PITTSBURGH – U.S. steel product imports rose in July, breaking a five-month string of month-on-month declines, though industry sources remain torn about whether the move is an indication that the generally weak market conditions are in for an upswing.

Imports totaled 893,202 tonnes in July, according to preliminary U.S. Census Bureau figures, up 14.2 percent from June's final 782,094 tonnes but still 66.2 percent below the 2,638,789 tonnes imported in July last year.

While business conditions are improving, William E. Gaskin, president if the Precision Metalforming Association (PMA), downplayed the hope of a quick recovery in the metalforming industry. "Many manufacturers-particularly small and medium-sized businesses-remain plagued by ongoing difficulties accessing credit for their businesses," he said.

The last month-on-month U.S. steel import rise came in January, when 2,148,660 tonnes were brought ashore, up 14.6 percent from 1,874,760 tonnes in December 2008, Census data show.

Imports of blooms, billets and slabs totaled 89,951 tonnes in July, up 96.2 percent from June's 45,854 tonnes; coiled plate rose 63 percent to 47,941 tonnes from 29,412 tonnes; rebar jumped 55.3 percent to 29,455 tonnes from 18,969 tonnes; standard pipe rose 35.5 percent to 47,685 tonnes from 35,183 tonnes; and hot-dipped galvanized sheet and strip was up 20.8 percent to 61,079 tonnes from 50,566 tonnes.

Thomas Danjczek, president of the Steel Manufacturers Association, said the steel industry isn't out of the woods yet. "There's not much to say," he said. "Let's see what the next couple months bring. I think the numbers reflect the U.S. industry can supply its own market at this level."

Thomas Gibson, president and chief executive officer of the American Iron and Steel Institute, agreed. "With America's economic recovery fragile and manufacturing still weak, the steel industry will remain vigilant against any unfair trade in the U.S. market," he said. "While preliminary steel imports in the aggregrate remain at a modest level compared to 2008, the more significant trend in the midst of a domestic steel industry operating at only 54 percent (of capacity), is that finished steel import market share through (the first) seven months is at 25 percent."

About 36 percent of July's gain was due to semi-finished product, with the import tonnage nearly doubling due to a pickup in domestic sheet orders, Michelle Applebaum, steel analyst at Chicago-based Steel Market Intelligence, said in a research report.

"Semis supplement domestic production-particularly at inflection points-where semi imports are quicker than blast furnace restarts, so we'd expect for imports of this product to begin to taper off as blast furnaces come back online," she said, adding that impor ts should remain at historically low levels for the next few months due to competitive U.S. prices, "which are rising in tandem with import prices-and continued economic uncertainty, which should keep steel buyers away from the long lead times of imports."

David Phelps, president of the American Institute for International Steel, sees U.S. mills' increased semis imports reflecting improved market conditions. What's more, the data indicates that more than 50 percent of the tonnage increase comes from Canada and Mexico. "There will be a lag before non-Nafta (North American Free Trade Agreement) suppliers can benefit from improved market conditions in the U.S.-three to five months between order and arrival," he said.

Imports from Canada totaled 272,758 tonnes in July, up 5.9 percent from 257,518 tonnes in June, while those from Mexico rose 37 percent to 153,861 tonnes from 112,339 tonnes.

Imports from China fell 33. 4 percent to 26,754 tonnes from 40,168 tonnes in the same comparison.

"Amazing the impact a trade suit can have," Applebaum said, referring to a preliminary ruling by the U.S. International Trade Commission earlier this year against Chinese oil country tubular goods imports (AMM, May 25).

However, Phelps said the decrease in China's numbers is merely an indication of the market. "The market drives imports," he added.

Stainless product imports increased slightly last month, rising 2.1 percent to 41,391 tonnes from 40,521 tonnes in June. However, the tally was off 56.9 percent from 95,947 tonnes in July 2008.

Source: American Metal Market, August 25, 2009