Imports' Share of Sheet and Plate Markets Up Again in September

Imports’ share of domestic sheet product shipments hit its lowest level in more than a decade at 9.7% at the beginning of 2020. Since then, except for a slight contraction in April, sheet imports into the U.S. have risen month on month. September’s results were driven by a 5.1% decrease in domestic shipments, while import totals exceeded 1 million tons for the first time since April 2018. Despite the 6.4% increase of foreign sheet product month on month, overall sheet product shipments were down by 3.1% in September, led by the 5.1% decline in domestic mill shipments.   

Plate products in September saw an overall increase in shipments as apparent supply rose by 1.1% month on month. The gain was driven by a surge of 28.4% in imported plate products, while domestic mill shipments edged down 6.2% during the month. September plate imports of 216,919 tons represented the highest monthly total year-to-date and the strongest since May 2018. All told, total shipments downstream, including foreign and domestic, were 809,337 tons in September, the highest total all year.

Domestic sheet shipments in September totaled 4.427 million tons, down 5.1% from the 4.665 million tons the month prior. Imports of sheet products in September totaled 1.049 million tons, up from 986,432 tons the month prior and the highest mark since April 2018 when imports totaled 1.074 million tons.

The import share of hot rolled coil (HRC) rose 2.8 percentage points to 18.8% in September, the highest mark since January 2015. The increase in share was driven by a 13.6% jump in imports month on month, following a 23.7% surge in August. HRC imports totaled 419,953 tons, the highest in nearly seven years.

Imports of cold rolled coil (CRC) and other metallic coat (OMC) were both up in September when compared to the month prior, pushing market share of foreign CRC and OMC to 16.2% and 27.4%, respectively. Galvanized (hot dipped and electrolytic) imports fell 18.7% in September to 224,737 tons or 13.9% of market share. The figure is a 2.0 percentage point decrease month on month from 15.9% in August. 

The import market share for plates in coil jumped to 56.0% in September, a 7.1 percentage point increase month on month. The gain was driven by a 22.4% rise in imports month on month totaling 168,072 tons in September, the highest since July 2015. The growth in imports coincided with an 8.1% decrease in domestic shipments of plates in coil. Despite the decrease in U.S. mill shipments of plate in coil, total supply (domestic mill plus imports) was 299,968 tons, the highest in over two years.

The table below displays total supply to the market in three months and 12 months through September 2021 for sheet and plate products and six subcategories. Supply to the market is the total of domestic mill shipments plus imports. It shows imports on the same three- and 12-month basis and then calculates import market share for the two time periods for six products. Finally, it subtracts the 12-month share from the three-month share and color codes the result green or red according to gains or losses. If the result of the subtraction is positive, it means that import share is increasing and the code is red.

The big picture is that imports’ share of sheet and plate continues to rise month after month, in some cases nearing all-time highs. The big second-half jump in total imports is the result of historically and disproportionately high domestic steel prices. The trend should continue to provide supply-side relief to buyers, keeping a better supply-demand balance and eroding current domestic steel prices.

Hot rolled and cold rolled sheet and strip have seen a trend shift along with plate products, illustrating how import competition is rising versus domestic products in three months compared to 12 months. Most notable of those subcategories are plates in coil (up 8.7%) and hot rolled coil (up 4.8%) through September 2021.

The import market share of individual plate products as well as a breakdown of the market share for plates in coil are displayed together in Figure 1. The historical import market share of plate and sheet products and the import market share of the four major sheet products are shown side-by-side in Figure 2. The import share of plate had been decreasing erratically over the past six years, but has trended up this year and is back to pre-pandemic levels, hovering just below 30.0%. Sheet product imports’ share had also trended down over the past several years, but has gained ground since the beginning of the year despite a steady rise in domestic shipments. The import market share of plates in coil is now higher than domestic shipments at 56.0%, and holding strong since the beginning of the year.

By David Schollaert, David@SteelMarketUpdate.com