US April steel imports
In the previous part of this series, we saw that US steel imports declined steeply in April on a year-over-year basis while staying relatively flat as compared to March. Now, we’ll see which product categories saw major changes in April.
Flat steel products consist of sheets and plates that are used in a wide range of industries such as the automobile, domestic appliances, shipbuilding, and construction sectors. Hot rolled coil (or HRC), cold rolled coil (or CRC), and hot dip galvanized (or HDG) sheets are among the most widely used flat steel products. Note that the US has slapped strict anti-dumping duties on imports of these products.
In April, HRC and HDG imports rose 5.8% and 3%, respectively, as compared to March. However, CRC imports jumped almost 15% over this period. The jump in the CRC spread can be attributed to record high HRC-CRC spread. As the differential between the US and international CRC prices has increased, US steel buyers seem to be scouting overseas to buy CRC.
OCTG (oil country tubular goods) products, which are used in the energy industry, have continued their downside in April as can be seen in the graph above. U.S. Steel (X) and Tenaris (TS) have been negatively impacted by falling OCTG demand.
Rebar imports declined steeply in April, falling more than 56% as compared to March. As discussed previously, US rebar prices have started to gain traction only towards the end of April. Furthermore, higher scrap prices and strong rebar demand in Turkey, which is the largest rebar exporter to the United States, likely led to lower imports in April. Nucor (NUE), which is the largest rebar supplier in the US market (DIA), would benefit from lower rebar imports. Gerdau (GGB) and Commercial Metals Company (CMC) are the other leading rebar suppliers.
Along with steel imports, there are several other industry indicators that you should track. You can read A Deeper Dive into May 2016 Steel Industry Indicators to keep track of the other developments in the steel industry.
You can also read A Closer Look at Steel Companies’ 1Q16 Earnings and Future Plans for a comparative analysis of US steel companies.