July steel imports
According to the preliminary data released by the United States Census Bureau, the United States (SPY) (SPX-INDEX) imported ~3.2 million metric tons of steel products in July 2017, which is 6.4% higher than the corresponding month last year.
Growth rate has slowed down
Although this is the ninth consecutive month that US steel imports have risen YoY (year-over-year), there are a few positives in July’s steel imports data. For instance, July steel imports fell 10.3% compared to June. Also, the yearly growth in July steel imports is the lowest since January 2017. It’s worth noting that steel imports spiked in June, rising 37.0% YoY to 3.5 million metric tons that month. That was the highest on record since January 2015.
Having said that, the fall in July steel imports is mainly due to lower imports of semi-finished steel products (MT) (X). Imports of blooms, billets, and slabs, which need to be further processed to produce finished steel products, fell 301,442 metric tons between June and July.
During its 2Q17 earnings call, Nucor (NUE) lamented the rise in steel imports. John Ferriola, Nucor’s CEO (chief executive officer), noted during the company’s 2Q17 earnings call, “The estimated finished steel import market share in the months of June 2017 was 29%, matching the record annual level set in 2015. The year-to-date market share for finished steel imports stands at approximately 27%.” AK Steel (AKS) also pointed to a steep increase in GOES (grain-oriented electrical steel) imports that are used in electrical transformers.
In the next part, we’ll look at a detailed breakdown of July’s steel imports data.