Sheet Imports Decline While Slabs Remain Elevated

Other products followed by SMU that were below both the 12-month and 3-month averages were coiled plate, cold rolled, galvanized, other metallic (AZ/AL) and cut plate. Only oil country tubular goods (OCTG) was slightly above the 3-month moving average, but was slightly below the 12-month moving average.

As mentioned above, foreign slab receipts continue to be high with the past three months averaging 843,000 net tons per month. Most of the semi-finished steels are going to mills such as California Steel, JSW Baytown, NLMK USA and AMNS in Calvert, Ala. One of our readers made an interesting comment that we want to leave you to think about:

“I continue to be surprised that most of the industry coverage around imports discusses lower sheet receipts. However, slabs continue at higher rates and are nullifying the impact of lower sheet receipts. And perhaps to make it slightly worse, there’s a lag effect, where those extra slabs will get rolled in the months ahead, acting somewhat as delayed inventory reporting by buyers. Assuming we continue to see slab imports arriving at recent levels, then the only way this doesn’t impact supply is if there’s a pullback in melt output (assuming all else is equal). Given current margin spreads for the mills, I think they’d all be loath to cut back production,” said one service center executive.

SMU will continue to monitor imports and will review slab data in more detail in future issues.