Steel Products Prices North America

Flat, Long, and Semi-Finished Steel Imports Analysis

October 9, 2015

Licensed data for September was updated on October 6th 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 September licensed data and July and August final data (explanation at end).

Total rolled product licensed imports in the single month of September were 2,147,018 short tons with a 3MMA of 2,351,446 tons. September licenses were down by 10.2 percent from the final August volume. On this basis flat rolled was down by 7.8 percent, long products down by 17.3 percent and pipe and tube down by 17.9 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 use three month moving averages to get a more representative picture.

Figure 1 shows the 3MMA through September 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 3MMA of flat rolled imports peaked at 1,634,000 tons in November last year and has since declined to 1,294,689 tons in September. Last October the 3MMA of semi-finished imports was 930,000 tons and this volume declined to 612,304 tons in September. Long product imports have been stuck in the range 519,000 tons to 772,000 tons since March last year with no particular trend evident. In September the 3MMA of long product imports was 578,717 tons.

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 steadily increased in May through August and declined again in this latest data. Cold rolled peaked at 283,000 tons in November and decreased to 205,773 tons in August then increased again to 225,111 tons in September. Hot dipped galvanized imports increased in February through May and have been erratically decreasing since then. All other metallic coated (mainly Galvalume), peaked in May at 102,000 tons, decreased in June and July and since then have been flat. Tin plate had been trending up for all of 2014 but has been range bound this year. Electro-galvanized keeps on rolling along with little change in three years.

Table 1 provides an analysis of major product groups and of sheet products in detail. It compares the average monthly tonnage in the latest three months through September with both three months through June (3M/3M) and three months through September last year (Y/Y). Semi-finished slabs, blooms and billets were up by 4.0 percent 3M/3M but down by 28.3 percent Y/Y. The total tonnage of hot worked products was 2,351,446 tons in September on a 3MMA basis, down by 473,932 tons from September last year. The three moving average was down by 10.0 percent from the average of three months through June and down by 16.8 percent from a year ago. These trends indicate that in the big picture the peak of import volume has passed and this is generally true for all products though some more than others. The color codes in Table 1 for the three month and year over year change show which products are improving and which have still experienced import volume increases in these two time frames. It sometimes seems to us as we write these reports that we are contradicting ourselves but if readers use the tables for short term evaluation and the graphs for long term then our analysis should make sense.

Table 2 shows the same analysis for long products. For total long products the tonnage was down by 5.4 percent 3M/3M but up by 6.5 percent Y/Y. In the 3M/3M comparison, rebar and wire rod both increased which they also did year over year. Having said that we need to break our rule and observe that in the single month of September rebar was down by 36 percent from August. Imports of pipe and tube declined by 33.5 percent 3M/3M and by 42.3 percent y/y. In the single month of September, rail products at 61,756 were the highest since April 2013 and the 3MMA was at the top end of the range that has existed since the recession.

Figure 3 shows the import market share of long and flat products through July which is the latest data available for total steel supply. For long products the import share skyrocketed in January through April then declined sharply in May, June and July. The import market share for sheet products peaked at 24.3 percent in March and fell to 22.1 percent in July.

Explanation: 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. The discrepancy declined continuously during the course of the 12 month evaluation as a longer time period was considered.