US steel imports
According to preliminary data released by the United States Census Bureau, the country imported 3.4 million metric tons of steel products in April. In comparison, US steel imports stood at ~3.0 million metric tons in April 2017. Notably, steel imports rose on a yearly and a sequential basis last month. US steel imports have risen on a monthly basis for the second consecutive month.
In absolute terms, April steel imports were at the highest level since June 2017. In June 2017, US steel imports were at the highest since January 2015. Last month’s steel imports were at the second-highest level in more than three years.
US steel imports have surged in the last two months despite the Section 232 tariffs that were imposed by President Trump in March. As the spreads between US and international steel prices have widened this year, US steel buyers have a higher incentive to order steel from steel producers (MT) overseas. The spreads between US and international steel prices drive US steel imports.
Impact on steelmakers
Higher US steel imports are negative for US steel producers like U.S. Steel Corporation (X), AK Steel (AKS), Nucor (NUE), and Steel Dynamics (STLD). The Trump Administration is negotiating quotas with the countries that are exempt from the steel tariffs. Later in the series, we’ll see how the quotas could impact US steel markets. Next, we’ll discuss a detailed breakup of April steel imports data.