US steel imports
The US imported 3.0 million metric tons of steel products in March 2018, according to preliminary data released by the Census Bureau. In comparison, the figure was 3.1 million metric tons in March 2017 and 2.2 million metric tons in February 2018. US steel imports rose more than 34% in March compared to February. Higher steel imports are negative for US steel companies like U.S. Steel Corporation (X), AK Steel (AKS), Steel Dynamics (STLD), and Nucor (NUE). For these companies, higher steel imports are their main challenge.
Section 232 tariffs
Last month, President Trump slapped 25% tariffs on steel imports following the Department of Commerce’s Section 232 investigation. The probe determined that steel imports are a threat to US national security. Investors expected a fall in March steel imports after the Section 232 tariffs were imposed. In contrast, there has been a sharp monthly rise in steel imports (MT). In absolute terms, March steel imports were the highest since August 2017. Is the sharp rise in March steel imports a reason to worry? Well, not exactly.
First, the Section 232 tariffs came into effect beginning on March 23. So, the tariffs were only in place for a week last month. In such trade actions, imports tend to spike before the final decision. Steel importers might have ordered extra steel in March after the Department of Commerce released its Section 232 findings in February.
Next, we’ll discuss US steel imports and how imports impact US steel companies.
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