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How Nucor Views the Lower Rebar and HRC Imports

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Sep. 29 2017, Updated 9:43 a.m. ET

Lower rebar imports

Previously in this series, we’ve looked at the consolidated steel import data. In this article, we’ll see which product categories saw major changes in imports last month.

Imports of rebar (or reinforcing bars) fell to 55,780 metric tons last month compared to 202,629 metric tons in August 2016 and 103,970 metric tons in July 2017. Nucor (NUE) is the largest rebar supplier in North America, and rebar pricing has been strong in September. Lower imports and strong steel scrap prices could have boosted rebar prices.

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Flat rolled imports

We also saw some moderation in flat rolled imports in August. Although CRC (cold roll coil) and HDG (hot-dip galvanized) steel imports registered an ~5.0% month-over-month decline, HRC (hot roll coil) imports fell almost 27%. Nucor has a high proportion of HRC in its flat roll product mix.

However, the damage from higher HRC imports in June and July has already been inflicted. We’ve seen weakness in HRC prices this month despite companies like AK Steel (AKS) pushing for price hikes. Although CRC and HDG imports have registered a modest decline, the absolute level of imports is still a bit high for the comfort of US steelmakers (CLF).

Sticky imports

Overall, flat steel imports have been sticky in the CRC and HDG space due to the lucrative spreads between US and international prices (MT). Higher CRC and HDG imports are negative for companies like U.S. Steel (X), which are primarily flat rolled steel producers.

Oil country tubular goods (or OCTG) have been on the rise over the last couple of quarters. In August, OCTG imports fell compared to the previous month. However, imports are still much higher compared to the corresponding period in 2016.

In the next article, we’ll look at some of the recent steel demand indicators.

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