Flat, Long, and Semi-Finished Imports through September 2016

Figure 1 shows the 3MMA through September licensed tons of semi-finished, flat and long products since January 2004.

Imports of semi-finished in September were 686,891 tons with a three month moving average of 714,247 tons. February’s import volume of semis was an outlier, since then the volume has recovered to a level typical of 2015. “Flat” includes all hot and cold rolled sheet and strip plus all coated sheet products plus both discrete and coiled plate. The 3MMA of flat rolled imports peaked at 1,634,000 tons in November 2014, fell to 1,009,000 tons in April this year and has since climbed back to 1,191,912 tons. Long product imports have been range bound between 519,000 tons and 772,000 tons since March 2014 with no particular trend evident. In September the 3MMA of long product imports was 636,998 tons.

Figure 2 shows the 3MMA trend of sheet and strip products since January 2004.

The total of these products was up by 12.4 percent in three months through September compared to three months through June. HRC and tin plate decreased in September, other metallic coated, (mainly Galvalume) was unchanged and HDG and CRC continued to increase. Electro-galvanized has been quite constant for 2.5 years.

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

It compares the average monthly tonnage in the three months through September 2016 with both three months through June, (3M/3M) and three months through September 2015, (Y/Y). On a Y/Y basis the total of all rolled products was down by 152,430 tons or 6.5 percent, as total sheet products were down by 4.9 percent. Tubulars were down by 23.6 percent. Semi-finished slabs, blooms and billets were up by 17.5 percent and long products were up by 10.4 percent. On a 3M/3M basis the situation was very different and that column in Table 1 has a lot more red signifying products where imports increased in the July through September time frame compared to April through June. The total volume of hot worked products was up by 7.5 percent, 3M/3M and within the sheet products ranged from an increase of 23.1 percent for tinplate to a decrease of 5.7 percent for electro-galvanized. Of the big 3 sheet products 3M/3M, HRC was up by 15.2 percent, CRC was up by 19.1 percent and HDG was up by 4.9 percent.

Table 2 shows the same analysis for long products.

The total tonnage of long products was up by 59,900 tons per month Y/Y. Rebar was up by 65,092 tons and hot rolled bars were down by 16,784 tons. On a 3M/3M basis the total volume of long products increased by 8.5 percent led by rebar that was up by 46.6 percent.

Figure 3 shows the import market share of sheet and long products through July which is the latest data available for total steel supply.

The import market share of sheet products peaked at 24.3 percent in March 2015 and has been less than 20 percent for each month of 2016. In July import share was 19.7 percent, up from a recent low of 17.4 percent in May. Long product import market share peaked at 29.4 in April 2015 but has only had two months since then below 25 percent. Import share of longs in July was 26.4 percent.

Net imports equals imports minus exports and our analysis is based on the final volumes through July. We regard this as an important look at the overall trade picture and its effect on demand at the mill level. Figure 4 shows that net sheet product imports on a 3MMA basis at 637,137 tons in July were down by 81,200 tons year over year and down by 527,900 tons YTD though there was an upward trend in 3 months through July.

Compared to imports, exports have been relatively consistent for almost eight years. Net sheet steel imports are still high by historical standards. If the Fed raises interest rates in December, the US $ will appreciate against the currencies of the steel trading nations and this in turn will tend to drive imports higher and exports lower in 2017.

Explanation: SMU publishes several import reports ranging from this very early look using licensed data to the very detailed analysis of final volumes by product, by district of entry and by source nation which is available on the premium member section of our web site. The early look, the latest of which you are reading now has been based on three month moving averages (3MMA) using the latest licensed data, either the preliminary or final data for the previous month and final data for earlier months. 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. We are more interested in direction than we are in absolute volumes at this stage. 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 twelve month evaluation as a longer time period was considered.