AIIS, Falls Church, VA

Steel imports in the U.S. decline

Imports have now decreased for five straight months and seven of the past eight months, and the 3.05 million net t of imports in June were nearly one-third lower than the total last October. Imports from Brazil recorded the biggest decline – nearly 29 % from May and 22 % from June 2014 to 363 000 net t. The European Union shipped 477 000 net t of steel to the United States in June, 23.3 % less than in May and 25.7 % less than the previous June. Imports from China fell almost 37 % from May and 17.5 % from June 2014 to 191 000 net t, while Mexico sold 204 000 net t of steel north of the border, 7.8 % less than the previous month and about half the amount from the previous June.

Some countries recorded increases in June, including Canada – up 13.7 % from May to 542 000 net t, roughly the same as in June 2014 – and Japan – up 16.1 % from the preceding month and 9.3 % from the preceding June to 259 000 net t.

Despite the recent trend, year-to-date imports are 2.7 % higher than they were through the first half of 2014. Most of the United States’ major steel trading partners have increased their shipments to this country, with the exceptions being Mexico, down nearly one-fourth to 1.38 million net t, and Russia, down by almost 57 % to 1.01 million net t. Imports from Canada increased 21.7 % to 2.99 million net t, from Brazil 19.5 % to 2.8 million net t, and from South Korea 17.1 % to 3.06 million net t.

In May 2014, the Economic Policy Institute (EPI) released a report that asserted, according to its title, that “Surging steel imports put up to half a million U.S. jobs at risk.” Since that time, monthly steel imports have fallen by more than 24 %, and the economic factors that have contributed to the reduced use of steel – most notably, the slowdown in drilling and fracking projects in the energy sector – are regularly cited as reasons for the nation’s economic sluggishness. Moreover, the steel import decline began in October 2014, the starting point for a significant slowdown in the growth of the economy. Taken together, these developments indicate that, notwithstanding the claims of the EPI report and likeminded critics, steel imports are positively correlated with economic growth.

AIIS, Falls Church, VA