Will January Imports be the First “Surge” Month?

There has been much written and said about the projected “surge” of imported steel expected to hit the United States over the next few months. Many of the steel analysts believe the incoming foreign steel will help dampened flat rolled steel prices which peaked during the first week of January at $680 per ton ($34.00/cwt) according to the hot rolled average price index produced by Steel Market Update. Bank of America metals and mining analyst, Timna Tanners in a note to clients said, “…Aggressive price premiums to global prices and contract negotiations helped encourage U.S. buyers to order import, which should pressure U.S. prices from as high as $700/st…Imports have reportedly been arriving into Houston and Chicago at a $100-$120/st discount to mill sheet price offers on a delivered basis….”

Based on U.S. government import data, November and December total imports were fairly tepid, coming in below both the 3 month and 12 month moving averages (see table below). However, based on the first 14 days of license data (we have linked to a recent article written by David Phelps regarding the licenses data numbers and what they really mean), if the rate of inbound license requests continues and all of the steel indeed shows up during the month of January – the U.S. would receive 3.3 million net tons of foreign steel.