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Understanding The Major Participants In The Indirect Steel Trade

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Jan. 1 2015, Updated 8:32 a.m. ET

Indirect steel trade

In the previous parts, we’ve analyzed the key dynamics of indirect steel exports. Let’s now look at the indirect steel trade in major indirect steel exporting and importing countries. We’ll look at net exports and net imports. You can define net exports as exports minus imports. Similarly, net imports are imports minus exports.

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China is the biggest exporter

China is the biggest net indirect steel exporter. This should not be surprising given the manufacturing prowess of China. It’s also the largest direct exporter of steel. We’ll analyze this in detail in the coming parts of this series.

Japan, South Korea, and Germany are the other major indirect steel exporters. This is because of the vehicles these countries export. Some of the world’s largest automobile companies are based in these countries.

For more information, you can also read how aluminum is replacing steel in automobiles.

United States is largest importer

The United States is the largest indirect importer of steel. The net indirect steel imports in the United States were 15.3 metric tonnes (or Mt). This represents around 15% of total steel consumption in the United States. Indirect steel imports in the United States, however, are less than the direct steel imports.

Russia and Canada are among the other major importers in the indirect steel trade. This can be verified from the above chart.

Russia, however, is a net exporter of direct steel. Recently, the United States scrapped a 15-year-old trade treaty with Russia. This is expected to benefit US steel companies such as AK Steel (AKS), Nucor (NUE), ArcelorMittal (MT), and U.S. Steel Corporation (X). Investors can avoid the hassles of picking individual securities by choosing ETFs for their portfolios. The SPDR S&P Metals and Mining ETF (XME) can give you exposure to the steel industry.

Move to the next part to learn more about direct steel imports.

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