Steel imports fell slightly in 2013 and the
outlook for 2014 is for more of the same, with relatively
stagnant economies at home and abroad leading metal players to
conclude that this year likely will be uneventful.
As for imports of alternative
irons for mill production or a variety of nonferrous
metalsand for exports of U.S. products all along the
supply chaina similar pattern appears to be emerging,
although there is a chance for slightly more volatility in
these areas, market participants said.
While the trade shortfall
looks bad on the surface, beneath the floorboards it matters
little to the U.S. economy. Many trade categories are very
volatile (and) beneath this volatility is a foreign trade
sector beset by mediocrity on both sides of the ledger,
said Michael Montgomery, U.S. economist at Lexington,
Mass.-based IHS Global Insight Inc. Exports are flat
because most of the rest of the world is barely growing.
Imports are flat because both domestic consumption and
investment are in low gear.
But there is fear about just how
many imports will arrive this year, with some wondering if
competitive foreign material will hurt domestic
Theres probably a
little bit of inventory hedging on the foreign side, one
mill source said, referring to the potential impact of 2014
steel sheet imports on pricing. Were at the
($100-per-ton) range right now between foreign and domestic,
and theres fear that if the gap gets any wider the
floodgates might open up.
Business has definitely
been getting better and everyone is feeling pretty good about
it, a steel trader said. People in the construction
markets were talking about how (2013) was looking to end up
pretty good and (this) year should be better. Of course
were going to see imports, but I dont think
itll be a flood.
Two more importers said that
business continued to look busy, particularly on coated
products. Were getting renewed interest and
business is looking to be pretty good, a second trader
Weve been very busy
lately, but demand hasnt changed at all; its the
pricing, another trader said. Quantities have
changed dramatically, and the same people who have put most of
their buys traditionally into domestics are now moving a larger
percentage into foreign.
Several other traders agreed,
noting that business has seen a meaningful pickup for customers
in a variety of end markets. However, they said the fear of
large quantities arriving stateside in 2014 might be
Recent figures from the U.S.
Census Bureau show that total steel imports were expected to
end 2013 down 4.9 percent compared with 2012.
U.S. steel imports fell in
November compared with the previous month, with hot-dipped
galvanized sheet and strip, line pipe and oil country tubular
goods (OCTG) leading the charge down, according to preliminary
U.S. Census Bureau data.
Steel imports totaled 2.34
million tonnes for the month, down 16.7 percent from 2.81
million tonnes in October and 4.9 percent lower than the 2.46
million tonnes imported in November 2012. Imports of hot-dipped
galvanized sheet and strip fell 38.6 percent to 133,283 tonnes
in November from 216,936 tonnes the previous month; line pipe
dropped 27.5 percent to 116,951 tonnes, the lowest monthly
level last year, from 161,381 tonnes in the same comparison;
and OCTG imports fell 26.5 percent to 264,400 tonnes from
359,754 tonnes. Stainless imports decreased 16 percent to
67,430 tonnes in November from 80,262 tonnes a month earlier,
the preliminary data show.
At the same time, U.S. steel
exports fell to a more than one-year low in November as most
products logged declines. Steel exports totaled 852,015 tonnes,
down 17.1 percent from October and 6 percent below November
2012, according to the latest data from the U.S. Commerce
Departments Enforcement and Compliance
November shipments to North
American Free Trade Agreement (Nafta) partners fell from the
previous month, with exports to Canada down 13.3 percent to
469,928 tonnes and those to Mexico tumbling 26.1 percent to
274,704 tonnes. Exports to Brazil also fell sharply in
November, plunging 80.9 percent to 1,977 tonnes from 10,372
tonnes in October.
In the carbon and alloy sector,
major decreases were seen in exports of hot-rolled sheet (down
44.4 percent), cut-to-length plate (off 6.8 percent),
hot-dipped galvanized sheet (down 6 percent) and heavy
structural shapes (off 11.4 percent). Only a handful of
products saw month-on-month increases, including cold-finished
bar (up 26.7 percent to 13,217 tonnes) and ingots for steel and
castings (up 17.9 percent to 12,951 tonnes).
Meanwhile, the U.S. iron and
steel mill products trade deficit narrowed in November from the
previous month, according to the latest U.S. Bureau of Economic
Analysis data. Iron and steel mill product exports decreased
1.8 percent in November while imports fell 9.7 percent compared
with October, resulting in a 20.1-percent drop in the trade
deficit to $579 million from $725 million. The iron and steel
mill products trade deficit in the first 11 months of the year
totaled $6.28 billion, down 20.7 percent from $7.92 billion in
the same period in 2012.
But not everyone sees imported
material as a threat to domestic business. When it comes to
alternative irons, some said imports are a necessary part of
Imports of low-residual
iron are approximately as much as domestic arisings of prime
steel scrap, said Robert Hunter, director of marketing
and applications for Charlotte, N.C.-based Midrex Technologies
Inc. These imports are needed because the 7-, or 8-, or
9-million tons per year of prime scrap that are generated in
the Nafta nations are simply not enough to satisfy the demand
for high-quality, prime metallic iron.