The Impact of Imports in the Steel Market

No comments

Throughout early 2015 there has been an explosion of steel imports into the U.S. This has been a trend that was driven in the aftermath of the recession by Asian producers such as China, Japan, and South Korea. In order to put this trend into perspective, according to the American Iron and Steel Institute: the amount of foreign steel imported into the U.S. increased from just below three metric tons to almost four million metric tons from January 2014 into this year, an increase of 33%.2

This has led to the market share for foreign-finished steel by reach 32% this January, the highest share that foreign steel has ever attained within the market.2 Currently, automobile manufacturers, construction firms, and producers of vehicle parts are eating up steel at these prices.

Essentially, this is at face-value, an example of simple supply vs. demand economics, especially with a strong U.S. currency increasing the competitiveness of foreign imports even further. The implications from this excess supply of steel from the Asian markets has led to continued lower domestic steel production, and this lower volume has driven lower pricing throughout this quarter in the market. Through April, domestic steel production has declined annually by over 6%. This has led to firms such as U.S. Steel and Nucor having to slash their profit forecasts for the entire year. 3

These negative externalities are unfortunately being felt by employees as well as U.S. Steel has warned of further layoffs at their plants located in Texas and Arkansas.3 These layoffs are on top of what were reported earlier in the year as decreased oil prices benefited consumers, and other industries, yet hurt U.S. Steel’s production in plants in Illinois where more than 2,000 employees received layoff notices. This is due to the energy sector accounting for 10% of domestic steel consumption from generating items such as tubular products with U.S. Steel being the largest steel supplier in the American market for this sector. 5

Those experienced within the industry should be seeing parallels today to the steel market situation in the 1990s when a surge of imports also occurred with a strong U.S. dollar. For those new, this led to a market correction with bankruptcies of domestic steelmakers. Obviously this led to an increased trade deficit where international lenders provided to American firms liquidity to finance this deficit to essentially ride it out.

Luckily, there may be light at the end of the tunnel, and some are optimistic that light will shine relatively soon. Steel industry analysts see May as the earliest point where steel prices may begin their recovery.2 The hope for this summer is that imports should begin declining in the second quarter and this will lead to domestic steelmakers’ inventory levels begin to decline.2, 4 If this holds, then we should see the beginning of the end of this current pricing trend. Signs of this are appearing recently as hot-rolled steel coil (an item’s pricing which is viewed as an indicator of future trends within the steel market) has been making small increases.1 There are indications from this price increase that hot-rolled steel coil’s previous price drops have bottomed out.1 At the very least, it’s certainly something to keep an eye on, and remain hopeful as we move on into the second quarter.

About ARS
Advanced Remarketing Services offers innovative solutions to some of the remarketing industry’s toughest questions. We navigate the confusing landscape of wholesale, salvage and consumer markets to sell the vehicles in the best venue to the most appropriate buyer base.


  1. Balcerek, T. (2015, April 29). The Barrel Blog. Retrieved April 29, 2015, from
  2. Miller, J. (2015, February 26). U.S. Steel Prices Tumble in February. Retrieved April 22, 2015, from
  3. O’Hara, M. (2015, April 11). How the Decline in Steel Production Impacts Steel Companies. Retrieved April 22, 2015, from
  4. Packard, J. (2015, April 15). Foreign Steel Imports Should Break Down in Coming Months – Steel Market Update. Retrieved April 29, 2015, from
  5. Stangler, C. (2015, April 21). US Steel Warns Of Layoffs In Arkansas And Texas As Trans-Pacific Partnership Looms. Retrieved April 22, 2015, from
S.A. StevensonThe Impact of Imports in the Steel Market

Related Posts