Steel Production and Imports: What’s Driving US Steelmakers?

Steel production

The steel industry has seen a literal change in fortune over the last couple of months. The year started on a weak note, and most steel stocks fell to multiyear lows in the first trading week of the year, tracking the weakness in the commodity sector (GCC). However, prices recovered after that.

Steel Production and Imports: What’s Driving US Steelmakers?

The graph shows 2016 price movements of different steel companies. Though steel stocks have pared some of their recent gains, they are still trading with decent year-to-date (or YTD) gains. U.S. Steel (X) and AK Steel (AKS) have been among the better-performing steel companies this year, gaining more than 80% so far in 2016. ArcelorMittal (MT), which had fallen steeply after its 4Q15 earnings, is also trading with YTD gains of 29%. Nucor (NUE) and Steel Dynamics (STLD) are trading with YTD gains of 14% and 22%, respectively.

Series overview

In our previous series, we noted that spot steel prices in the US are rising. One of the factors helping US steel pricing has been the steep fall in imports. Steel executives have been regularly blaming the steep rise in US steel imports as the main reason for their woes. Steel companies aren’t wrong about pegging steel imports as their biggest challenge. US steel imports reached alarmingly high levels in late 2014 and continued to remain at elevated levels in 2015.

More steel production in countries like China and Korea has led to a glut of steel in international markets. In this series, we’ll look at February steel production and imports data. This will help you understand the steel industry’s health. Let’s begin by looking at the global steel production data.