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US Steel Imports Surge, Driven By Price Differentials

Steel imports are expected to hit 3.2 million tons in January, up 23 percent from a year ago, as price differences between U.S. and Chinese steel rose to $159 per ton. At this time last year, U.S. steel cost $19 less than Chinese steel, according to market analysis firm CRU Group.

“It’s the largest first-quarter import order I’ve seen in the last five years,” one unnamed steel trader told the Wall Street Journal. That trader brokers steel purchases between U.S. buyers and foreign sellers.

The surge in imports could impact confidence in major U.S. steel producers like United States Steel Corp. (NYSE:X), AK Steel Holding Corp. (NYSE:AKS) and ArcelorMittal USA Inc., which all report earnings within the next two weeks.

Price-wise, the average U.S. price for a benchmark hot-rolled coil is $676, up 10 percent from a year ago. That compares with the Chinese benchmark price of $540 a ton. Even with shipping costs factored in, foreign steel can end up being 10 percent cheaper, according to Midland Steel Warehouse Corp.’s Howard Allen.

Global steel output near record in June on better economic outlook

  1. Quarterly revenues rose 15% YoY to $2.07 billion, topping estimates of $1.99 billion. The Fort Wayne, Indiana-based company attributed the strong results to record steel shipments and higher spreads seen in metal prices during the quarter. Steel
  2. LONDON: Global crude steel production rose 3.1 per cent in June from a year ago, remaining near record levels as producers crank up output in response to an improving economic outlook, data from the World steel Association showed. Crude steel output
  3. Shipments rose 2 percent in May over April, and are up 4.4 percent over 2013. U.S. steel mills shipped a total of 8.3 million net tons in May, as compared to 8.2 million net tons the previous month, according to the American Iron and Steel Institute.

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