Steel imports at near-record levels

By Staff -- Purchasing, 9/7/2000

Through the first half of this year, 20.2 million tons of steel entered the U.S. The total is 11% higher than the same period in record import year of 1998 and 20% higher than the six-month period in 1999, the second highest year for imports. In 1998, a record 41.5 million tons of foreign steel were shipped to the U.S. Last year, imports slipped to 35.7 million tons. This year's midyear tonnage annualizes at 40.4 million tons. Imports of mill products rose 22% from year-ago six-month levels. Semifinished imports, used by the domestic industry to augment their own production, have increased almost a million tons in the six-month period, from 3.8 million tons in 1999 to 4.8 million tons in 2000, a 27% increase. Imports of semifinished in June, however, decreased by 35% compared to June of 1999. Salomon Smith Barney analyst Michelle Applebaum continues to believe imports of finished steel products will decline slightly over the next few months as a result of the slowdown in the U.S. market, which will increase availability of steel and cause weaker domestic market pricing. She expresses surprise that imports have not begun to fall yet. "Imports have remained high despite the softening in the U.S. steel market as a result of the three- to four-month lag time between the time orders for imports are placed and when they arrive," Applebaum says. "Therefore, orders for most of the imported steel that entered the market in June were placed early in the first quarter, before the steel market began to weaken." On the other hand, analyst Mark Parr at McDonald Investments says that "as global production trends have continued to outpace end demand through the first six months of 2000, the potential for further increases in imports during the second half of the year is increasingly likely."