U.S. Steel Imports Continue to Increase Amid Oversupply

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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. domestic steel mills operated at only 76% of their full capability in the first week in 2013. About 1.8 million tons of crude steel was produced, and while that was slightly up, it was down 4.6% from a year ago. Overall, industry production is down about 7% from a year ago for the first five weeks of 2013.

The U.S. Department of Commerce is reporting that the U.S steel industry generally gained ground in 2012 with an increase of about 7.8%, but the imports of finished steel increased more than 15% in the same period. Industry experts remain concerned about the imbalance that continues to affect domestic production and are voicing their concerns to the U.S government. A recent "Steel Import Monitoring and Analysis" data sheet released by the U.S Department of Commerce shows that steel import permit applications for February were for a total of 2,558,000 net tons, which represents a 5% decrease from the January report.

The U.S. steel market remains burdened by oversupply and increased imports, with supply currently exceeding demand. As of December 2012, steel imports increased to 30.4 million metric tons from 25.9 million metric tons in December 2011. Most of the increase was seen in the areas of blooms, billets, slabs and oil country goods. The countries with the largest import increases were Russia, Brazil and South Korea.

This past January saw more change in the imports with increases seen in oil country goods, hot-dipped sheets and strips. A reported dip was seen in the bloom, billets and slab imports. Increases again were seen in South Korea and Canada, with some decreases from Russia and Australia. In 2012 alone, the U.S. imported an average of 2.5 million metric tons per month, 17.4% higher than the average monthly import volume in 2011.

U.S. imports of steel mill products from China remained on the rise throughout 2012. A 6.9% increase was recorded from November to December 2012. The U.S. imported 33.8% more steel mill products from China per month in 2012 than in 2011. Overall, China exported 14.7% more steel mill products in 2012 than in 2011, which represents a 32.2% increase in the exports to the U.S. The U.S. ranked as the eighth-largest market for Chinese exports in 2012.

China's overall world steel production remained steady at 47% between November and December 2012, which accounts for almost half of the total monthly world production. For the same time frame, the U.S. ranked fourth at 6%. India remains in the background as it continues to build, rebuild and upgrade its own infrastructure.

While the U.S. steel industry is still recovering, it can be noted that the industry only posted a small loss for the fourth quarter of 2012, posting a net loss of $200,000. AK Steel and United States Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania) ended the quarter and year with net losses. NuCor Corporation (NYSE:NUE) (Charlotte, North Carolina) reported the highest quarterly net profit at $136.9 million.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.