Steel Blog

The following calculation is used by Steel Market Update to identify the theoretical spread between foreign hot rolled steel import prices (delivered to USA ports) and domestic (USA) hot rolled coil prices (FOB Domestic mills). We want our readers to be aware that this is only a "theoretical" calculation as freight costs, trader margin and other costs can fluctuate, ultimately influencing the true market spread.

Our primary numbers for this analysis are from Platts as we compare European HRC export pricing (FOB Ruhr), Turkey HRC export pricing (FOB Turkey) and Chinese HRC export pricing (FOB Chinese port). Be aware that Chinese hot rolled pricing is not available to the U.S. market, so the Chinese spread is nothing more than an exercise in "what if." SteelBenchmarker is the secondary data provider of foreign hot rolled coil prices and is noted further down in this article.



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License Data Indicates Stubborn Import Market

Thursday, 12 October 2017 14:53

The expectation has been for a huge swing lower in the amount of flat rolled foreign steel imports coming into the United States in October. The industry is waiting for the combination of the drying up of the surge of orders placed to “beat” any Section 232 duty and the impact of higher world steel prices, which has made foreign steel less competitive in the U.S.

One of the items that was anticipated was that the Section 232 review on steel recommendations would be provided to President Trump by Department of Commerce Secretary Wilbur Ross at the end of June, and then the announcement on any duties/quotas would be made potentially as early as July 2017. As we all know, the recommendations from Ross and any presidential decision have been put off until after tax reform has been passed by the U.S. Congress.

So, what has been happening with foreign steel imports over the past two years? The data is quite telling.



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Flat Rolled Steel Imports Down

Thursday, 05 October 2017 15:29

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.



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Cold Rolled, Coated Imports Continue to Surge

Thursday, 05 October 2017 14:36

Despite the major flat rolled trade cases concluded in 2016, flat rolled steel imports continue to surge. Coated imports are at their highest levels ever and cold rolled imports are near record levels. This article, by Paul Lowrey of Steel Research Associates, provides some historical context to the current situation.



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The United States’ share of the global steel scrap trade has changed little in the two and a half years through second-quarter 2017. Steel Market Update performs this analysis quarterly to understand the gyrations of the domestic scrap market and where the U.S. stands as a global player. This data is not very current because some nations are slow to report, but we still believe it gives a valuable perspective on global trends and is the foundation of where we are today.



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The following calculation is used by Steel Market Update to identify the theoretical spread between foreign hot rolled steel import prices (delivered to USA ports) and domestic (USA) hot rolled coil prices (FOB Domestic mills). We want our readers to be aware that this is only a "theoretical" calculation as freight costs, trader margin and other costs can fluctuate, ultimately influencing the true market spread.

Our primary numbers for this analysis are from Platts as we compare European HRC export pricing (FOB Ruhr), Turkey HRC export pricing (FOB Turkey) and Chinese HRC export pricing (FOB Chinese port). Be aware that Chinese hot rolled pricing is not available to the U.S. market, so the Chinese spread is nothing more than an exercise in "what if." SteelBenchmarker is the secondary data provider of foreign hot rolled coil prices and is noted further down in this article.



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As was mentioned in the previous issue of Steel Market Update, foreign steel imports for September continue to trend toward another 3.0 million net ton month based on SMU analysis of import license data. If imports come in around 3.0 million tons it would be the lowest level since February 2017 when total steel imports were 2.7 million net tons.



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Rules of Origin on Agenda for NAFTA Talks

Tuesday, 26 September 2017 10:39

U.S. content in NAFTA automobiles is shrinking and contributing to the trade deficit America has with Canada and Mexico, according to Secretary of Commerce Wilbur Ross.

In an editorial for the Washington Post, Ross cites a new study analyzing data from 1995 to 2011 that indicates U.S.-produced content in manufactured goods imported from Canada fell from 21 percent to 15 percent during the 16-year period. An even more dramatic decline was observed in goods imported from Mexico, from 26 percent in 1995 to 16 percent in 2011. Ross said there is no reason to think the situation has improved.



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Pace of Foreign Steel Import Licenses Picks Up

Thursday, 21 September 2017 15:53

Earlier this month, foreign steel imports for September were trending toward a 2.6-million-ton month based on import licenses through the first 12 days of the month. Over the past week, the pace for import license requests has picked up. This is most likely due to the impact of the two hurricanes: Harvey in Texas and Irma in Florida. Based on the latest import license data, September is now trending toward a 3.0-million-ton month. The trend is modestly lower than our 12-month and 3-month moving averages. Yet, it is a bit of a disappointment as the steel industry is expecting foreign steel imports to drop dramatically due to the threat of the Section 232 investigation on steel from earlier this year. That threat has now been pushed out to maybe as late as 1Q next year.



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Section 232 On Hold Until Tax Bill Complete

Thursday, 14 September 2017 15:32

World Trade Online reported this morning that Commerce Secretary Wilbur Ross told a U.S. Senator the Section 232 review on steel will not be ready until after tax reform legislation has been completed. This is in line with what President Trump said in July when he told The Wall Street Journal, “We’re waiting till we get everything finished up between health care and taxes and maybe even infrastructure.”

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