. This month we are comparing April/May/June with January/February/March (3M/3M). The next column to the right shows the year-over-year change as a percentage. Declines are color coded green and increases are coded red. Finally, in the far-right column, we subtract the 12-month change from the three-month change. This is a way of describing the magnitude of the recent trend as a percentage. In many cases, the color code of the trend can be the opposite of the two timeframe analyses.

Table 1 describes the imports of all major sectors of the sheet and plate markets. In the flat rolled sectors shown in Table 1, all sheet and plate products except electrogalvanized had increasing imports 3M/3M. Year over year, the situation was almost the opposite, with all products except hot rolled sheet and coiled plate having a decrease. Figures 2 and 3 show the history of sheet and plate product imports since January 2004. 

Table 2 shows the same analysis for long products where 3M/3M imports were up by 15.2 percent, led by rebar up by 69.9 percent. All products except light shapes increased. Figure 4 shows the history of long product imports.

Table 3 shows that for tubular products, the 3M/3M volume was down by 0.7 percent and the year-over-year volume was down by 6.7 percent. The biggest change was in line pipe, up by 23.2 percent 3M/3M and up 15.7 percent year over year. Figure 5 shows the history of tubular imports since 2004.

Explanation: SMU publishes several import reports ranging from this very early look using license data to the very detailed analysis of final volumes by product, by district of entry and by source nation, which is available in the premium member section of our website. The early look is based on three-month moving averages 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. 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, we conducted a 12-month analysis to evaluate the accuracy of the license data compared to final receipts. This analysis showed that the licensed tonnage of all carbon and low alloy products was 2.3 percent less than actual receipts, close enough to confidently include license data in this current update. The discrepancy declined continuously during the 12-month evaluation as a longer 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 online system for importers to register, apply for and receive licenses in a timely manner. 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. 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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