US steel production has risen to fill the gap left by falling imports in the wake of imposition of Section 232 tariffs in March 2018, yet increased output and slowing global growth are weighing on prices and the US industry.
Since President Donald Trump imposed 25pc tariffs on steel imports early last year, they have fallen while prices climbed. The US market share for imports has shrunk to 24pc in the first nine months of 2019 from 31pc of the US market in 2017 as domestically produced steel has become a larger portion.
Imports in the 2018 period were down by 12pc from the first nine months of 2017 and have fallen by an additional 14pc in the first nine months of 2019. US hot-rolled coil (HRC) prices surged to nearly $1,000/st in mid-2018 from about $659/st at the beginning of that year.
While imports have fallen, domestic US steel production has increased as multiple steelmakers announced the reopening of idled mills, capacity expansions and the building of new mills.
But with the capacity expansions and increased output, HRC prices have fallen as low as $488/st in October 2019 as the global economy has slowed. US producers have either idled capacity or rolled back investments.
Global prices have also fallen, with Chinese HRC prices down by 17pc to $400/st. HRC prices out of Italy are down by 22pc to $394/st from the yearly high of $507/st in March, while Turkish HRC prices have fallen by 23pc to $376.50/st from the yearly high of $490/st in February.
By Rye Druzin
