US steel imports
US steel imports have been on the rise this year. Up October, US steel imports had risen on a yearly basis for 12 consecutive months. Earlier this month, both Nucor (NUE) and Steel Dynamics (STLD) gave lower-than-expected 4Q17 guidance. Among other factors, they blamed higher steel imports and the resultant pricing pressure as a drag on their earnings.
While releasing its 4Q17 guidance, Nucor said, “Expected fourth quarter of 2017 earnings in the steel mills segment will be negatively impacted by margin compression as the import surge experienced in the summer of 2017 has been working its way through end markets over the last half of the year. This pressure from imports combined with weakness in plate steel have caused us to lower our fourth quarter of 2017 earnings estimate for the steel mills segment.”
Imports have fallen
Meanwhile, November preliminary steel imports data released by the United States Census Bureau on December 22 showed some moderation in imports. The United States imported 2.46 million metric tons of steel products in November. To put this number in context, consider that the country imported 2.85 million metric tons in October and 2.54 million metric tons in November 2016. The yearly decline in steel imports looks encouraging as steel imports have been quite sticky this year.
Meanwhile, along with the consolidated imports data, we should also look at the breakup. In the next part of this series, we’ll see which major steel products reported a significant decline in imports last month.