NEW YORK The steel import sector remains sluggish, although some market participants anticipate a stronger 2013, sources told AMM on the sidelines of the American Institute for International Steels 62nd Annual Dinner in New York.
The current difficulty is due to a lack of clarity regarding domestic price direction and too narrow a pricing spread between U.S. and foreign material to make buying imports with long lead times viable, sources said.
One trader told AMM that the flat-rolled market has been "slow" and "dead," although he said he is more optimistic heading into the next year.
A number of logistics sources agreed, noting that the steel market overall in 2012 has been the "worst" theyve ever seen.
However, a number of market participants said they were expecting another near-term increase in domestic steel prices that could serve to boost the price differential between domestic and import pricing. If that happens, imports might pick up in the near term.
Domestic sheet tags have already inched higher following two rounds of fourth-quarter increases, but sheet buyers confirmed this past week that the upward momentum has stalled (amm.com, Nov. 28).
A sheet buyer said that if the spread between domestic and imported material gets "too high," hell start to increase his ratio of import to domestic buying.
A second trader agreed that import activity could be due for a revival. "First-quarter pricing has always been stronger," he said. "Things may look good in the next few months."
Meanwhile, some traders said they were moving away from importing commodity-grade material in favor of niche and specialty grades as they looked to remain relevant in a challenging marketplace. This includes certain light-gauge cold-rolled product from Italy and China, as well as light-gauge galvanized material from India, AMM understands.
Chris Prentice, New York, contributed to this story.