US steel imports
If you go through any of the US steel companies’ earnings calls extending back to the past four to six quarters, you will find one thing in common. Steel executives sighted the steep rise in US steel imports as the main reason for their woes. Earlier this year, top executives of U.S. Steel (X), Nucor (NUE), and ArcelorMittal (MT) presented their case before a team of congresspeople from major steel-producing states. In particular, they briefed the congresspeople on the rise of steel imports in the US (VTI).
During the company’s fiscal 3Q15 results, AK Steel’s CEO, James L. Wainscott, said that “During the third quarter, we faced significant challenges especially in terms of pressures on carbon steel spot market selling prices, order intake rates, production volumes and shipments. And all of these challenges stem from a common and a continuing problem: imports.”
US steel imports fell
However, US steel imports have been falling for the last few months. You can see this in the above graph. US steel imports fell on a YoY (year-over-year) basis for eight consecutive months. In November, the US imported 2.1 million metric tons of steel products—a YoY fall of 36%. This is the highest YoY fall in steel imports that we’ve seen in a long time. In November, US steel imports fell to a four-year low. This is an encouraging development for the domestic steel industry. However, you should also be looking at the breakup of the steel imports data. We’ll discuss this in the next part of the series.