Steel imports in the United States
As 2014 draws to a close, let’s discuss the single biggest risk that the US steel industry faces. We’re talking about steel imports. US steel imports are at historically high levels. This has dampened the mood among steel companies in the United States.
ArcelorMittal (MT), U.S. Steel Corporation (X), Nucor (NUE), and AK Steel (AKS) are some of the major US steel companies. The SPDR S&P Metals and Mining ETF (XME) has invested in some of these companies.
Steel consumption in the United States has been pretty strong this year. The final steel consumption figures will be released sometime in 2015. But looking at the key indicators, steel demand in the United States should be up by ~5% this year. This was forecast by the World Steel Association in its short-term outlook. This can be seen in the above chart.
Steel production, on the other hand, is up by only 2% compared to 2013. This is surprising given the strong demand for steel. The reason is fairly simple and straight. Third countries are importing steel. The US steel industry has been crying foul about these imports for the last few quarters.
In this series, we’ll analyze the dynamics of the global steel trade. We’ll analyze the major steel exporters to the United States. When we talk of cheap imports, China comes out as the culprit. We’ll also analyze the role of China in the global steel trade. We’ll see which countries are the major steel exporters to the United States.
Let’s first understand more about steel imports.