Steel Products Prices North America

Flat, Long, and Semi-Finished Steel Imports Analysis

June 11, 2015

Licensed data for May was updated on June 9th through the Steel Import Monitoring System of the US Commerce Department. The SMU publishes several import reports ranging from this very early look using licensed data to the very detailed analysis of final volumes by district of entry and source nation which is available to our premium members.

The early look, the latest of which you are reading now, has been based on three month moving averages (3MMA) using May licensed data and March and April final data. 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 often not the same month in which the license was recorded. In 2014 as a whole our data showed that the reported licensed tonnage of all carbon and low alloy products was 2.3 percent less than actually receipts, close enough we believe to confidently include licensed data in this current update. Total rolled product licensed imports in the single month of May were 2,698,656 short tons which was 4.3 percent less than the April final result. On this basis flat rolled was up by 0.94 percent, long products down by 20.9 percent and pipe and tube down by 14.2 percent. At SMU we prefer not to dwell on single months results because of the extreme monthly variability that can occur in individual products. In the comments below we rely on three month moving averages to get a more representative picture.

Figure 1 shows the 3MMA through May licenses for semi-finished, flat and long products.

Flat includes all hot and cold rolled sheet and strip plus all coated sheet products including tin-plate plus both discrete and coiled plate. The import surge took a breather for flat rolled in December, the downward trend continued in January and February, stabilized in March, dived in April then flat lined in May. Semi-finished has been declining since October. May was the first month since last December for the 3MMA of long products imports to decline.

Figure 2 shows the trend of sheet and strip products since January 2011 as three month moving averages.

Of the big three tonnage items, HR, CR and HDG, hot rolled which was down by 21.2 percent in April was up by 7.6 percent in May. Cold rolled was down by 2.7 percent in May and hot dipped galvanized imports increased by 3.3 percent. All other metallic coated (mainly Galvalume), which had increased every month February through April declined by 22.5 percent in May. Tin plate had been trending up for all of 2014 but has had no direction this year. Electro-galvanized keeps on rolling along with little change in three years. In the single month of May hot rolled sheet and strip licenses were 373,335 tons, up by 24.3 percent from April, HDG was 334,059 tons, up 15.1 percent and cold rolled came in at 206,047 tons, down by 16.2 percent.

Table 1 provides an analysis of major product group and of sheet products in detail.

It compares the average monthly tonnage in the latest three months through May with both three months through February, (3M/3M) the same period last year, (Y/Y). Semi-finished slabs and billets were down by 30.5 percent 3M/3M and by 44.1 percent Y/Y. The total tonnage of hot worked products was 2,863,221 tons in May on a 3MMA basis, up by 256,521 tons from May last year. The three moving average was down by 5.4 percent from the average of three months through February and up by 9.8 percent from a year ago. These trends indicate that in the big picture the peak of import volume has passed but this is not necessarily true for individual products. The color codes in Table 1 for the three month and year over year change show which products are improving and which are still experiencing import volume increases. For example hot rolled is past the peak but HDG is not.

Table 2 shows the same analysis for long products.

For total long products the tonnage was up by 19.4 percent, 3M/3M and by 6.7 percent y/y which means that the situation is still deteriorating led by rebar and heavy structurals. Wire rod is the only long product to have a decrease in volume 3M/3M. Imports of pipe and tube declined by 15.4 percent 3M/3M but on a Y/Y basis were up by 6.7 percent.

Figure 3 shows the import market share of long and flat products through April which is the latest data we have for total steel supply.

For long products the import share has skyrocketed since January and is approaching 30 percent. The import market share for sheet products has stabilized in the last five months and now stands at 23.6 percent.