Import Licenses Trend Up in February for HR, CR and Plate: Commerce

Hot-rolled coil imports also appear poised to increase significantly in February. The U.S. was licensed to import 98,270 tonnes, or 6,142 tonnes per day through Feb. 16. That pace, if maintained, is up 37.6% from 4,463 tonnes per day in January, or 138,359 tonnes total last month, per Commerce Department figures and Steel Market Update calculations.

The gains come primarily because of increased shipments from South Korea and, to a lesser extent, Turkey. They also come despite a precipitous drop in arrivals from Canada, typically the largest source of foreign hot band in the U.S. market.

South Korea was licensed to ship 52,775 tonnes of hot-rolled coil to the U.S. through Feb. 16, up 44% from a total of 36,644 tonnes in the entire month of January and marking the highest level of imports from the East Asian nation since at least January 2020, according to Commerce data.

Turkey, meanwhile, is already licensed to ship 7,734 tonnes of hot-rolled coil to the U.S. this month after sending nothing to domestic ports last year or in January of this year.

Foreign mills are offering hot-rolled coil into the U.S. at approximately $960-1,080 per ton ($48-54/cwt), according to market participants.

The lower end of that range is for Turkish and Egyptian material into Houston. The higher end is for South Korean material or material delivered to the West Coast, sources said.

The midpoint of that range, $1,020 per ton, represents a $180-per-ton discount to Steel Market Update’s average U.S. hot-rolled coil price of $1,200 per ton. And some domestic mills are now offering hot-rolled at $1,240 per ton–or nearly $300 above certain import offers.

The price advantage for imports could provide an attractive incentive, especially given that there might be little difference between domestic mill lead times and import arrival times in June/July.

California Steel Industries (CSI), for example, on Tuesday opened its May orderbook. Several sources said they expect May to fill up fast. Should CSI close May, that would place lead times out to June–or on par with foreign arrivals.

A similar trend is playing out in the cut-to-length plate market. The U.S. was licensed to import 18,466 tonnes through Feb. 16, or 1,154 tonnes per day. That’s up 61.3% from 715 tonnes per day in January, a month that saw total plate imports of 22,160 tonnes.

As in the hot-rolled coil arena, Canadian plate volumes are trending sharply lower. But South Korea as of Feb. 16 was licensed to ship 7,778 tonnes of cut-to-length plate to domestic ports, up more than sevenfold from 1,080 tonnes for the entire month of January and up 19.8% from 6,494 tonnes in February 2020. 

Cold Rolled and Tin Plate

The dynamic is even more apparent in the cold-rolled market. The U.S. imported a total of 59,534 tonnes of cold-rolled coil in January and was already licensed to import 50,845 tonnes through Feb. 16, the last date for which such figures are available.

In other words, the U.S. imported 1,920 tonnes of cold-rolled coil per day in January and was through mid-February importing approximately 2,542 tonnes per day–a 32.4% increase.

Much of that material–a combined 21,829 tonnes or nearly 30% of the February import licenses for cold-rolled–came from Canada and Mexico, whose supply chains are closely interwoven with those in the United States.

But some arrivals, notably from Europe, were higher than in prior months. Germany, for example, was licensed to ship 6,473.8 tonnes of cold-rolled sheet to the U.S in February through the 16th, up from a mere 243.1 tonnes in January and not far off a 2020 high for German cold-rolled imports of 6,493 tonnes last March, according to Commerce figures.

And the United Kingdom was licensed to export 7,958 tonnes to the U.S. through Feb. 16, more than double the 3,333 tonnes that arrived from the UK in January and not far off a 2020 high of 8,013 tonnes for UK export to the U.S. recorded in August.

In tin plate, meanwhile, the U.S. through the first 16 days of February had already surpassed January import volumes.

The U.S. was licensed to import 55,790 tonnes of tin plate through Feb. 16, up 86.4% from a January total of 29,923 tonnes and up 26.9% from 43,942 tonnes in February 2020. The bulk of that material is slated to come from the Netherlands (19,537 tonnes), Germany (15,300 tonnes) and China (10,283 tonnes). 

Hot-Dipped Galvanized

One sector where imports aren’t increasing significantly is hot-dipped galvanized. The U.S. was licensed to import 83,491 tonnes through Feb. 16, or 5,218 tonnes per day. That’s a comparatively modest 5.9% gain versus the 4,929 tonnes per day that arrived in January, a month that saw hot-dipped galvanized imports of 152,796 tonnes.

That’s cold comfort to consumers in a coated market that remains characterized by extremely limited spot supplies and unusually extended lead times. Indeed, some sources–including some producer sources–said more imports might be necessary to adequately serve the domestic market when it comes to coated material. And some went so far as to call for an easing of Section 232 tariffs and quotas on certain coated products.

By Michael Cowden, Michael@SteelMarketUpdate.com