Alan M. Field | Aug 25, 2009 3:41PM EDT
Total steel imports to the United States rose 14 percent in July, compared with June, to 893,202 metric tons, according to preliminary data issued Tuesday by the U.S. Department of Commerce.
Nevertheless, steel imports remain down 49 percent in July, on a year-to-date basis, compared with last year. Imports of hot-rolled steel rose 8 percent in July to 82,013 metric tons from 75,941 metric tons in June. However, imports of cold-rolled steel dropped 10 percent from June levels to 53,110 metric tons in July. Hot-and cold-rolled imports combined are down 41 percent compared to July 2008.
"The increase in imports reflects the tentative improvement in the steel market this summer," said David Phelps, president of the American Institute for International Steel. "With steel producers from Canada and Mexico reacting as quickly to improved market conditions as domestic producers, their exports to the U.S. represented over 50 percent of the increase in tonnage in July. With some domestic steel companies’ plans to restart their furnaces delayed, imports of semi-finished products were critical to their ability to service the improved market and therefore semis posted the largest product increase in July compared to June. These data show that the U.S. steel market is finally beginning to emerge from the recession. Of course the big question, still unanswered, is whether the improvement in the U.S. market is merely a re-stocking of inventory or reflects real improvement in demand and can be sustained," said Phelps.
William E. Gaskin, president of the Precision Metalforming Association, said the slight increase in U.S. steel imports in July offers tentative hope that the extended downturn in U.S. manufacturing activity may have hit bottom. "This is the first time in 2009 that we have seen an increase in steel import levels compared to the prior month," said Gaskin. "But for flat rolled products, year-to-date imports remain far below levels of the past several years. Demand for flat rolled continues to be soft, though over the past few months PMA's business conditions surveys indicate that our members are steadily gaining orders and growing more optimistic about prospects for overall economic recovery. Steel prices are starting to rise in part because of increasing demand, but also because service center inventories are at extraordinarily low levels, especially for flat rolled carbon, which according to the Metals Service Center Institute were at 1.8 months at the end of July."
Gaskin remained cautious about the longer-term outlook, however. "While business conditions are improving, recovery in the metalforming industry is by no means at hand. Many manufacturers -- particularly small and medium-sized companies -- remain plagued by ongoing difficulties accessing credit for their businesses."
Gaskin noted that the U.S. Department of Commerce's Manufacturing Council held a conference call today to discuss the formal request that will be made to Commerce Secretary Gary Locke for assistance to manufacturers via a government guarantee of loans and/or receivables for domestic companies manufacturing in America.
PMA represents the $91-billion metalforming industry of North America, which creates precision metal products using stamping, fabricating, spinning, slide forming and roll forming technologies, and other value-added processes. Its nearly 1,100 member companies also include suppliers of equipment, materials and services to the industry
Contact Alan M. Field at afield@joc.com.