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US Steel Imports Tumble—Is It the Start of a Trend?

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US steel imports tumbled in June

Cleveland-Cliffs’ (CLF) customers, including AK Steel and ArcelorMittal, are directly affected by steel imports into the United States. As a result, investors should track these data to get a sense of the future shipment outlook for CLF.

According to data released by the American Iron and Steel Institute, US (DIA) imports for finished steel in June totaled 2.48 million tons, a fall of 15.5% YoY (year-over-year). Steel imports fell YoY as well as sequentially last month. For the first half of 2018, steel imports totaled 17.87 million tons, 9.3% lower than in the same period last year.

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Import progression

After a few months, the Section 232 tariffs seem to have finally started to have an effect in terms of denting imports. The market share of imported steel was at 22% in June, and it’s at 25% YTD (year-to-date). The market share in June took a significant plunge, and if it continues in this direction, it could soon reach the 20% level, which is considered normal. Tariffs should be able to push the market share down further.

Recently, U.S. Steel Corporation (X) announced the restart of its Granite City plant after it was encouraged by tariffs, and Nucor (NUE) announced a new rebar mill. While steel prices in the United States have been positively affected by tariffs, the same benefits have not flowed to US steel companies’ stock prices. U.S. Steel, ArcelorMittal (MT), and AK Steel (AKS) are trading at YTD losses in contrast to Cliffs’ strong gains.

Next, we’ll see how US steel production is progressing and how steel tariffs could affect it.

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