U.S. Steel Imports Up 22% in YTD

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U.S. year-to-date imports of steel are up by more than one-fifth of 2016 levels, according to a Wednesday release from the American Iron and Steel Institute (AISI).

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According to the AISI report based on preliminary U.S. Census Bureau data, through the first seven months of 2017 total and finished steel imports are 23,168,000 and 17,938,000 net tons, up 22.1% and 17.3%, respectively, versus the same period in 2016.

Several products posted significant year-to-date increases in import volumes. Oil country goods (up 254%), standard pipe (up 47%), line pipe (up 39%), cold rolled sheets (up 37%), sheets and strip all other metallic coatings (up 35%), mechanical tubing (up 32%), hot rolled bars (up 26%), sheets and strip hot dipped galvanized (up 25%), wire rods (up 13%) and tin plate (up 11%) were among the leaders in this category.

In terms of steel import market share, the U.S. hit 30% in June, but dipped down to approximately 29% for July. The year-to-date market share stands at 28%, according to the data.

By country, South Korea led the way as the biggest exporter of steel to the U.S. in July, sending 332,000 NT (which was actually down 13% from the final June total). Turkey (252,000 NT, down 23%), Germany (148,000 NT, up 27%), Japan (137,000 NT, down 2%) and Taiwan (120,000 NT, down 29%) followed South Korea as the top exporters to the U.S.

On a year-to-date basis, Taiwan boasts the largest percentage increase in exports to the U.S. In descending order of volume, South Korea (2,265,000 NT, down 5%), Turkey (1,723,000 NT, up 14%), Japan (937,000 NT, down 12%), Taiwan (784,000 NT, up 54%) and Germany (750,000 NT, up 7%) led the way.

China Posts Month-Over-Month Increase, YTD Decrease

China, which has drawn much criticism from the Trump administration and U.S. primary steel producers for excess capacity, exported 86,000 NT of steel to the U.S. in July, a 4.6% increase from the 82,000 NT exported in June. In the first seven months of the year, however, Chinese steel exports to the U.S. are down from 515,000 NT last year to 506,000 this year, good for a 1.7% drop.

Of course, the Trump administration’s Section 232 investigation into steel imports, launched in April, has yet to be publicly concluded. While the impact of Chinese excess capacity has dominated much of the steel discourse within the Trump administration and the U.S. steel industry, China represents a relatively small share of the U.S. steel import market.

Should the Trump administration opt for trade remedies in the form of tariffs, quotas, or a hybrid tariff-quota solution, countries like South Korea, Turkey, Japan and Germany could also be affected.

What About NAFTA?

In other policy news, during a campaign-style rally Tuesday in Phoenix, President Donald Trump said the North American Free Trade Agreement (NAFTA) would “probably” be terminated. Whether that is a negotiating tactic — as Mexican and Canadian officials opined — or an earnest indication of Trump’s policy direction remains to be seen. Given that Trump reportedly nearly pulled the U.S. out of NAFTA in April — just three months after withdrawing from the Trans-Pacific Partnership (TPP) — one cannot dismiss the potential reality of his comments.

While various stakeholders have differing opinions on the success of NAFTA — the 23-year-old trade agreement uniting the U.S., Canada and Mexico — there is no doubt that the U.S.’s withdrawal from it would have far-reaching effects, particularly on long-established supply chains.

For example, although Canada is not a top-level steel exporter, a significant majority of its steel exports go to the U.S.

According to the International Trade Administration’s February steel exports report on Canada, Canadian steel exports in 2015 amounted to 1.5% of global exports and one-twentieth of Chinese steel exports that year.

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From January-September 2016, 87% of Canadian steel exports went to the U.S., with 8% going to Mexico. As such, Section 232 trade remedies, combined with a potential withdrawal from NAFTA by the U.S. could conspire to severely impact — or, at the very least, significantly alter — the composition of the Canadian steel export market.

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